Tom,
Your method for improving your position by doing some trading along the bumpy road seems to be similar to mine. However, the words "extra cash" and "cash reserve" are foreign to me ;) I'm almost always fully invested.
My basic method is that I have a core position in a stock and a smaller trading position. The core position is held for the long haul. The trading position is just that. When a stock up, I'll sell some or all of the trading position. When a stock is down, I'll by more shares; most of which add to the trading position, but some will add to the core position.
Back in December, when tax related selling had punished many biotech stocks. I was a big buyer, going heavily into margin.
Two weeks ago, I sold half of my trading position in CTRX. Today, I sold half of my trading position in TCEL. I hope to sell half of my CHIR trading position next week during the peak of the Myotrophin excitement. These transactions combined with selling all of my SMTG/BAX shares will eliminate my margin. If the market keeps going up, I will sell more of my trading positions in order to build a "cash reserve" for the upcoming correction. But my timing is usually so bad, I'm usually still on margin when the correction occurs. But it's getting better.
Ed. |
