It's Time to Sell Now

• Report this Comment On May 05, 2010, at 4:31 PM, BMFPitt wrote:

  Don't sell because it's May. Sell because we've had an epic rally based on nothing but wishful thinking and government handouts. We're Wyle E. Coyote and we went off the cliff months ago, but we're just starting to look down.

• Report this Comment On May 05, 2010, at 5:20 PM, Maui808Gal wrote:

  If you had sold on MAY 1st this year....and bought on May 5th...you'd be in good shape...hopefully this correction is about done with itself already. :)

  Sharan

• Report this Comment On May 05, 2010, at 5:47 PM, TMFKopp wrote:

  @BMFPitt

  I kind of agree with you. There's been a lot of what you refer to, that is:

  "we've had an epic rally based on nothing but wishful thinking and government handouts."

  But at the same time, there are a lot of really good businesses out there that will keep churning out profits and (even better) handing out dividends to their shareholders. If investors want to sell everything, that'd be fine with me... it'd just push up the yields I can get.

  I do wonder about some parts of the market though -- particularly in the financial sector. I just don't know that we're completely out of the woods. I've been looking at the balance sheets of some of the smaller community/thrift banks and they appear to be woefully under-reserving based on the amount of non-performing loans they have.

  Matt

• Report this Comment On May 05, 2010, at 6:15 PM, phyllisritvo wrote:

  What do you think of stop--loss orders? And at what point do you sell--10% down, more, less? Obviously, I'm still learning.

  Phyllis

• Report this Comment On May 05, 2010, at 8:08 PM, TMFKopp wrote:

  @phyllisritvo

  As with a lot of investing topics there are different schools of thought. Personally, I'm against stop loss orders. To me, a stop loss order suggests that you don't really know what the stock in question is worth and you're willing to sell just because the price is dropping.

  If you're trying to be a fundamentals-focused investor, your best bet is to have a good sense of what all of your stocks are worth -- based on a combination of business factors and financial metrics. That way you don't have to worry when a stock is falling because you know exactly what it's worth (heck, you may even want to buy more rather than selling...)

  What I'm talking about above is going through your portfolio to find companies where the fundamentals have changed -- the underlying business is deteriorating, management has changed for the worse, or a big acquisition has been made that will potentially destroy value.

  Hope this helps

  Matt

• Report this Comment On May 05, 2010, at 8:36 PM, joetrecknokes wrote:

  I have been investing in the stock market since November and I just turned 15. I only have $2800 in the market now, however I used to have $3000 before the market recently had this "mini-crash".

  I read the Motley Fool Guide for Teen Investing and it inspired me. I bought up my first shares in November (ticker: EPE). I made a 34% gain off of EPE when I sold at the end of the rally. I am now invested in CWCO, for a water play, Exelon (EXC) for a nuclear/utility play, and TINY for a small cap play.

  I have lost lots of money recently off of TINY, which is a venture capital corporation that specializes in nanotechnology. I have lost more than 10% as of today. I don't know what I should do. The last time I sold a stock because it was going down I missed out on an acquisition. This was SWWC, which I sold at a loss, and then a few weeks later it shot op 60%. Do you think TINY's portfolio of private companies will get an IPO within the next couple years? Do you think its still worth holding on?

  Any advice is appreciated.

  Thanks

  Joe

• Report this Comment On May 05, 2010, at 8:41 PM, plange01 wrote:

  hertz is buried in debt and about to go bankrupt they are not buying anything.this deal will fall apart possiblely avis but thats doubtful to...

• Report this Comment On May 05, 2010, at 9:04 PM, topsecret10 wrote:

  Went from 10% to 30% cash TODAY. You should take this market action seriously. There are NO JOBS !!!!!! Doesn't anyone get It ??? Let me repeat..... There are NO JOBS !!!! Companies have slashed their bottom lines to the bone. There Is no meat left. Earnings comparisons are going to hard to come by to the UPSIDE. The government Is broke. Congress continues to push a political agenda over an economic agenda. They don't even talk about jobs In Congress,they are talking about Immigration reform for Gods sakes !!!! Double dip recession Is not only possible,It Is probable !!! I have made almost 80% on my money since May of 2009. I Intend to hold onto those gains..... TS

• Report this Comment On May 05, 2010, at 9:15 PM, nuclearrabbit wrote:

  10 to 30%? how about 50% cash, 10% gold, 40% short sell (pick your flavor).

