Time to cut losses?

[havanother1]

Hi, I'm a newbie and due to the lack of a newbie forum, I'm just going to have to ask my dumb questions here. Sorry in advance to the pros who'll probably just see this as clogging up the board.

Anyway, I got into shares about a month ago. Talk about your bad timing. Now I'm holding NOG, FTB, CEN and PVO. As you'll know, they've all taken a big hit and I've been burnt. I can tell you, it's putting me off shares a bit. I guess that's what you get when you enter the market knowing next to nothing. My question is this; should I just take my losses like a man, cash out and run, or should I stick it out? I guess it's asking for some crystal ball gazing but what's everyone else doing? Is this 'little dip' just that, or is it the start of something bigger? Are there any past experiences I can learn from or graphs that might help?

Thanks in advance for any useful advice.

[rmbbrave]

There is no excuse for taking losses. No shame in selling up.

If you believe the SP is going to fall tomorrow sell today and wait until you think it is going to go up before buying in again.

[Bling_Bling]

Havanother.... The first question you ask yourself is, why did you buy shares in the first place? Was it a long term investment or short term investment plan? If it is on a long term basis, then leave it and let the votility of the market ride it out. If your objective was for a short term gain, you may want to review your portfolio and make decision to cut your loses.

[lucky]

Phone the Minister of Finance, the right honerable M Cullen. My Daughter wanted to buy shares on his advice also, thank God I talked her out of it.
Anyway nothing falls for ever, pity is that while your shares stuggle back to where you bought them, some market players will be having a ball taking profits from these low levels.
Time in the market instead of timing the market, as preached by so many is IMO so wrong.

[limegreen]

The graph here looks like things might be heading toward nasty.

http://www.sharetrader.co.nz/topic.asp?TOPIC_ID=21503&whichpage=4

Further, without knowing your exact timing, it seems like you could well have bought each of your shares on a peak rather than a trough, which is going to make you doubly uncomfortable. With the possible exception of CEN, you also have a fairly high risk/high growth sort of portfolio.

Unfortunately, as many of us can probably attest, learning about shares usually comes with a fee (or loss). At a guess, I'd suggest that next time (assuming there is a next time) you buy a share, you will attempt to time it a little better (for, example, by considering graphs), and that you will also set an exit strategy in case it all goes horribly wrong before you buy. Two good lessons. Hope the price wasn't too high.

[havanother1]

All things considered it could've been worse. I guess I'm only worried it WILL get worse. Thanks for the advice, I might give it another few days - PVO just adjusted their profit forcast for the better so that will at least slow the fall. Then I might cash out and hope things get better. I'm in it for the long haul but there doesn't seem much point in holding shares while they languish or fall when I could cash out and buy back in later.

It was just bad timing I guess. The one consolation is that I followed the old 'only put in what you can afford to lose' addage. Still, it's a bitter pill.

How do I get in touch with Mr Cullen? I'd like to tell him what I think of his 'DIY retirement scheme'.

[Bling_Bling]

Have patience young one.

All good things take time. You seem to have a good pick of stocks. You are in it for the long haul, so dont look at the share price daily and you will get a better sleep. Do you constantly track the residential property market average prices dayly? If not, then why do you do it for your share portfolio?

[k1w1]

Experience is the comb that nature gives to bald men...

[KW]

Share prices go up - Share prices go down. All on a regular basis. If you bought and sold, bought and sold, every few days just because things bounce around every so often, then you will only end up making your broker money.
Do you buy and sell NZ$ and US$ every time it goes up a few cents or falls a few cents?
If you purchased these shares in the belief that you are buying part of a great company, then that company is the same today as it was yesterday, regardless of its share price. So there is no reason to sell.
If you bought on nothing more than trying to follow the herd, then like the herd, get out.
The smart ones around here are sitting poised waiting to snap up shares from panicked sellers at rock bottom prices.

For the record, some of the shares I owned pre-2000 crash have performed exceptionally well since (RNS and PVO) - if I had sold on the basis that the share price had fallen I would have lost a lot of money. Some of the shares I did sell and consequently lost money on, are now just recently performing brilliantly - and I wish I had held on to them.

[havanother1]

Thanks guys. You're right of course Bling Bling. I don't monitor my little rental property on a daily basis so maybe I'll just leave it all alone for a couple of months at least. NOG was always going to be a bit of a gamble - it's just that all my picks are heading down at once! Scary! I'm sure there's a lesson in this but I really did think I was doing the right thing putting money aside for the future and all that. Should've spent more time watching the old dogs before I leapt in but I got the bug.

I'll let this topic slide down and let you guys get back to it [B)]

[whiteheron]

havanother1

We all make mistakes and nobody gets it right all of the time --- that is the nature of investing

I made some pretty major mistakes when I started out investing just on 3 years ago but I have survived ( still make the occasional mistake , but not too many now )

I see indications in your comments that given a bit of time you will become a competent investor and I wish you the best
The losses that a new investor makes seem to be an expensive lesson that has to be paid to learn the trade as it were , certainly that was my experience anyway

One essential thing that I have found is that it is necessary to research , research , research --- both on a macro and micro ( individual company ) basis

All the best for your future investing

[fish]

haveanother 1
You have the right attitude to do well
Hold on and the market will come back-probably in the next few weeks-definately in the next few years
It would be a fool that buys high and sells low

[kittydashwood]

This inflation check is worldwide and it will only get worse. Still money to be made in select companies operating in favourable sectors.

