Page 1131 - How to Make Money in Stocks Trilogy

Selling Checklist 117

DryShips – 2008 Price 120
Weekly Chart 110
100
90
Quarter EPS % Change Sales % Change 80
Sep. ’07 2118% 150% 70
Dec. ’07 490% 195% 60
Mar. ’08 286% 168% 50
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Let the Chart Action Guide Your Selling 38
DryShips posted triple-digit earnings and 34
sales growth even as its stock collapsed. 30
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© 2013 Investor’s Business Daily, Inc.
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Volume
14,000,000
8,000,000
4,000,000
2,000,000
Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08
The fall of DryShips: Focus primarily on chart action,
not earnings, when it comes to selling.

Bottom line: When you see clear sell signals in the chart, just sell—
even if the earnings look great. You may not know why institutional
investors are dumping shares, but who cares?! You can find that out later,
after you’ve protected your money by moving safely to the sidelines.
8. The most important sell rule is to buy at the right time.
Several years ago I had an epiphany that sounds incredibly obvious in
hindsight, but it made a big difference for me: I realized that most of my
mistakes came down to one simple problem—I was buying at the wrong
time. I had a tendency to jump in a little early or chase stocks if I missed
the breakout. So instead of starting with a nice gain, I often started with
one foot already below the thin ice I was trying to walk on.
Fixing that one problem has made a huge difference, enabling me to
launch new stock positions on more stable and solid ground.
Psychologically, it’s much easier to make sell or hold decisions when
you’re sitting on a gain. When you have a loss, self-doubt—plus a mix of
hope for a quick rebound and fear of an even bigger loss—can creep in
and prevent you from making a level-headed, objective decision.