“One man’s ceiling is another man’s floor.” – Paul Simon
One of the reasons I started this blog is to put down my thoughts when I buy or sell shares. I want to be able to have a bit of objectivity in analyzing the process I go through in buying or selling shares. I want to have a strategy that I can support with a process that is compatible to my personality type.
Market moves (or non-movement) typically depends on its reaction to news of the organization’s income, macro, industry or related industry, etc. As the PSEi is in all-time-high territory, it makes me want to head for the exits and I can’t be able to blame myself if I did. However, how do I know if it’s at the high? Would I still buy some shares at this price point? I will always remember selling URC at ₱13? or was it ₱10.30? (from around ₱5), before it went up (albeit) many years afterwards to around ₱200 (now down to around ₱150). More recently, I bought DD @ ₱4.34 sold it a week after at ₱5.72. I bought it again at ₱8.07 then sold it at ₱10.30. That stock is now around ₱40.
I definitely want to sell some to lock in some gains, but I’m impeded by CGT. My thinking moving forward is to put in more cash into my stock trading account and try to put the majority into preferred shares, and if the market falls, then I sell the preferred shares (cognizant of the buy-sell spread) and buy shares that I deem undervalued. I could also sell some losers (I think I currently have around 6 out of 68+ shares that I hold that are losing more than 5% of their value) that I have and use it against my CGT gains.
I have always cost-averaged to remove the temptation of wanting to be completely right. This goes completely against what Charlie Munger thinks, but then again, I wouldn’t want to compare myself to one of the greatest investors the world has seen… and I’ll continue to hedge against my bets.