Q: I’ve been a VoSI subscriber for almost a month now, and will certainly continue. Most of the recommendations since I started – CTXS, VMW, CRM, FFIV, VRX, PCLN, ROVI, ALTR, RAX, TTM, CYT, EBIX have performed extraordinarily well, even in the context of the S&P and NASDAQ being up about 9% and 13%, respectively, during the same time period. M&A rumours for many of the stocks in the selection have also helped. But nevertheless, your picks have done very well.
However, I’ve not been as successful as I should have been, and the fault is mine because I have not been able to discipline myself to stick to the position, particularly during the several down days for many of the recommendations during September. I know I have to cure this weakness if I am going to be successful at this type of investing. Do you have any advice for me in that regard?
Gil A: I think the key is to stick to core positions, using key moving averages to cut back or add around the core in order to manage your risk and take advantage of rapid price moves when they occur. I have forwarded your email to Dr. K for his view of the matter.
Chris A: Create sell rules that fit your risk tolerance levels. In other words, make rules you can live with, that you wont break, but rules that also wont cause you to sell prematurely or hold too long. The art and science of selling right can be like walking a tightrope at first, and requires understanding yourself, your trading personality, and your risk tolerance levels. We discuss sell rules in greater detail in the FAQ portion of the website as well as in our book.