Friday, November 2, 2007

Volatile Is Not the Word... Use Trailing Stop on KEPCO Position

Green Investments has weathered some pretty bizarre markets thus far. It so happens that I launched this blog toward the end of a very long bull market.

Since last Christmas, this bull has slowly gone into what I believe are its death throws. Soon it will be replaced by something different. A long period of up-and-down volatility followed by a year or two of slow times.

This is where our approach to the markets will get a real test. Anyone can be a stock-picking genius in a broad bull market.

So how do you survive and thrive through a bear?

How Do We Survive This Crazy Volatility?

Use trailing stops and stick to your discipline.

In that interest, we're placing a 25% trailing stop beneath our KEPCO (KEP) position. That means we'll sell if the position closes 25% (or more) below the highest closing price since recommendation.

We added KEP to the portfolio at $22.66 and it has drifted down a bit since then. So our trailing stop will be $16.99 to start.

That means if the stock continues down and closes below $16.99, we'll sell on the next day's open.

Good day,

James

1 comment:

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