Anonymous concerns that affect everyone

thezster said: "I received the following PM - and thought that, perhaps, it was pertinent to more than just the sender. Specific references are left out to protect his/her anonymity. [I]Hey, Z. Just wanted to say hi and see if you had any sage advice for the bruised egoed and doubting investor. I really screwed up by not sticking by my picks and hanging in there. I got swept up in the herd and left quality positions, that have done nothing but go up, based on fears that have proven, at least as of yet, to be unfounded.[/I] I think you just said it all right there. You're letting your emotions get the upper hand in your process. One of the most difficult things to do is to buy something and watch it continue a decline. At that point you have to decide if the reason you bought was valid and either "cut your losses" or "hang tough". I find, typically, that - based on the type of trading that I do - if I hang on long enough - I'll end up in the green - or at the very least - even. Granted, there are those that I cut loose for a loss - and am thankful that I did so - but they are few and far between. If your plan is a sound one - you have to let logic and common sense dictate your actions - rather than that pit in your stomach. [I]I know my discipline is one of the biggest problems. I don't have a set plan, or even a general goal (besides making money, of course) before I go into battle. No exit strategy leaves me willing to take smaller profits when I get spooked and think I might lose out on those profits. Of course, that's exactly when the stock goes higher and I miss out on a solid % gain. I did A-okay with XXXX at first by not selling out but, once it went up pretty solid, I failed to take into account it's previous heavy increases (and declines). Thinking it would roll more, I figured I'd sell off, but she continued (true to form) to go up by leaps and bounds.[/I] Considering the fact that you're relatively new to this process - trying to play the rises/dips regularly is a less profitable method of trading than buying on the big lows and holding. Let's face it - a winner is a winner - and - if you've got a pick that is running green - let it run until it stalls - then move on to another. Day/Swing trading is trying to pick up nickels/dimes - and takes a lot of experience/intuition to do successfully. I do it because I enjoy the action - but I promise you - if I simply bought and held, for the most part, I would be doing as well as I do making numerous trades. [I]I'm sitting in about 75% cash and not sure what to do. I feel like I'm chasing if I buy now, but I'd also hate to end up waiting at the station for a train that's already passed. I cannot make sense of the news and the subsequent market reactions. I honestly think there will be more unfolding of the real estate market and it's mortgages, but what do I know? [/I] The first thing to do is sit down and take a deep breath. Then study the history of the market. All bull markets are followed by a bear market - to some extent - and every day is an opportunity - you just have to be patient and find it. This is a marathon - not a sprint - there WILL be another train coming into the station sooner or later. I too, get frustrated with equities running as strong as they have been lately, all things considered.... but am able to sit back and wait... knowing my cash is safe and earning a modest interest rate with my broker - at least I'm not sweating with a pick that my gut tells me is dangerous. [I]Anyway, sorry for venting. I'm just losing my confidence in my knowledge of and ability to pick stocks and feeling a bit lost. Over the next two weeks, I'm working day shifts and unable to play the market during trading hours, so I'm even further out there when it comes to confidence because I have to pick market direction and buy in points before the day begins, which aren't my forte's. [/I] As I said above.. this is a marathon - two weeks is nuthin.... You don't "have" to play every day to be successful. In fact, and don't take offense, at this point you don't need to be "playing".. but [B]investing[/B] the major portion of your portfolio and learning the system with a small amount. This is a great time to make some paper picks and see how they do to try to build your confidence back. The market will be here today/tomorrow/and next year - so to speak.... taking a break from it can increase your awareness and provide some educational opportunity. [I]Thanks for listening and take care, Z.[/I] Hope I was at least a little bit helpful..."

newinvestor123 said: "Man, if I had held onto a few positions that I got scared out of since last September, I'd be in the money... I bought NUAN at $12 - It's now $15. I bought USU in January at $13 - It's now at $17. I bought ZIXI back in November at an average price of $1.12 - It's now at $2.04. Same thing with ACH - I bought in at $22 - It's now at $26. I sold all of those for losses. After seeing all of those losses materialize into what could have been good gains, I knew it was time to change my strategy, and get my emotions in check. The 400 point drop presented a great opportunity for that, especially after everything I had was stopped out at a loss... I took a couple weeks off, mulled over my mistakes, revised my strategy, and jumped back in a few weeks ago. As of one week ago, I'm back in the green, and more importantly, I have a better strategy and more confidence in my abilities. I guess what I'm trying to say is don't give up - Keep learning, keep revising, and eventually, you'll get it right."

Rickster said: "That was a classic and well worth posting because you can be sure that there are a lot of guys out there that feel the same way. And those were some good answers by the Z-man. I too am frustrated. I have cash waiting to buy some stocks that refuse to go down. But I know better than to buy under these conditions. Every time, every single time, I have bought because I thought I was being left behind or it was my last chance... I lived to regret it. Now, I only buy because the deal is good. Not because I have money. So I wait. Think of it like fishing or hunting. No sense shooting at shadows."

