Stop Loss Strategy

Bazofts_Revenge

It's yeild is a bit low for me 1% but its Profits cover that by 3 times and the dividend appears to be growing. It is though trading well above its 200 day SMA (simple moving average.. I think).

sabretoothtigger

I noticed that one, very impressive. Its part of the net boom I guess

'taking the profit' was one part of the process that lost the money.

You cant lose what you did not spend. If he gained 110% then he can sell half and lose nothing because it was all profit anyway
Lost opportunity is a 'what if' game, which is half way to the National Lotterys main ad theme 'it could be you'. Dreamers logic, taking profits is solid and sensible

Problem here is we are chucking our various principles out when the OP needs to stitch together a coherent strategy.

Could housing market run into problems, of course. So rebalancing gains elsewhere or just paying off a bill is fine

i mostly only use stop loss when I would have sold it today but I wanted to chance it might gain more. If lucky that can mean it doubles before an actual sale.
There is trailing stop also which is where you move it upwards on every gain, that is increasingly likely to catch a down move and will sell
(mostly stop loss is best when the sector is very weak beyond boundaries, like miners at the moment. Lots of gains but quickly lost also)

stop losses. are there any well-known very successful investors who do use them?

Most people here are speculators. How many people bought a stock in June 2008 and only thought to sell now. Thats way beyond most peoples time, wealth & fear levels

It shouldnt matter if the stock went from 200 to 1p The business is not the stock price but almost of all us are not qualified as investors or accountants, etc and just want to profit hence sl is correct to use at least occasionally

grey_gym_sock

sabretoothtigger wrote: »

Most people here are speculators. How many people bought a stock in June 2008 and only thought to sell now.

you well may be right - about most of the ppl here who buy individual shares.

(i still hold stocks i bought in 1996. which doesn't make me a better investor, but does help to keep dealing costs down.)

the point is: is there (with or without stop losses) any logic to being a speculator, or is it just a cross between LTBH and the national lottery?

merlingrey

Sell 20% and hold the rest, just take your profit.
If it goes back down you can always put the cash back or leave it.

If it goes up...well you're still gaining are you not?

billchecker1

On reflection I wont add a stop at the moment. I am in it for the long haul, whilst I belive a target may be met nextg year. I may revise my thoughts at that time. There is talk of foregin expansion which would lead to what I believe are excellent growth prospects.

If you are so confident in the company then rather than set yourself a stop loss set yourself a price alert as a trigger to buy if theres a sudden drop but make sure you are keeping an eye on the companies news bulletins. I've not looked at the finance side but popularity wise it does seem a good investment on the principle it is seen to be the default House searching site for most people. Does fish4homes still exist?

This is a really good point and something I will do. I do want to add to my position but due to Adding to my savings for a property purchase (deposit and all fees are saved for but need a bit more for refurbishment).

It's yeild is a bit low for me 1% but its Profits cover that by 3 times and the dividend appears to be growing. It is though trading well above its 200 day SMA (simple moving average.. I think).

The yeild is low, and I expect this will rise soon. However I am in this for growth and very much see the dividend as a bonus.

The fact is that there is already talk of a UK house price bubble and with cheap money being added to next year for house purchases I can see Rightmove profiting from this.

The company has no debt, spectacularly small cost base with a few hundred staff and a giant lead in the area. There last annual report stated that it was the 8th most searched term on the google search engine. That brand value alone has worth.

It is similar in a way to growth prospects for BSKYB as they only cover 50% of estate agents so room for expansion there. And once they have them is the possibility to increase fees based on profitibility.

Anyway this is going slightly OT. I will not put a stop on but be mindful of prices.

merlingrey

They do trade at a P/E ratio of 38 so you have to think about how much future profit expectation is already in the price.

Basically if they don't hit those profits or the housing market tanks you can lose most of your money.

Just as putting money in companies distressed at P/E of 3 or 4 is speculation on a turn around, putting money in a company at 30-40 x earnings is speculation that nothing can go wrong.

Biggles

billchecker1 wrote: »

The yield is low, and I expect this will rise soon.

Well, their brokers don't see it rising very fast. Forecast div for y/e 31 Dec 14 is still under 30p, though I guess that would be 1.6% on your purchase price.

sabretoothtigger

Ive sold companies at 100 PE and been wrong, it kept going up because they are releasing new product so the figures just show investment not the profit yet

I am in it for the long haul

Fatal last words :laugh: Everybody except millionaires need an income from what they do .
Look at all the government help for housing and how much debt and deficit are they in again, so thats hardly long term stable

merlingrey

sabretoothtigger wrote: »

Ive sold companies at 100 PE and been wrong, it kept going up because they are releasing new product so the figures just show investment not the profit yet

Was it tech? Defence? A company with a near monopoly position?

I remember some chip makers trading at high P/E s but the thing is they have patents so if the demand exists you absolutely have to buy it from them or through them, so the confidence is justifiably higher.


But I never said it can't go up I simply stated that it is more speculative, no matter what company it is a P/E of 100 is still 100 years to pay you back if the earnings remained level.

IronWolf

P/E is only half the equation, the other is growth. One company at a PE of 20 could be undervalued while one at a PE of 5 could be overvalued. It all depends on growth (positive or negative)