BHP Billiton in past 3 months. Australia's largest company. Stock
performance has been horrific. I just established a position after years away.
See the rect low at $45.13? If it drops below that price, for several hours, I
will sell half the position. If it closes beneath it, the rest gets sold. That
is putting on a tight stop, and is done with very high risk
stocks.
For a solid company with good technicals, I would ADD to the position if it dropped. One cannot treat highly marginal stocks, and mediocre companies, in that way, and especially not on margin. Losers must get dumped quickly. Winners get trimmed, and then you "kept the rest run" when the initial investment has been "taken off the table."
Tim Seymour on Fast Money recommended Freeport-McMoRan several days ago. I have owned FCX for years, often at a loss, and received good dividends. It is a way I play not only copper and moly, but gold. Billiton is v high risk, and I have heard no one recommend it. Hence, this is a "highly contrarian play." I like having at least some money in a speculative if high risk stock. Billiton's assets? Over a 5% dividend which it has a history of raising. And the company has vast resources: coking coal, petrol, uranium, iron ore, aluminum, copper, gold, precious minerals, etc. As the world has been in a long, slow DEFLATION, most commodities have dropped in price (the grains have held up), and the US dollar, in which commodities are priced, keeps strengthening. So this is a high risk investment.
Hence, a very short leash. I can always sell the shares, and buy them back either more cheaply, or once the stock has established a new uptrend--the only way to buy stocks as recommended by IBD. Even then any loss of 7%, DUMP the stock, says IBD, to preserve capital. The foremost goal in responsible investing is always CAPITAL PRESERVATION. Only secondly can the goal be capital appreciation. I have no intention of losing the thousands of $$ I invested in Billiton. "You date a stock, never marry one."
For a solid company with good technicals, I would ADD to the position if it dropped. One cannot treat highly marginal stocks, and mediocre companies, in that way, and especially not on margin. Losers must get dumped quickly. Winners get trimmed, and then you "kept the rest run" when the initial investment has been "taken off the table."
Tim Seymour on Fast Money recommended Freeport-McMoRan several days ago. I have owned FCX for years, often at a loss, and received good dividends. It is a way I play not only copper and moly, but gold. Billiton is v high risk, and I have heard no one recommend it. Hence, this is a "highly contrarian play." I like having at least some money in a speculative if high risk stock. Billiton's assets? Over a 5% dividend which it has a history of raising. And the company has vast resources: coking coal, petrol, uranium, iron ore, aluminum, copper, gold, precious minerals, etc. As the world has been in a long, slow DEFLATION, most commodities have dropped in price (the grains have held up), and the US dollar, in which commodities are priced, keeps strengthening. So this is a high risk investment.
Hence, a very short leash. I can always sell the shares, and buy them back either more cheaply, or once the stock has established a new uptrend--the only way to buy stocks as recommended by IBD. Even then any loss of 7%, DUMP the stock, says IBD, to preserve capital. The foremost goal in responsible investing is always CAPITAL PRESERVATION. Only secondly can the goal be capital appreciation. I have no intention of losing the thousands of $$ I invested in Billiton. "You date a stock, never marry one."
