Thursday, January 25, 2007

When Do you Sell?

For some stocks I know the answer – never. Companies I own such as TD, GWO, POW, CSH.UN, TRP and PFE I don’t ever plan to sell. Now some of you may be wondering “Why on earth would I plan on holding those to the grave? Won’t there be an optimum time to sell and rebuy?” Well ya there probably would be an optimal time but if your smart enough to figure that out than stop reading this stupid blog, go make a few hundred million dollars and retire in luxury. Additionally, I plan on holding the above stocks for their cashflow. For example, I’m now making 6.1% in dividends from TD (based on my initial buy price 5 years ago). What kind of yield will I be making in 2012? I’m betting significantly higher than 6.1%, not a bad return in my opinion plus the share price has appreciated about 150%. Now compare that to a 10 year government bond maybe 5% (if your lucky).

Now that brings me to all my other holdings. The more cyclical, resource based companies. Historically, I’ve been pretty good at buying (and mediocre at selling) but how do you know when to sell. Who hell the hell knows? But if you want my opinion on it I think that oil and gas stocks are going to be range bound for the next little while. So after writing this I’m going to take a good hard look at TLM and decide if selling some might be in order.

Remember you don’t make anything until you sell and there is no shame in taking a profit.

(Disclaimer: I’m not your boss or your spouse so do you own research and make your opinions on when to buy or sell. Nothing I say should be bastardized or construed in any way to be advice.)

7 comments:

Canadian Dream said...

MCM,

I'm playing the same game right now. I'm siting on an oil and gas income trust that is just doomed in the long run, but I'm getting 18% yeild on right now. So when do I pull the trigger? I'm holding for now until things settle down a bit in Ottawa.

CD

Middle Class Millionaire said...

That's a hard call - 18% (in this interest rate environment) is very suspicious...when is the distribution cut coming....

Jack said...

Smart investors know high-dividend stocks are winners in the long run. You should check out:

http://www.dividendachievers.com/

Middle Class Millionaire said...

Thanks jack I've added that site as a link.

Jack said...

Looks like the comment section cut off the ".com". Hmm.

Canadian Dream said...

MCM,

Yes my thought exactly. They can't keep the distribution up for too long and when they cut it the stock is going to tank. I'm hoping to get one more payout before I bail to cover my trading fees and take my losses and move on.

CD

QUALITY STOCKS UNDER 5 DOLLARS said...

Nobody really has the answer to that question.