Art of Selling

Making money by investing in stocks of public companies is very easy task. As long as you have some money and time, it is almost impossible not to make a profit over the long term. Simply look at any one of the indexes ( Dow/SP500/NASDAQ/Small Cap Index/ etc.) over a period of say 30 years? Are any one of them down? I think not. In fact, all are up big time. This is also the reason why I advocate an "Automatic index portfolio" (see my note dated 4/25) for those who do not wish to be an active investor. The portfolio I suggested in my note will outperform almost 80% of all mutual funds while taking less risk as well as less cost.
This is the only instance where you do less and make more.

My custom made portfolio a.k.a. "Portfolio for the 21st century" takes on a bit more risk than the above but will outperform the "Automatic Portfolio". Most of us in the thirties can afford to take on more risk so I think 21st century idea is a good one (for most of you).

Finally if you wish to be an active, self-directed, control-freak type who thinks he/she can out smart the system then keep reading.
By the way, I am this type.
This is the real reason for this blog. Keep a dated record for future evaluation.
You guys are receiving my various ideas for free (mostly friends & families). I hope you can profit from them. If not, don't blame me. I am not perfect either. But understand this, I probably have more to loose than most of you if my ideas are not profitable. If I keep missing the boat, then maybe I should simply follow my own advise - back to "Automatic Portfolio".

There is one more reason why I trade. I enjoy the thrill.
It keeps me up at night with excitement. I love the ride.
So, for me, it is more than just money. This is my life.
Allow me to share it with you.
As you know by now, I am brutally honest. I tell you my mistakes. I also dangle my victories in your face. I hope my blog is not only interesting but entertaining as well. I sometimes add some life advise. I have managed many many people in my last career and I got to learn a thing or two that might help you. Finally, if you do not appreciate this blog then, get lost. Don't come back. It is afterall a free country. I am a firm believer in non-censorship. I want people to express whatever they feel as long as I don't have to listen to it. Simply change the channel.

Investing in stocks require two main motions: Buying & Selling.
Now, which is more important? Answer: Definately selling. (I am not going to get into shorts because it might confuse some of you).
There are two ways to sell: Mechanically & Artfully (is this a real word?).
Mechanical Sell: Telling the computer to sell at pre-determined price. If the price falls, stop loss limit order (range 8%-20%) will kick in to conserve my capital. If price doubles, I advise you to take between 33%-50% off the table to lock in the gain.
Artfull Sell: Because some stocks behave in such a way that if you place a mechanical sell order you will simply get kicked out of the game too soon - thus you simply let your gut lead the way (usually this is not a smart idea unless you know what you are doing).
There is no right or wrong way to trade. You just have to find your way. You are going to need a lot of practice. If you follow closely and ask questions (this is why we have comment section below the notes) then you can learn from my practices.

Bottom line: Selling is the most important task in investing.
Let the winners run (give it some room) and cut the losers short.
This is easier said than done.

P.S: My last two buys are acting nicely. Both EBAY and MVK are up so far. Go! Go!