The Night of Miscalculation and Follow-Up Measures (Game on December 11)
This is a continuation of the article from December 9.
In the article on the 9th, I wrote about my intention to withdraw funds from certain assets in my current portfolio that seemed to be losing momentum after reviewing the closing prices.
I executed this plan on Wednesday, the 10th.
I liquidated two securities, plus a small position in one additional security.
However, there was an unexpected miscalculation in this decision.
No losses were incurred.
Nevertheless, this was undoubtedly a miscalculation.
I had underestimated the FOMC.
One of the securities I liquidated surged significantly following the interest rate cut announced at the FOMC meeting.
I did not expect that stock, which had been sluggish until now, to rise so much due to the interest rate cut.
That stock is WDC.
I took profits on WDC at $172 on the 10th.
However, following the announcement of the confirmed interest rate cut, WDC surged.
The closing price was, astonishingly, $181.95.
Rather than underestimating the FOMC, it would be more accurate to say I underestimated WDC.
When I saw the closing price and the flow of the chart, I anticipated that it would continue to rise.
The amount I secured from taking profits earlier is insufficient to repurchase the same number of shares.
However, I cannot shake off the feeling that it will continue to rise.
If I leave this alone, it would result in a 'missed opportunity' loss.
Although the number of shares I can purchase will decrease, I have already taken profits once.
No losses have been incurred.
At this point, there was no time to worry about the average acquisition cost.
Indeed, the price surged, but some investors were expected to take profits.
In reality, the stock price had declined in after-hours trading.
Although trading volume was low, there was no sense of manipulation or deception.
Even if it were a deceptive move, with 24-hour trading available, placing a well-timed limit order could allow me to capitalize on the decline.
Most likely, the price would drop at the opening.
I will aim for that moment and look to repurchase skillfully.
My limit order was set at $175.05.
The day's low was reportedly $173.446, but it was certainly unrealistic to expect to hit that price.
The outcome was determined within an hour of the market opening.
The purchase price, including commission, was $175.29.
The closing price for the day was $187.20.
This allowed me to avoid opportunity losses.
At times, it may be more advantageous to prioritize the dollar amount of returns over the percentage yield based on the average acquisition cost.
Although the number of shares acquired decreased by two, the unrealized gains clearly increased.
Other stock holdings are also performing well.
Thus, the night of follow-up trading came to an end.
Tonight, I will use the remaining funds to purchase two more stocks.
I wish you all good returns.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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日向ぼこ : Today’s market was quite challenging, and I got stopped out again on several positions. With my portfolio finally starting to stabilize, it looks like I’ll need to rethink things from scratch. I’m counting on dividend-paying stocks to pull through.
182287265 : Good morning, Sirius. Yesterday, the market was generally down. Which two stocks did you purchase? Is LITE still your top priority, or do the two new stocks you plan to buy take precedence?
sirius2xanadu OP 日向ぼこ : The decline yesterday was unexpectedly challenging for me as well.
The drop expanded in scope following the ORCL shock and the subsequent AVGO shock.
If you held onto your positions, it might have been better to simply wait it out; however, if you were stopped out by a trailing stop order, then there wasn't much that could be done.
Nevertheless, if you find a stock with good prospects, you can consider buying back after identifying a bottom.
The potential hasn't disappeared.
I believe this outcome occurred because a surge of selling likely prompted panic among some investors, who then joined in the selling.
In any era, there will always be many people who engage in panic selling.
There are also those who remain at an amateur level no matter how much time passes.
Therefore, I think such situations will continue to occur in the future.
It may be necessary to learn how to endure these periods.
For dividend stocks, take a look at COHN.
Generally, MO or BTI are the dividend stocks to buy in December.
Although both go ex-dividend around the same period, BTI's dividend payment timing is later. Please compare how many shares you can purchase within your budget and the resulting dividend payouts before making your decision.
I hope things move in a positive direction.
sirius2xanadu OP 182287265 : Following the ORCL shock, there was a AVGO shock yesterday, leading to a steep decline.
Most stocks are down.
We have purchased TTMI and CIEN, but due to the overall market downturn, we are currently in the red.
However, apart from these two stocks, our holdings remain profitable, albeit with reduced gains.
Since the fundamentals remain strong, we intend to maintain a solid stance moving forward.
Mining stocks were particularly clear.
HL, IDR, ARMN, and IAG ended with bearish candles, but their chart patterns have not deteriorated.
These are likely mining stocks with high expectations.
182287265 sirius2xanadu OP : TTMI and CIEN have been bought, haven't they? I am also interested in both of these stocks, but since I currently hold LITE exclusively, I am contemplating selling a portion of it to purchase TTMI or CIEN. It might be fine to continue holding LITE alone, but if TTMI or CIEN show stronger performance than LITE, I would like to buy them. However, Micron's earnings report is still pending, and there is concern that if the results disappoint, the market may decline again. It seems difficult to make any moves until after Micron’s earnings release.
sirius2xanadu OP : If considering LITE alone, there is no need to sell at this moment to make a purchase.
This is because it is questionable whether it will become that strong.
It is merely for diversification purposes.
182287265 sirius2xanadu OP : Yes, I believe LITE will remain independently strong for the time being. It is indeed robust.