TAILIEUCHUNG - Secrets for profiting in bull and bear markets Chapter 6

Chapter 6 When to sell. You are now more than halfway down the road to successful investing. To complete the journey, there's one more very important step to master - learning whenn to sell | CHAPTER 6 WHEN TO SELL You are now more than halfway down the road to successful investing. To complete the journey there is one more very important step to master learning when to sell. The sell decision is crucial if you are going to really win big in the market. Unfortunately few market players ever master this important step. Carrying just one Avon from 140 down to 19 or a Floating Point from 45 to 8 2 can put you out of action fast with no chance of a comeback. See Charts 6-1 and 6-2. It s hard to believe how many times I ve seen portfolios filled with stocks that were once winners but are now disasters. You know the story. XYZ was bought properly at 40 and then it quickly ran up to 60. But the word was out that it would soon run to 100 so why sell When it dropped to 20 you discovered only too well why it should have been sold. Alfm and VM Software Charts 6-3 and 6-4 illustrate clearly how important it is to learn how to sell properly. In both cases buy signals were registered point A on the charts . In the following months these stocks made advances that are the stuff of a buyer s dream. But if you had stayed married to them that dream would have turned into a nightmare. After an exciting advance each gave back its entire gain. Even worse they actually turned into losses Once you perfect the techniques of this very important chapter you ll never again experience this gut-wrenching roller-coaster action. Also damaging to portfolio results is the tendency to sell too soon. How often have you bought a stock just right then seen it triple in 12 to 18 months but without you still in it Instead of riding it from 40 all the way up to 120 you took a fast profit at 50 164 When to Sell 165 CHART 6-1 COURTESY OF MANSFIELD STOCK CHARTS CHART 6-2 COURTESY OF MANSFIELD STOCK CHARTS wrongly believing that you can t go broke taking a profit. The truth is that in the long run you need to capture these giant advances to offset the losses from occasional mistakes. By doing this

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