Buy, Sell, Hold or Make Sweet Love to Apple?
I never give a specific answer. There's no one size fits all in these situations. It's a deeply personal decision.
What's your financial situation? Are you hurting for money today to live? Do you support a mistress as well as your wife and kids? What's your conviction on the stock? How do you balance that sentiment with reality? What do you do for a living? How much do you make? Is your job secure? How's your cash flow? The list goes on.
There's no standing answer to situational questions of what to do; however, I'm comfortable calling a couple relatively broad themes universal.
First, now is not the time to make the decision on an existing AAPL position. You should have charted that course of action before you bought your first share. It absolutely should not come during a time of crazy emotion. Your emotion. The other guy's emotion. Wall Street analysts' emotion. The media's emotion. My and Jim Cramer's emotion .
Because, even if we say we're not emotional , at some level, we all are. Even if you take profits or you buy the dip or you act all aloof and indifferent, emotion drives who you are.
Don't fool yourself. You can't escape emotion. The most straight-faced, hardcore, disciplined day traders -- emotional beings. It's not about whether or not you're emotional; it's about how you control that emotion.
In investing, this process of control must be constant. It's focus No. 1 from position entry to position maintenance to exit.
You bought AAPL at $XXX and you will sell this much at $XXX (on the up or downside). You're scaling into your position at X levels Y times a month, quarter, year and you will scale out when this or that happens.
Whatever. Have a plan. Write it down. And hold yourself to it when the time comes to act. No regrets if you leave money on the table or the thing ends up running after you sell. Over the long run, this type of discipline protects traders and investors from catastrophic losses.
It safeguards them from a phenomenon I wrote about back in April on TheStreet.
During that time I got some stuff about AAPL right, some stuff wrong, but I was -- as I am now -- near-term bullish on the company, long-term bearish/cautious. Admittedly, today I am not quite as bullish near-term (how could you be?) and not quite as bearish long-term ( where's the competition? ). That aside, here's the "warning" of sorts I issued in April :
Important Note : I wrote these words in late April when it seemed all AAPL could do is go up. Longs were throwing 1980s coke parties and snorting stock certificates off of glass coffee tables. But, since that article, AAPL is down roughly 17%.