Playing YO-YO after selling for good price...
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=465
Printed Date: 20/Apr/2025 at 5:29pm
Topic: Playing YO-YO after selling for good price...
Posted By: manishdave
Subject: Playing YO-YO after selling for good price...
Date Posted: 08/Oct/2006 at 9:34pm
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Lets say a particular stock goes way high, may be in bubble territory. Somehow someone sold at or near top. And then stock tanks. Since one sold and it went down but 10-15% in a day or a week, the person tends to play with it. They would buy just for the reason they sold at good price. Than there may be dead cat bounce, and they sell it again at profit. This pattern is very dangerous coz person tends to believe he is expert on that stock's movement. I have seen that lot of times and sometimes they even loose money overall after very nice profit, because sometimes they even increase position than they had originally. I have been there, done that long time ago and I am very careful not to do that.
I would like to ask question to toher members. Have you been there?
One way to avoid that ignore that stock for few months(my preference) or take very small short postion that your mind set is not in buying that stock.
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Replies:
Posted By: basant
Date Posted: 08/Oct/2006 at 10:01pm
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Yes, I used to do that a few years back and the best part was that the difference looked like free money. I felt that a great job was done selling it at a higher price and then buying it back again at a lesser price. So even if it went down a bit from there the feeling was that the initial buy price was lowered.
As I had explained earlier on this forum that I lost 50% of my investment in Mastek in one day (lower guidance). The stock was at Rs 560 odd and closed at Rs 280 odd. I could make out from the lower profit that the stock would tank and had sold some at Rs 440 when it opened in the morning. In about 30 seconds the stock was at Rs 405 and I covered and ended the day at Rs 280. So much for the concept for free money.  ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 08/Oct/2006 at 10:27pm
| Hi Manish, I have also played this game rather am still playing it. I play it in just 1 company, Kabra Extrusion technik. This co. was my first pick in my college days . I went long at 56, ate 3.5 as dividend and sold it at 112. Again I entered at 84 and sold it off at 117. Now I am againn long having entered at 94 and again I have ate Rs.4 as divvidend. But now I intend to stay put with it for some time... no more Yo-Yos... the balance sheet is looking good and the association with Battenfeld Extrisiontechnik AG with the latter having acquired equity stake in it, is making this stock for some better upside... Bit to be very candid, I have enjoyed this game... but also agree with you, most people simply get rid of good stocks with this style or get re-invested at a wrong time. Was planning to do another yo-yo in Balrampur chini having bought at 51 and sold it off at 152 in kess than a year. But after this post of yours, will wait for my re-entry. |
Posted By: Ajith
Date Posted: 08/Oct/2006 at 7:56am
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My experience-sold tech at very high price in late 1999-great move,bought back same stuff in March 2000 at less than half the sale price-stupid move.Had to sell it at less than half that price.Luckily my cost price was less than this initially having bought in 1998. LESSONS-do not get attached to one/one class of stock.Diversify.As the Fidelity lady said in the last Outlook money its not the number of stocks that you have but what you have that counts.Dreman ,the master of contrarian investing also advocates diversification pointing out the various pitfalls of growth investments in his book on contrarian investing. ------------- Ajith |
Posted By: catcall
Date Posted: 13/Oct/2006 at 10:29pm
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The point u make @ emotional attachment is very true, its quite usual to fall into the trap of "this is my stock" or "this stock never makes me loose money". In such cases, when fundamentals change, its better to move on since there is no dearth of good stocks rather than clinging on to an idea whose time has passed! |