STREET DOGS
Getting out
You want to make sure you get off the horse if it starts heading in the wrong direction
From Ivanhoff Capital: Price action can impact fundamentals just as much as changes in fundamentals can impact price action. Sustained lower stock prices eventually lead to worse fundamentals in many cases. Low price:earnings today often foreshadow lower earnings in the future. I want to make sure I get off the horse if it starts heading in the wrong direction. Most people believe high turnover is risky, but I think just the opposite. High turnover reduces risk when it’s the result of taking a series of small losses in order to avoid larger losses. I don’t hold on to stocks with deteriorating fundamentals or price patterns. For me, this kind of turnover makes sense. It reduces risk; it doesn’t increase it. Never say never. Absolutely anything can happen. Even stocks of the strongest companies can and will decline substantially during market corrections. When a market correction starts, some of your stocks will gap below your stops. Justifying holding individual positions below their...
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