Ahhh, big losers. They exist in every market environment but only show their true colors during bear markets such as this. The only people interested in them are those investors who have lost a ton stubbornly holding for far too long, short sellers who are loving life right now, and those who are looking to bottom fish. I understand the short sellers perspective -- it's a truly great feeling to profit off those sadly naïve or eternally optimistic investors -- but to the other two groups, I say, you aren't playing the odds.
That's right, no matter the company, products, potential, industry or their "long-term value," I'd never be caught invested in any stock whose chart looks like that of:
- Broadcom (NASDAQ: BRCM)
- Sandisk (NASDAQ: SNDK)
- JPMorgan Chase & Co. (NYSE: JPM)
- Merrill Lynch (NYSE: MER)
- Citigroup (NYSE: C)
- Motorola (NYSE: MOT)
- Sprint Nextel (NYSE: S)
- Ebay (NASDAQ: EBAY)
- Alcatel-Lucent (NYSE: ALU)
- Starbucks (NASDAQ: SBUX)
Because I cut my losses quickly before they can cut me sharply. Repeat that phrase over and over until you follow it every time. It all comes down to discipline. Those who have it make money, those who do not, do not. Do not be one of those do notters. It's so important a lesson; I cover it often in blog posts like this.
And experience tells me it's infinitely more difficult for stocks making new lows to turnaround anytime soon -- especially without breaking their perfectly downtrending chart patterns first -- than it is to profit by buying stocks breaking out to new highsMy advice to short sellers: ride your gains. Stubborn longs: cut your losses already and learn to cut them sooner next time. And bottom fishers: draw some rudimentary trendlines and don't buy until the stock breaks above them.
Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund
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Reader Comments (Page 1 of 1)
3-05-2008 @ 4:06PM
Steve in Denver said...
Cocky little shit. My guess is he's a kid (as in hasn't had it in his financial ass yet), and doesn't seem to have heard of capital gains taxes. Let me know when he's got Warren Buffet on the run. This kind of juvenile impatience is just what gets kids in trouble sooner or later. JPM a dog...Shame on this twirp.
3-06-2008 @ 1:14PM
Mozelle said...
To Timothy!
I agree with Steve in Denver!
What a bunch of garbage you spew out of your stupid, stupid, mouth!
Sell eBay now! Sell JP Morgan now! etc. LOL...
You would think that these companies are on their last legs, lol, going bankrupt or something!
And to Dave.... lol...lol...lol...lol.
You are a Joke!
Enough said.
3-06-2008 @ 2:43PM
Mike said...
Mozelle,
Why do you insist on insulting those people who disagree with your position? For that matter, why do you insist on insulting this author at bloggingstocks so much?
Why don't you make an educated thoughtful response on the merits, rather than calling Timothy's comments "garbage." If Timothy's article truly is "garbage," you could offer a rebuttal and disprove him on the merits...right.
I'm waiting... but I won't hold my breath.
Have a good day ;)
3-06-2008 @ 2:43PM
Mike said...
Same for you too Steve
3-09-2008 @ 11:26AM
Debi said...
Fantastic article... Thankyou for sharing such a great insight!!
5-16-2008 @ 1:40PM
Yale S. said...
"I understand the short sellers perspective -- it's a truly great feeling to profit off those sadly naïve or eternally optimistic investors --"
Wow, what a great guy. I can see why "Debi" always posts how much she likes him.