Monday, January 15, 2018 (Markets Closed)

Monday, January 15, 2018

U.S. markets are closed today, in observance of Martin Luther King Jr Day.

Since Christmas, when I was up nearly 20% over a two week period, I've lost my gains. This clearly shows that greed will beat you in the end. Had I taken some or all my profits at some point, I'd have kept the gains I made. Instead, I watched as the stocks I held took a serious turn, and continued to watch as I told myself, "They'll come back. I know they will."

This is a classic rookie mistake and I can't believe I let myself do it. In any case, I'm the wiser now.

Since then, I've learned to ditch my bad performers and I've learned to more carefully watch those that have lost their momentum. If a stock just wanders, then I cut it loose. Sure, it's not doing any damage while it just sits there, but as long as I hold it, I maintain the risk that it'll go south on me. Better to ditch a non-performer and drop the risk to zero.

What I'm Currently Holding

I current have 2 ETFs and 1 stock:

• XTN:
  SPDR SERIES TRUST S&P TRANSN ETF ($68.96)
  This closed Friday, up 0.06%
• GULF:
  WisdomTree Middle East Dividend Fund ($18.49)
  Closed Friday, up 1.01%
• JSAIY:
  J. Sainsbury PLC ($14.00)
  Up 2.94% for the day on Friday

I bought the two ETFs simply to park my money somewhere while I figured out a better strategy. Looking them over, I figured it'd take about 3 business days, given their recent performance, to restore my capital back to my original investment. (Not only had I lost my gains, as mentioned above, but I had eaten into my original capital.) Fortunately, the ETFs performed well enough that by the close of trading on Friday, I had not only restored my capital to its original level but squeaked out a modest gain of a smidgen over 1%.

The breakdown of my portfolio is:

     JSAIY:     34%

     XTN:       32%

     GULF:      25%

     Cash:       9%

Next Steps

As mentioned, my next (and current step) is to re-evaluate my selection process and tighten up my exit strategy. Towards that end, I have:

• Set aside firm rules for stop orders:
• 1% of portfolio value, below original purchase price
• As stock moves up, re-calculate stop loss and replace existing stop loss order
• Started to evaluate exit plans when things go well. For example:
• Once the price exceeds a predetermined value, take a pre-specified amount (say, 50%) of the profits and pocket them.
• Continue educating myself on other strategies.
• Continue educating myself on various screeners, chart patterns, etc.

And, I've become acutely aware that going into a position and then having to bail just a day or so later is really eating into my stake. So, in lieu of anything idea more sophisticated (nearly any rule is better than no rule at all, I fugure), I'll limit myself to 4 trades a week. This should allow 2 round trips a week. Of course, after a week or so, I can adjust this figure, if necessarily. And, when I come up with a better plan to manage commissions paid out, I'll scrap the current plan and implement the newer one.

Also, I expect to let my current holdings ride another few days at least. The two ETFs are a good place to park my money. And, as long as JSAIY keeps eeking out a little profit every day, it'll stay unless or until I find something else that performs better (and given the steps I'm taking above).