• Report this Comment On May 05, 2010, at 9:40 PM, topsecret10 wrote:

  Joetreknokes... I congratulate you on taking control of your Investments with regard to your eventual retirement In 2055! LOL !!! The main thing that I can stress Is PATIENCE. When you pick a stock,you do so with the belief that In your opinion, the company Is a good Investment. Unless there Is an overwhelming underlying reason for your opinion of THAT PARTICULAR COMPANY to change to negative,you should use any weakness In the shares to buy more. I say this with regard to LONG TERM BUY AND HOLD. One thing to remember Is that when the stock market runs Into uncertainty,small caap stocks such as (TINY) tend to get hit first,and Investors tend to flock to larger,well capitalized companies that pay dividends. {TINY} seems like a well managed SMALL CAP Investment company,and I would not worry too much about them OVER THE LONGER TERM.

• Report this Comment On May 05, 2010, at 9:41 PM, topsecret10 wrote:

  On May 05, 2010, at 9:15 PM, nuclearrabbit wrote:

  10 to 30%? how about 50% cash, 10% gold, 40% short sell (pick your flavor).

  Yea,that could work too.... LOL!!!

• Report this Comment On May 05, 2010, at 9:49 PM, goalie37 wrote:

  Sell in May...

  I prefer to read sheep entrails for my investing decisions.

• Report this Comment On May 05, 2010, at 9:52 PM, topsecret10 wrote:

  Sell in May...

  I prefer to read sheep entrails for my investing decisions.

  LOL!!!

• Report this Comment On May 05, 2010, at 11:15 PM, cteressa wrote:

  Anybody think airlines, southwest and jetblue should be dumped, hold both, thinking about selling but expect good levels of travel this summer. Some advice would be appreciated.

• Report this Comment On May 05, 2010, at 11:57 PM, joetrecknokes wrote:

  Thank you, Topsecret10. I haven't had any real experience with small caps, so I appreciate your help. I WILL HOLD!!

• Report this Comment On May 06, 2010, at 2:57 AM, TMFKopp wrote:

  @joetrecknokes

  Congrats on starting to invest. The more/longer the do it, the more you'll learn, the better off you'll be, and the more comfortable you'll be doing it.

  As far as TINY in particular, I'm not familiar enough with its portfolio to tell you what to make of its prospects (though the CAPS community seems to like the company: http://caps.fool.com/Ticker/TINY.aspx).

  What I will say, though, is that in the grand scheme of things, a 10% loss is really not that big of a deal. Many companies (particularly small caps) will lose 10% or more if they announce earnings that are a single penny shy of estimates. And many small caps will shoot up 10% or 20% in an equally short time.

  In fact, the best thing to do is to try to worry less about the market's movements and concern yourself more with the fundamentals of the company and what you think the company is worth. Since you're talking about the ability of TINY's to get liquidity events for its portfolio companies, then you're obviously spending a decent amount of time reading up on the company. Your buy and sell decisions should be largely based on what you learn about the quality of TINY's business -- if the company's portfolio starts to deteriorate significantly, that should be your sell signal, not the drop in the stock.

  I'd just encourage you to try and focus on the company's long term prospects and not let the market's ups and downs play with your blood pressure.

  Matt

• Report this Comment On May 06, 2010, at 2:59 AM, TMFKopp wrote:

  @cteressa

  Speaking just for myself (and I focus mostly on investing in companies that I want to own for a long time), I avoid airlines like the plague. Huge capital needs and very questionable profitability.

  Matt

• Report this Comment On May 06, 2010, at 6:56 AM, JestYourFool wrote:

  @joetrecknokes -

  Congratulations for getting into the market so early! I agree with topsecret. I'm a buy and hold trader. It's sounds like you are doing more "day trading" than holding.

  Read some of the articles hear at Motley Fool about turning $1,000 into $1 million in 40 years! You definitely have the time. These articles usually discuss companies that have paid increasing dividends, had stock splits, and were small caps not too many years ago!

