Wednesday, June 20, 2007

Sold AAV today

Well I sold my AAV today. The very high volume (2.9 million shares, average volume 870k!) combined with the slow decrease in price from the morning made me feel too nervous. It's remarkable that it didn't fall more, so maybe I made a mistake. My theory is that a lot of people like me who got in at $10 or so are taking profits, plus the people who got burned by the fall even earlier are saying "Hey let me get out now before it goes down AGAIN."

I thought I'd be getting into this stock for slow growth with a great dividend but it didn't work out that way. Getting the equivalent of nearly 3 years' worth of the dividend in 2 months was too attractive to pass up. I still really like the stock though, so hopefully it will fall some in a big sell-off and I'll get back in! If it doesn't fall within a week I'll get back in anyway. I can't wait until I'm approved for options trading so I can hedge against this sort of thing without dumping all my shares!

Now if I were following deminvest's "free stock strategy" I would have sold only enough shares to get back my initial investment, then kept the remaining shares forever, earning a nice dividend. I like his strategy because it helps you get out of a stock at a good time and not be too greedy. It's also got a mixture of rational trading and long-term holding that is very good.

I haven't come up with a rigorous exit strategy for my stocks yet so I'm just going by my instincts, which may of course be very dangerous.


JonathanRaleigh said...

Traitor! jk I'm hoping I'll have the "patience" to stay in till the year end or maybe $18 may push me to sell.

Deminvest said...

First of all, congratulations for your fast 40% gain.

Regaring your plans for next week...
Hmmmm: "If it doesn't fall within a week I'll get back in anyway." Does not sound like a "patient investor".

Patient investor should look for value. You get value by buying the same good company stock at lower price...

I would rather say "I'll get back at a lower price if it does fall within a week"

Or: "If it doesn't become too expensive within a week I'll get back in anyway."