Wednesday, January 17, 2007
Rack of Pain
Up 0.3 percent today. I don't know what I was thinking. I bought 500 shares of RACK this morning. I'm not even sure why. It's not the sort of company that I would normally purchase. The stock gaped down 35 percent and I just figured it would bounce. It didn't, and I am now $700 down on this position. I guess I will hold until the company releases earnings in a couple of weeks. I need to avoid being impulsive with my trades, it has gotten me into trouble before and I need to cut it out. In better news, I picked up 1200 shares of CPE this morning and the stock proceeded to rally higher, so at least on paper that offset the RACK blunder.
I used to continuously scold myself in exactly those words -- "don't be impulsive". I used to always be tempted to buy companies that gapped down big for a bounce. Then I enforced a rule on myself that always works -- wait at least 3 days from the gap down for a tested bottom before even considering buying for a bounce. Now I consistently win on these plays.
I think RACK will rebound if you hold for a few months. The business is still good and the conference call should shed some light.Post a Comment