[bongo66]

quote:Originally posted by Bling_Bling

Havanother.... The first question you ask yourself is, why did you buy shares in the first place? Was it a long term investment or short term investment plan? If it is on a long term basis, then leave it and let the votility of the market ride it out. If your objective was for a short term gain, you may want to review your portfolio and make decision to cut your loses.


Do what he said:), B

[The GrandMaster]

havanother1, i was in a similar position to you a few years back. i decided to get into stocks a year or so before sept 11. of course, when that hit, the value of my stocks dropped considerably. however, i was always investing long term so hung in there. in fact, i actually took advantage of some of the discounted prices after sept 11 and expanded my portfolio.

since then, i have been very satisfied with my returns. of course, i am also hurting a little from the last few weeks, but again i just remind myself that i am a long term investor. of course, i can't help my checking the prices of my stocks nearly daily, but that is just for fun.

so my advise would be to stick in and if you have some spare cash, look to take advantage of some bargains out there if the market does continue to fall

good luck
TGM

[lanenz]

haveanother1

There is some sound advice here. Bling Bling says it all when he asked, what is your intention when investing?. If you are looking at med to long term then I suggest you have a glance at your shares once every 2 months. You will drive yourself silly thinking, **** I lost $1000 on the market today and I worked 8 hours for $100. My guess is though, you could see the nz market climbing before you entered and thought this was easy money.

Another way to think of it as if you got 1 offer on your house or rental each day for 2 months. What would happen? One day you get offered 200k, next day 230k, next 170k and so on. It is only going to be woth what you sell it for and not what someone is prepared to pay for it when you are not selling.

If you are prepared to risk it all then I suggest you sit tight and go back to the reason why you entered the market in the first place.

I worked in a casino for 8 years and so many times I hear people say, I wish I had stopped when I made $200 or whatever.

[Bling_Bling]

quote:Originally posted by lanenz


I worked in a casino for 8 years and so many times I hear people say, I wish I had stopped when I made $200 or whatever.


Between the casino and the stockmarket, how do you manage to get a good nights sleep? [:o)]

[Placebo]

I find that the guaranteed way to make a particular share drop in price is for me to buy into it. This has certainly been my experience :D. Toe in the water.... whoosh, down she goes.

Fortunately I have survived early jitters and am ahead in the longer term. I'd echo the comments about examining your investing strategy. Oh and the other piece of advice, research research research.

Good luck!

[johna]

There is not much you can do when the whole market drops as it has done recently. There is nothing particularly wrong with with your share picks, everything has gone down.

They will come back up again (FTB up 5% today for example).

In theory, you could sell up and rebuy at a cheaper price, but the timing for this is hard to get right without the benefit of hindsight.

When you need to be more concerned is when a share is dropping while the market is rising, then you should reconsider holding it.

The question you always need to ask is what do I think this share is going to do tomorrow, if it is going to drop then sell it, if it is going to rise then hold it.

[marcus_milo]

quote:Originally posted by Placebo

I find that the guaranteed way to make a particular share drop in price is for me to buy into it. This has certainly been my experience :D. Toe in the water.... whoosh, down she goes.


Good luck!


I seem to have the same problem. Glad I am not the only one.

[rh]

haveanother 1

Do your homework and your should know whether should sell, hold or buy more.

some comment on your positions. three of four are speculative holdings. Also, quoting yorself, "NOG was always going to be a bit of a gamble" if u think the stockmarket is a big casino, maybe u should just cash up and go to Sky City instead.

happy trading and have fun

[clearasmud]

It seems that the market is thinking recession ahead.
Because of higher oil,higher interest payments,lower exports reducing disposible income??

[skinny]

quote:Originally posted by k1w1

Experience is the comb that nature gives to bald men...


:D I like that one

Lets hope a moderate #3 on the clippers is all the haircut we'll need to get said experience, going bald is a bit drastic [:p]

[marcus_milo]

quote:Originally posted by The GrandMaster

havanother1, i was in a similar position to you a few years back. i decided to get into stocks a year or so before sept 11. of course, when that hit, the value of my stocks dropped considerably. however, i was always investing long term so hung in there. in fact, i actually took advantage of some of the discounted prices after sept 11 and expanded my portfolio.

since then, i have been very satisfied with my returns. of course, i am also hurting a little from the last few weeks, but again i just remind myself that i am a long term investor. of course, i can't help my checking the prices of my stocks nearly daily, but that is just for fun.

so my advise would be to stick in and if you have some spare cash, look to take advantage of some bargains out there if the market does continue to fall

good luck
TGM


Not a good comparision IMO. Sep 11 was a one off unusual random event, and the resulting drop in share prices was a knee-jerk reaction. The current trend down appears to be a more of a deliberate move out of the New Zealand market by some investors. But the market was over heated anyway. People were paying rediculous prices for some shares, good shares, but not worth the money being paid.

But the $1000000 question is, is this the start of general decline for 2005, just a blip in the uptrend, or will the market track sideways?

[whiteheron]

mm

If anybody knew the answer to your question they would have the key to riches
The answer will be obvious by the end of the year of course
Hindsight reveals all given time !

On a more serious note though , this is a time to quit your worst performers and consider buying into well proven stocks with a long and strong track record , especially if there is a general pull back in prices across the board
A time for great caution I feel
Not a time to buy questionable stocks or stocks that have had their day
Consider what has happened to the likes of FPA and FTX