When to sellHello,
I was investing in Gold in 79/80 during the mania. Haven't been into gold since than till this year.
In 79/80 I sold too soon. I just couldn't believe it would go up anymore, but it did.
The key that I missed and failed to understand at the time was the mania. It was the investor mania that drive penny sticks to x10 and x20 rises. In the mania Technical Analysis breaks down and Fundementals will fail....
1. If there is no mania, no panic you haven't reached the critical stage yet and the action is just another normal up/down in an advancing trend. Play it as such, buying on weakness and selling into strength. DO GOOD DD on anything you buy. BUT as the blowoff gets nearer even the trash stocks will take off, speculation will become wild, take advantage of that. There is still TONS of money floating around in the market that will be looking for a "safe" place.
2. Don't sell to early. Watch the momentum and the volumn. When these start to slow down sell. Don't try to time or pick the top. I've taken some good advice that serves me well. I always try to leave some advance still in it for the next guy..
3. *** Have alternative communications arrangements made so you can communicate with your broker **** I can't state how important this is. Its no good wanting to sell if the phone lines are always busy and their server is overwhelmed (as it will be in a mania) and their transaction time has gone from a few minutes to God knows what. At the minimum have someones personal phone number on the phone sitting on their desk or someones personal fax number and/or e-mail. You'll pay more in commissions for this personal service but it will be worth it. Continue to use the cheaper services (on-line trading) for now but be ready for when this may fail you...
many folks couldn't get thru to their broker in 79/80 and the same things happened in recent severe market declines to folks who wanted to sell..... they could get thru..
I personally am looking for a minimum of x10 advances during a Mania and as I believe that time approaches will take increasingly speculative positions in penny stocks as these provide, in general, more BANG. I would note that it still could be several years for this type of mental condition to develope in the public investor, When CNBC talks about the growth of gold you know the time is near. Until this condition developes adopt trading stratigies as noted above, look for bargins, sell strength..
Thanx