Thursday, April 21, 2016

Selling half my position in Orocobre for a 100% gain

When speculating in resource stocks I have a rule that if I get a 100% gain I take profits in half the position. I then let the other half ride with a 25-50% stoploss on the remaining shares.

I think this is prudent. We are dealing with resource stocks that are involved in mining and carry quite a bit of risk. These are not triple A rated government bonds.

Taking a profit after a 100% gain allows us to recoup our original capital while allowing for the opportunity to capture any upside. There are just too many risks with mining stocks; operational, political, commodity pricing, etc... to not be prudent.

I have learned the hard way and gotten greedy in the past and lost tens of thousands of dollars trying to capture all of the upside in these stocks and then have an unforeseen event come along and cause me a big loss. Take your profits, capture your original capital and let the the rest ride is the way to go.

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