  Find some great small caps (like TINY or BABY) for the huge earnings; dividend payers (like KO, XOM, and COST) for "income." You'll be sailing that yacht into retirement at 35!

  @cteressa -

  Southwest is actually a stock pick from one of the premium services this month. However, I agree with Matt. I don't see how airlines can be profitable without huge risk.

  I flew around the country as part of my job for 12 years. In the past five years, I would avoid flying if I could drive to the location within five hours. Customers are getting fed up with fees upon fees, oil prices are ever increasing, even the environment (Icelandic ash) is against air travel! ;)

  I think airlines are just too risky with little margin for profit!

  Jest

• Report this Comment On May 06, 2010, at 7:39 AM, ragedmaximus wrote:

  joetreknokes 1. your young 2. invest all of it in c and park it there for the next 5 years and sell when it goes to 25 and then put it in ko and leave it there for 20 years or more until then i suggest no more crazy trading youll lose in trading fees and losses.until your citibank hits buy ko and keep buying ko with every penny you get when you turn 50 you should be rich by then! thanks to compound interest and dividend reinvesting

• Report this Comment On May 06, 2010, at 9:53 AM, kahunacfa wrote:

  Like almost any "Old Market saw" = <i>Sell in May and Go Away</i> when it becomes general Market Knowledge, and more important when investors are actully dumb enough to react to it; actually selling in May, the smart investors who might actually believe that adage, have already sold in March or early April.

  Those Smart or Foolish investors will be buying in late August to early September Iff <= If & Only if> the market remains weak during the typical Summer doldrums-- when Europe ,or at least France, Spain & Italy> take at least a month off from June to August.

  While Europe vacations technology related companies: Semiconductors, Instrumentation companies, and Tellecommunication Capital Equipment companies used to experience a summer lul in new orders. Backlogs of new orders will slow, only to explode in September <the end of the third quarter, BTW>.

  <i>Foolish</i>(R) investors use the "Pause that Refreshes" maybe to accelerate the pace of fundamental investment research. They use the slow period to: 1. Visit companies, Attend investment conferences, yes some maybe even in Europe, Australia, the Far East, for example.

  You snooze - you lose!!!

  Kahuna, CFA

  (C) Copyright 2010

  Kahuna, CFA

  Retired <1995> Venture Capital Portfolio Manager

• Report this Comment On May 06, 2010, at 6:28 PM, TMFKopp wrote:

  @kahunacfa

  "Like almost any "Old Market saw" = <i>Sell in May and Go Away</i> when it becomes general Market Knowledge, and more important when investors are actully dumb enough to react to it; actually selling in May, the smart investors who might actually believe that adage, have already sold in March or early April."

  I more or less agree with you. But to be clear, the suggestion above isn't to actually rush to sell just because it's May and that's what the old saying tells us to do.

  Rather, I'm (and I'm mainly just agreeing with John Dorfman here) saying that having the whole "sell in May" thing ringing in your ears makes it a good time to take a look at your portfolio and decide if there are any stocks that need to be cut due to fundamental deterioration.

  Matt

• Report this Comment On May 07, 2010, at 5:15 PM, sept2749 wrote:

  I figure this is a cakewalk compared to a year and a half ago when apple fell to 89. I see a buying opportunity and see no reason to even think of selling a stock unless there is something inherently wrong with the company.

• Report this Comment On May 08, 2010, at 12:36 PM, mudman90039 wrote:

  I did a lot of trading last year, out of stuff I didn't think would come back and put more into 2 mutual funds that had opened up again. Also cut down my list of stocks to the few I want to follow and not just every one that's recommended on II or Stock Advisor. On my own I bought Ford once they announced no GOV help and was teh first time I was a triple bagger, then I bought my first flat screen TV as a reward. I bought more F because I believe in the company and own one,

  I feel better that I'm spread out with a few more MFs and ETFs, mostly Vanguards as they're low cost.

  wolf

• Report this Comment On May 14, 2010, at 2:39 AM, SPARTANBURG wrote:

  Thanks for the rec to clean up my portfolio with some unwanted shares. I definitely have a problem selling anything I buy especially when I'm losing. Information such as you provide gives me something to hold on to when I make my decisions to hold or sell.

  Thank you,

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