Friday, 11 December 2009

How Laura's loss was Glenn's gain

How Laura's loss was Glenn's gain


The stock began to climb. Last Friday, it looked like we had a clean shot at walking away with a 100%-plus gain.

But there was no announcement.

The company waited until Monday morning before market open to sneak out a release that the FDA had withheld approval. We sent out an alert to sell the stock for the best price our readers could get.

The stock opened dramatically lower: Instead of taking a triple-digit gain, we had to mark our closed positions portfolio with a 50% loss.

(The problem with a stop loss in this situation was the dramatic drop in the stock's valuation right off the bat! If a stock opens 60% below the previous trading day's close, your chances of selling at your 20% trailing stop are almost nil.)

http://investmentsthatwork.blogspot.com/2009/12/how-lauras-loss-was-glenns-gain.html

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