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You can never go broke taking a profit

JunksterJunkster
edited October 2014 in Off-Topic
That's by far my least favorite trading adage. Probably because I always remember Livermore saying while you can't go broke taking a profit, you won't get rich doing so in a bull market. In other words, always let your profits run. And then as Darvas once said, when the trend changes, run like a thief. Still, will play the hypocrite here and since junk munis are severely overbought, think I will take 10% off the table today.

Edit: The whole thesis behind junk munis this year was shortage, shortage, and shortage of issuance and the fact an improving economy would help municipalities. That thesis may get revised if fears arise we won't be seeing an improving economy.

Comments

  • VintageFreakVintageFreak
    Yup! Another way to say is "You never go broke paying taxes". I learned it the hard way, but learn I did, and is why I have took some profits over the past couple of weeks and glad that I did.
  • JohnChisum
    I've been stoking the bond side of the portfolio with profits from the stock side since this summer. When the markets kept going up I questioned my actions but now I feel vindicated in a way.
  • CharlesCharles
    Ha!

    A problem of the privileged investor.

    Congrats Junkster.

    Keep doing what you do.

    c
  • JunksterJunkster
    edited October 2014
    Thanks Charles. Not sure I ever took a profit in a rising market like this before. And it's been bugging me all day that I went against my protocol. I'm not much for the technicals, but the 14 RSI was over 90 in this sector and that was before today's continuing surge. This year that has meant some type of mild correction was around the corner. Even though in my favor, truth be told, I think the wild gyrations today in the Treasuries got to me like nothing before. Not even like in the crash of 87 or the meltdown in tech in 2000-02. Much be the signs of an aging trader. Interesting times indeed.
  • MikeMMikeM
    Junkster, in keeping with your system, why not just put a sell order in for that 10% with tight limits instead of letting 10% go on bad vibes? Even tightening to a half or quarter % drop might do the trick w/ in your system.
  • JunksterJunkster
    edited October 2014
    Mike, our posts just about crossed. I was going to say if anyone thinks the selloff in equities is overdone, then the selloff in junk corporates is even more overdone. I lucked out (maybe) on that 10% because the ETF junk munis are really taking it on the chin today (of course junk open end and junk ETFs can diverge at times) I was worried if things really deteriorate then junk munis have to succumb at some point - plus they are massively overbought, even before this recent surge. I may take more off the table today depending on what happens with equities, the junk muni ETFs, and Treasuries. But then who knows. I enjoy seeing some here post trades but not sure it's my cup of tea anymore as it detracts from my concentration. And as you know, you can't put in a sell order in based on price with the open end which I trade. For better or worse, bad vibes equals intuition.

    Edit 11:01 EST - Obviously the day is still young, but yesterday's early morning wild spike down in yields is looking more and more like some type of major bottom for bond yields.
    But then a forecaster or predictor I'm not, so time obviously will tell.

  • franktrdr
    Junkster: You mentioned something in an earlier post about a "lag" in the pricing of junk muni mutual funds. I am in VWALX and SNTIX and have noticed that the prices of these funds are on some days at odds with the closing prices of muni ETFs like HYD and PZA. My mutual funds might be unchanged or down on a day when HYD closes up, and vice versa. Is this the pricing lag you you're referring to? I can't tell if this is a regular daily anomaly or something that happens sporadically. HYD and PZA seem to be reversing today, but will junk muni ETFs reverse today as well?

    I've also noticed that the end of day prices of VWALX and SNTIX are usually available much sooner after the market close than are the prices of other bond funds I follow like VWEHX, WHIYX, MWHYX, PONDX. and DLTNX, whose prices finally appear a few hours later.
  • JunksterJunkster
    edited October 2014
    You have done well in SNTIX and VWALX as well as PZA as you posted you held them back in August. Congrats on that. The lag I refer to is more in reference to days where there is some major negative or positive news event which impacts the markets and you see huge moves in the ETFs. Often times the follow through in the cash junk markets (NAV) is the next day.

    Its a real inexact science on a day to day basis figuring out where the open end will be priced compared to what has occurred to the ETFs. As for time of day pricing yes, SNTIX is among the first to price but it's not hours later for the others. At least if you are using your brokerage account such as a Scottrade for the prices.
  • franktrdr
    Thanks for the comments. It will be interesting to see if the big move in HYD today carries over into the mutual funds today or tomorrow.
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