1Mon·

Learning the hard way

Owning individual stocks, can lead to better returns than indexes if very well managed… but the pain if one of this stocks is hit, is also higher.

10 days ago I was celebrating my 2 years investing, with an excelent performance against indexes, and I noted that some stocks like $APP (-10.12%) were responsible for that.

Well… after losing more than 40% in two weeks $APP (-10.12%) it is also responsible of my high underperformance this last 2 weeks.

I was (and still am) sure that $APP (-10.12%) is a winner In their market, but I was also convinced that the price was too high at that point. Thought of selling but I sticked to my initial idea of holding winner companies for the long therm.

Well, 2 times is going to be enough for me. Last year I experiencied the same with $SMCI (-8.46%) , super price to enter, skyrocketing to the sun and getting burned after a short report. Same history with $APP (-10.12%) …. I’ve had both stocks with +1.000% gains and lost half of this for not selling when I thought was a good moment, so it is time to switch strategy.

Holding winners is a must, and it is still going to be part of my core strategy, but holding them for too long into clear overvaluations leads to oportunistic shortsellers to kill the momentum, and when the momentum and forward earnings can’t hold a stock valuation any small turbulence leads to fear and price crash, at least that’s what I’ve seen with all my “crazy” winners. 1.000% is a lot in a couple years, and if it gets to that I’ll make sure that valuation still makes sense or I’ll take profit and maybe enter when this crash happens.

8 Comments

Marcel@di_marcello

1Mon

So if i understand correctly, your new strategy is to evaluate 10 baggers and take profit if it is a good moment.
Sounds like the same strategy like you already follow to me to be honest.

You thought it might be a good time to sell this time, you just didn't because you were also convinced of more growth.
And btw, your strategy is quite solid in my eyes. Keep growing strong!

•

Carles@Carles

1Mon

@di_marcello well, until now I have been trying not to sell a winner if the momentum was intact, even when it got clearly overvalued. That just happened twice since I’m invested, and both times I got burned.

Of course it can happen that I don’t find a $SMCI or an $APP, the comment is just for cases like this.

For the rest, same same, it is working fine for me!

•

Nik_vestor@Nik_vestor

1Mon

@di_marcello It is about Greed vs fear index. We all fall into the grid trap but I agree taking profit is key here with hypergrowth stocks.

••

KingC@RaphGM

1Mon

$AAPL did not lose very much in the last 2 weeks.
But I see at least 3 of your top 4 that actually did, but that you kept in portfolio.
So you probably sold the wrong position, what do you think?
Have a look at $UAL $CLS and $APP .

Or do you think those three companies have a brighter future than Apple?

••

Carles@Carles

1Mon

@RaphGM not $AAPL (Apple) I don’t own Apple. I meant $APP (Applovin). It went from 510 usd to 305… that’s a 40% drop.

$CLS $UAL, $POWL and $STRL are also underperformers last weeks, but I was not up 1.000% on them, they didn’t have such an explosive growth and the most important part, they are not overvalued in my view (at least not as $APP has been). They’re keepers, $UAL just took a breather and the others are AI infrastructure stocks that got hit by deepseek’s fear, but forecasts are still intact, even on their earnings call presentations…

This 4 stocks still have good fundamentals and I’m a long therm investor. What I meant is that if there is an oportunity like selling at a 1.000% profit (it was 1.250%) and the stock is way too expensive even with the growth story behind it, I’ll just sell and wait for another entry. $APP despite the short report is a magnific company, but it got to hot.

•

KingC@RaphGM

1Mon

@Carles sorry my bad, I mixed up the tickers 😅

I think, judging from the graph you shared (I guess a 1Y graph?), the performance looks good, you should stick to your strategy.

••

Carles@Carles

1Mon

@RaphGM 2 year graph, it just would look better if I sold $APP and $SMCI when they were burning jaja! They’re the only 2 stocks that I’ve been with my finger on the sell button with a conviction that they were way too expensive, but ended up holding. Just part of the learning process.

•

KingC@RaphGM

1Mon

@Carles 2 years, looking nice 👍

I wish you a continued success! 🙂

•