Rickster said: "One other thing. These markets can be dangerous because they train traders to buy dips. If you bought the dip, you made money. If you didn’t, you wish you had. I hear guys talk about having enough faith or not having enough faith. Guys, this aint church. Sooner or later those dips will stop recovering. And buying them will handcuff you to a corpse. I don’t know when it will happen. But I know that it will."

DarkStraw said: "I have been tempted many times to sell.Im proud to say that of all the times ive been tempted... ive only really sold once. It was a bad move and i sort of regret it. since im new to investing i try to be a longterm investor, daytrading and swing trading is not easy, and you cant expect to just be good at it from the start. Thats why i stick to long term investing."

thezster said: "[QUOTE=Rickster]One other thing. These markets can be dangerous because they train traders to buy dips. If you bought the dip, you made money. If you didn’t, you wish you had. I hear guys talk about having enough faith or not having enough faith. Guys, this aint church. Sooner or later those dips will stop recovering. And buying them will handcuff you to a corpse. I don’t know when it will happen. But I know that it will.[/QUOTE] Very, very true..... The Z-man is currently 100% cash in one of his accounts - for the first time ever - but is sitting on the sidelines... waiting, waiting, waiting........."

thezster said: "[QUOTE=DarkStraw] since im new to investing i try to be a longterm investor, daytrading and swing trading is not easy, and you cant expect to just be good at it from the start. Thats why i stick to long term investing.[/QUOTE] My opinion is.. you should start by investing.... and, as you learn - you can try your hand at trading..... with a minimum of investment capital at risk...."

JCast3 said: "nice post Z....as usual your advice is sound and rational....i too have been sitting on the sidelines for the most part with an itchy trigger finger.... at the start of the new year i was 100% positive i'd be content with very minimal action until i felt the market "righted" itself....for the better part of the last 2 months ive been 2nd guessing myself like crazy....i want to get back in full bore, but i know that goes against my original plan, so i try my hardest to stick to it....the market really is frustrating sometimes...."

SporeMonger said: "Great post as usual Z :th_dblthumb2: No matter how much I learn, I keep battling my emotions and natural instincts. Those things do not belong here, I know. It is sooooo difficult to NOT do the wrong thing. I find myself trying to or actually doing things that I shouldn't! To each his own, but I find the market teasing me all the time. LEND, DNDN... Damn! Just when you think that they are done they keep gapping up! That is just an example. Gaps are dangerous and so are bounces. Being successful in the market is not just a matter of picking the right stock, or timing the entrance and exit points, even though you actually should :signs053: ..., but to control yourself! What helps me, is to remember that it's a game of playing the odds and nobody can be right every time, not even the market makers and specialists. It is counterintuitive and teases you and messes with your mind. I can not stress enough as to how important it is to use proper money management and remember that you are playing odds and should spend your time finding an edge to each stock pick. Above all... Pay attention to the fundamentals. It doesn't have to be a great company or even a good one, but don't stick your neck out too far. Just my 2 cents."

LongArm said: "[QUOTE=SporeMonger]What helps me, is to remember that it's a game of playing the odds and nobody can be right every time, not even the market makers and specialists. It is counterintuitive and teases you and messes with your mind.[/QUOTE] Exactly right, Spore. Traders have to put their egos aside. Do you want to make money or do you want to be right all the time? You can't have both, IMO. Here's something to ponder: You can be wrong more often than you're right and still be a successful trader."

SporeMonger said: "Here are some tidbits and "investment wisdom" (But not from the book), quotes that I have saved off, to ponder upon... There are two purposes of stock price movement. 1. Price discovery. 2. Risk transfer. "The stock market game is a humbling experience." - yep... no shit... "Good companies are generally bad stocks, and bad companies are generally good stocks" - Not sure about this one... I just try to keep in mind that I'm not trying to be a market genius, I just try to stay on the right side of the trade. Find an edge and just play the odds..."

JAP said: "[quote=newinvestor123]The 400 point drop presented a great opportunity for that, especially after everything I had was stopped out at a loss... I took a couple weeks off, mulled over my mistakes, revised my strategy, and jumped back in a few weeks ago. As of one week ago, I'm back in the green, and more importantly, I have a better strategy and more confidence in my abilities. I guess what I'm trying to say is don't give up - Keep learning, keep revising, and eventually, you'll get it right.[/quote] Don't worry New... This market is on quicksand right now. Another great buying opportunity will be occuring very soon. Here are some of me "[I]grassy knoll[/I]" speculations: If earnings do not meet expectations, there will be a pullback when the S&P hits the 1445-1450 level. If earnings meet/exceed expectations (which I highly doubt), then we'll probably get up to somewhere around the1460 level before it pulls back. After the initial pullback, it will re-test the 1370-1380 level on the S&P... that will be a golden buying opportunity."

JAP said: "Almost forgot... great reply/post by the Z-man!"

bigmike said: "love the post z. You hit the answers right on the noggin and I hope people take a lesson from this real life experience."

