The Stock Market

[RayKingsForemanGrill]

I don't know if we can make this an unofficial/official thread, but it may be helpful... I'm fairly new to the stock market. Tinkering here and there. And am still a true novice as to how much of it works. But here's a current situation. I bought about 300 shares of a stock when it was at varying price ranges from .030 up to $1. That stock is now over $3. They recently reorganized its leadership and it seems to be working. Having said that, it's a retail outlet that you still hear rumblings of potential bankruptcy, etc. With a retail stock like this, how do you judge when to get out? It's tempting to sell now and take my bit of earnings I've made. But within the last two years it was as high as $25. Last year it was at about $10. How dod I accurately judge when to bail? I don't want to get out too soon...

[FVBrewerFan]

No, you don't want to get out too LATE. A stock trading in the 20s historically down to 3 cents is not very encouraging. It's up to $3 now, still way off it's norm. And you say there's still rumblings of bankruptcy? I would walk away....no RUN away.

[Giraldo8]

It really depends upon your risk tolerance. If the $300 or so you spent on the 3 round lots is a big purchase and you are thrilled with tripling your money, do as the previous poster said and sell immediately. If you're looking to find the next hot stock and don't mind the risk of losing your initial investment, then I suggest staying put. However, with talk of bankruptcy pending, I'd be happy with the profits and walk away slowly. It does all depend on the stock however.

[RayKingsForemanGrill]

Yeah... I'm sorry... I meant 30 cents... it was never down to 3 cents...

 

Having said that, I am pretty happy with the small earnings. And this advice seems to be pretty consistent with what others have told me... I'm just excited to see if it gets up to $4.

 

I think I'd sell it in an instant at that point...

[dadofandrew]

Ray, a look at the balance sheet should tell you whether or not bankruptcy is close. Shoot me an e-mail or PM me here if you are not sure what to look for.

[ajgodson]

I've got a pretty similar situation -- bought some Citigroup on a whim at $1 -- and it's about the same situation. Ultimately, I've decided to hold onto it to see what happens. It's a pretty small part of my investments and if it goes to zero it's not a huge deal. The possibility that in a few years it's at $10-20 could be pretty cool. So it sort of depends on your risk tolerance along with what the financial statements tell you. Best of luck!

[nate82]

You could use a stop-limit order at a price to protect your gains. Lets say you bought the stock at $1 and it is now trading at $5. You would like to get back at least 3 times what you paid for the stock so you would put a stop order at $3. If the stock goes to $3 or below it will trigger a sell order. This way you protect your gains while still having the luxury to cancel the stop-limit order if the price goes even higher.