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I Was Foolish… But This Trick Kept Me Alive
I can’t believe I did it…
In hindsight, it was so foolish. But at the time, it made so much sense.
A year ago, I bought shares of banks and homebuilders. I admit it, I was a fool. But they had the three things I want to see in an investment…
Banks and homebuilders were:
1) Cheap – as cheap as they’d been in many years.
2) Hated – as hated as they’d ever been, judging by investor and homebuilder sentiment.
3) In what looked like the start of an uptrend.
With the benefit of hindsight, we now know the problems in banking and homebuilders were greater…
3Mar2009 | Stansberry and Associates | 0 comments | ContinuedThe Recency Bias: Why Your Subconscious Is Wreaking Havoc On Your Investment Portfolio
If you’re like many investors, a subconscious bias is currently wreaking havoc on your investment portfolio.
Recognize this and a whole new world of opportunities will open up to you.
Here’s why…
Psychological studies confirm that we all have biases. Yet we’re generally unaware of them.
When it comes to investing, few of them do more harm than “recency bias.” This is the tendency of investors to extrapolate recent events into the future indefinitely.
The Recency Bias Creates a “New Era” of Growth
When technology and Internet stocks were hot in the late 90s, for example, investors began talking of a “New Era” of limitless…
16Jan2009 | Investment U | 0 comments | ContinuedTrailing Stop: Getting Out With A Profit
“Should I sell XYZ stock? Or should I hang on and hope?”
For some reason, people will take 10% profits. And they’ll also sit on losers in their portfolio for months, watching them continue to fall. This is “limited upside, unlimited downside” investing – an almost guaranteed recipe for failure. Today, let’s cover how to do it right…using a trailing stop to end up with big profits and small losers…
There are only TWO reasons to sell an investment: If the reason you originally invested is no longer there, or if you’ve hit your pre-defined “point of maximum pain” – your trailing stop.
Both…
10Sep2008 | Investment U | Comments Off | ContinuedTrailing Stops: Lock In Your Profits with This Not-So-Secret Sell Strategy
Everyone’s got a story about a stock they wish they had sold. For contrarian investors, selling is a difficult task. We pride ourselves on holding stocks for the long run. But the truth is, you have to know when to take profits… and when to cut your losses, using trailing stops can help.
During an extended bull market like the one we have seen in oil, it is important to exercise caution in this particular sector. We’ve been riding this wave nearly eight years. I know all of the reasons oil should continue to climb, but I am not a market…
13Aug2008 | Investment U | Comments Off | Continued
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