Theo - mainly because, on the eve of earnings announcement, sentiment seems quite subdued/ negative. Largely down to an unknown new CEO appt I know. But could be a good time to go in. What developments are referring to...?
Theo - yes, Robbie’s website should be required reading for all DIY investors (though I haven’t bought any of his books).
Another way to look at it this is that stop losses help you sleep better and take much of the emotion out of investing. It’s hard enough figuring out what / when to buy let alone when to sell.
Every now and then I’ll see a dollop of cash in my brokerage account because a stop loss has kicked in. I won’t give that stock a second thought, but can enjoy focusing solely on how to deploy that.
I’ve mentioned before, but my mate who has been running many £100’s of m’s in multimanager portfolios has noticed that the very best fund managers sometimes - amazingly- have hit ratios of less than 50%; they get more calls wrong than right - yet they still outperform. All because they never let their losers have a big impact and they run their winners...
Maucha - I stop loss everything, no exception, and no matter how high my initial conviction. I’ve worked in the fund management business for 30 years and even the absolute best star managers have a hit rate of no better than 52 - 55%. The best brains in the world (even Matlot :-)) got it wrong surprisingly often. The trick is to ruthlessly cut your losses before they get out of hand and run your winners. Don’t fall in love with stocks. Stop loss everything. Usually around 20% below purchase price, depending on how volatile the stock is and how long you want to hold.
Guys - I like this thread. Most of us here are - to varying degrees - heavily long Metro, and there’s plenty of mutual respect and encouragement to stay the course. That’s all great.
But it makes me nervous that when Cud has a wobble and finally decides to stay with it, everyone without exception says “well done, that’s the right decision”.
It might not be. And we should be honest about that.
If the shorters get their way and we all lose a packet, how are we going to feel then, knowing that we encouraged Cud to stay in?
As someone who has more conviction in Metro than anything else I own, I wouldn’t want to be beyond 15% of my portfolio. And even then I’m protecting myself with a stop. If this one drops below 1.85 I’m out and unlikely to come back in. If you disagree, fine, but you still have to pick your stop level somewhere I think.
Cud, for heaven’s sake diversify. Don’t let this one consume you. There are some other great stock ideas out there at the mo....
Cheers Theo - agreed. I’ve looked at Robbie Burns who sets a stop loss of typically 15-20% below purchase price. And I’ve also worked closely with a number of fund managers (my role was always distribution).
In my experience, most of the good ones are good at recognising they made a wrong call and cutting their losses. One that didn’t, notoriously bought heavily into Lehman’s all the way down into it collapsed which wasn’t so clever.
Anyone got any ideas / insights on why JPM and Barcap continue to rate our bank as underweight? Would just be interesting to understand how they come to that view. They’re not stupid and they surely must have a reasonably well-considered rationale if they’re putting their names to a negative forecast.
The much-shorted Tesla has doubled this year. Shows what can happen when you get a short squeeze, followed by FOMO from others sitting on the sidelines. In Metro’s case, we should also get the kicker of reinclusion of FTSE250.