So I have been dragging my feet on selling Sandisk. Last week I was looking for the towel and today I sit with the stock still. You never can predict luck. This morning the company announces that they are buying back $300 million of stock. Some analyst says he thinks they can beat estimates coming up and like that the stock is off and running yet again. One part of my brain says, "stick with the plan and sell. Take the loss and move on. You are down enough and that is the smart thing to do." While the other half of my brain is screaming, "the quarter’s numbers will be great, end of January, sell now and you will be watching it climb all through February." And in the mist of those two competing voices the margin interest keeps a humming its own little tune.
All said and done if I wait and cash out at $45.73 I pretty much break even. That is if we get to $45.73. The only thing I would lose is a few pennies of margin interest and two months of time. Anything over $45.73 is some kind of profit. The problem is that I don’t have hard and fast trading rules. I know, I know, all the books say you are supposed to have rules. After all that is how the “pros” do it. There in lies the problem; I am just your average guy battling my own fear and greed demons.
If I am right and this stock buy back plan puts a floor under the stock we should move up from here going into the earnings announcement. If the earnings and gross margins are good then Sandisk continues to climb into February. Maybe. If the numbers are bad or even mediocre then everyone says, “I told you so”. If that happens then $44 won’t even be a bus stop on the express way to the $30’s. Maybe. All I need from here is a little over 4% to the good and I could get out without a loss and watch it all play out from the sidelines. The problem with that is I have found the view is never as good or as rewarding when you are on the outside looking in. So for now I am still dragging my feet on selling. Peering out from the inside at those on the outside watching that have nothing at risk.
Do you have and follow hard and fast rules with your trading?
That’s it for today. Here’s to being part of the game. Take a risk and keep your eye on your EveryDay Money.