Release Leading Off… Should you keep or cut your stock?

Screen Shot 2014-05-05 at 9.13.38 PMTim Reazor
Chief Investment Strategist
NorAm Asset Management

This is my first newsletter since our big workshop on the 26th.   No matter how many classes I teach I always learn more from the people I meet then I ever give them.  Thursday was no different.  From audience questions I can figure out what is top of mind and hopefully help.  With that said here is something that may be on the top of your mind.  I’ll paraphrase a question I received and the answer I provided.

Q – My stock isn’t taking off.  I thought it was a leader when I got into it.  I’ve been in it for a while and it’s trading sideways.  How do I know when to let it go?

A – This question was asked in reference to our Schlumberger (SLB) position.   SLB drifted up, but really didn’t go anywhere.  Then after weeks of being in SLB it raced higher and it now a 20% gainer – so how did we hold it and not fold it like Kenny Rodgers?   We entered the stock where the red arrow is placed.

 TIMMY

This is a patience question.  I’ve lost more money selling early and I’m betting you have too.   But then there is the flipside where you’re watching everything else go up without you while you sit in your sideways mover praying for it to go up.

Here’s what I use to help me “Kenny Rogers” my stocks in regards to sideways movers.

The answer lies in the industry sub-groups.  SLB’s subgroup was rising and it gave me the confidence to hold it.  If the industry sub-group started to slip I would have most likely sold it.  A falling sub-group indicates last of institutional demand for the stocks in the group.  If the mutual funds, pension funds and hedge funds are pulling out then I don’t want to be the last one holding stocks in the group.

We talked about practical information like this for two and a half hours on Thursday the 26th.  I truly loved the class.  The only issue I had was our webcast.  It was terrible.  The sound worked and then the sound dropped as soon as I started.

Because of technological shortcomings I’m going to host a fresh webinar on Tuesday July 8th at 7 PM central.  I’m going to cover the same topics I covered on the 26th except I’ll have updated charts and a brand new watch-list for you.

If you’d like to attend this webinar please register here – http://noramassetmanagement.com/

I’m a self-admitted stock nerd.  Every weekend I produce a video for my fellow stock nerds and market enthusiasts.  If you’d like to watch it please click this link –  http://noramassetmanagement.com/videos/weekend-video-update-11/

One last note for today… Danny and I announced some really big news on our radio show this weekend.  If you missed it please click this link to listen –  http://www.thewallstreetshuffle.com/category/podcasts/

I hope this helps you enjoy a fantastic market week!

Best Regards,

Tim

The information presented is for educational and entertainment purposes only.  Opinions and information expressed are based upon information considered reliable.  However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.  

Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.

 

Investments involve risk and unless otherwise stated are not guaranteed.