Wangberg said: "hell....i made some pretty stupid mistakes. selling NEW for a 14% loss when at the end of the day it would have been a <5%. and how about ONT going from 1.04 to 1.75. i'm actaully more angry i didn't buy ONT in the CNBC contest....but as for a real trade....the company makes NO MONEY!!!!! i don't understand it."

FirefighterB said: "Well, all, I'll fess up to being the author of the PM that started this thread. To further drive the issues with discipline, or lack thereof, I'll post what I had so you guys can see (if you didn't already have your own experiences) why getting skittish can be detrimental. Here goes: After the big dump on 2/27, I did some research and put together a stock portfolio of securities I liked. Here's what I bought, sold, and lost out on: BKS - bought @ 36.09, sold @ 36.34, currently @ 40.90 NTRI - b @ 47.07 (avg.), s @ 50.03, c @ 55.69 GRMN - b @ 51.54, s @ 52.34, c @ 53.76 BAC - b @ 50.86, s @ 51.74, c @ 50.86 (yay! I'm savvy) DUK - b @ 19.31, s @ 19.84, c @ 20.81 DO - b @ 76.07, s @ 78.54, c @ 81.69 RAI - b @ 60.49, s @ 61.59, c @ 63.54 BP - b @ 60.71, s @ 61.26, c @ 64.84 GE - b @ 34.31, s @ 34.56, c @ 34.77 (I am no expert and, while I think they were good picks, I'm pretty certain much of their gains can be attributed to the general drift of the market) So, while I was fortunate enough to not LOSE any money, I sure did lose out on potential profits. I have to say, it's pretty sobering to see it all in one place. I believed in these picks, but not the general market and I let my fears of it's uncertainty sway my thinking. All I would have had to do, as suggested by Rickster, is set a trailing stop (-2% is my dummy comfort level...but it might be too much/little for some stocks) and I could have kept quite a bit of profit. Needless to say, discipline is something that I am trying to infuse into my portfolio. I have set trailing stops on my two remaining stocks and plan on being just as vigilant when I jump back in. Hope my screw ups, and the great advice offered after them by the members of this forum, can help another investor avoid the same pitfalls I have encountered. Thanks all. Take care."

FirefighterB said: "[QUOTE=FirefighterB]After the big dump on 2/27, I did some research and put together a stock portfolio of securities I liked. Here's what I bought, sold, and lost out on: BKS - bought @ 36.09, sold @ 36.34, currently @ 40.90 NTRI - b @ 47.07 (avg.), s @ 50.03, c @ 55.69 GRMN - b @ 51.54, s @ 52.34, c @ 53.76 BAC - b @ 50.86, s @ 51.74, c @ 50.86 (yay! I'm savvy) DUK - b @ 19.31, s @ 19.84, c @ 20.81 DO - b @ 76.07, s @ 78.54, c @ 81.69 RAI - b @ 60.49, s @ 61.59, c @ 63.54 BP - b @ 60.71, s @ 61.26, c @ 64.84 GE - b @ 34.31, s @ 34.56, c @ 34.77 All I would have had to do, as suggested by Rickster, is set a trailing stop (-2% is my dummy comfort level...but it might be too much/little for some stocks) and I could have kept quite a bit of profit. Hope my screw ups, and the great advice offered after them by the members of this forum, can help another investor avoid the same pitfalls I have encountered. [/QUOTE] Just got talking about this thread and wanted to update it. BKS - 39.30 (still up from where I had it) NTRI - 66.81 (I bought back in quite a few times and made great profits, but I missed out on a 10% jump) GRMN - 70.83 (DOH!) BAC - 48.95 (Yay. I'm still super schmart! But, I did miss a dividend payment) DUK - 18.24 (Fortunate here. But, I actually bought back in at 18.25 last week) DO - 107.13 (OW! That one REALLY hurts. And I missed a dividend) RAI - 60.33 (Dropped back down. But, I missed a healthy dividend payment) BP - 69.76 (and a dividend payment. Man...this is getting painful) GE - 38.24 (and a dividend payment) and, at that time, I had and still owned BUD. However, I sold it at 52.26 before it broke above it's 52-week high, but it's come back to about that point. Still missed the div payment. However, even many of these stocks that dropped back down to levels below I sold out, or even where they were as of the previous post, would have been taken care of by a tight trailing stop and I would have kept most of the profits. Wow...taking a second to look over this really makes me want to close my head in a really heavy book a few times. Of course, I realize this is woulda/coulda/shoulda stuff that could have turned out totally different if the market DID crash. Of course, if that was the case, I'd feel pretty damn savvy, but I still could have missed out on profits and kept from major losses by the trailing stop. As Rbreb13 says, the missed profits and/or losses are just "tuition" in the stock investment school of hard knocks. But, my point for this was to not get too scared by things to stay on the sidelines or get scared out of your positions. Do your research, follow your guts, and set some trailing stops. Although you can avoid losses by waiting for the fall (which no one knows will come anytime soon) and make pittance as your cash sits in your money market account, you can't win unless you take the risk (CALCULATED RISK!) and actually play the game. Play smart."