Section Items
Short Term Holding
Slightly Off Topic
Misc.

Share Trading - Misreading The Past

It is very easy to look back at a share chart and say I should have held on for longer.

This forgets that the object is to take profits and selling below the maximum price is inherent to the strategy.

There are always successes that you have missed as well as failures that you have avoided.

Don't Waste Time With Regrets

It is very tempting to look at the past but the objective is to make money. Being right means taking the profit that you can reasonably expect, if it turns out that there was a bigger profit available, see if your definition of reasonable was wrong.

If you were to look at the Home Retail Group (LON:HOME, Argos and Homebase) during 2012 it is easy to say buy at about 80p, wait a few months and collect a 40% profit.

During this period Comet went into administration, whilst with hindsight you can create arguments about why they were different this is still hindsight.

As Comet was in private hands you couldn't have bought shares anyway, but if you had it would have been a total loss.

The objective is to make money, every time you do something risky and lose a portion of your investment pot you are going against that objective. It is nice to dream about making a 500% profit, but the reality will probably be a loss that sets you back 6 months or a year.

I recently bought GroupOn (NASDAQ:GRPN) and made about a 5% profit in a day, I had a specific reason for buying and it seemed that the increase was all that was going to occur because of that reason. Next day they went up another 15%, it seems that I was too on the ball and many other people hadn't seen the same reason until next day.

I am considering this, I am not annoyed that I missed the extra 15% profit and I haven't dived back into the share hoping for more. I was happy with my 5% originally and it fits within my targets, diving back in is an unreasonable risk to that 5%.

Had I stayed in for a few weeks I could have had a gain of about 80%, but I don't understand why the price continued to rise, it still doesn't make sense to me even now.

It is still more in a day than a savings account would pay in a year.