Who doesn’t love cash cows?
In Episode 29 of The Ren Men Show, we discussed our buying strategies for the stock market, invest in a few companies, pay attention to the trends of the company, and schnitzel (feel free to sell in order to make a profit).
One 8/12/10 we bought:
160 shares – JPM at $37.72 for $6,043.46
29 shares – AAPL at $249.32 for $7,237.28
On 9/8/10 we sold:
160 shares – JPM at $39.312 for $6,282.81 = 3.96% (factoring in trade commission)
What have we done with AAPL? We are glad you asked. Our answer needs to be prefaced by the definition of a Trailing Stop Limit which is designed to allow an investor to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. A SELL trailing stop limit moves with the market price, and continually recalculates the stop trigger price at a fixed amount below the market price, based on the user-defined “trailing” amount. The limit order price is also continually recalculated based on the limit offset. As the market price rises, both the stop price and the limit price rise by the trail amount and limit offset respectively, but if the stock price falls, the stop price remains unchanged, and when the stop price is hit a limit order is submitted at the last calculated limit price.
We have since put a trailing stop limit on AAPL at 1% below 262.39. So if, AAPL falls by $2.62, our TSL order will be triggered. If however, AAPL continues to rise, our TSL will rise as well. Let’s say AAPL would spike to $300 tomorrow. Our TSL would move up with the current stock price. The result would be anytime AAPL fell 1% below $300 ($297) our TSL would be triggered. TSL’s not only lock in profit, they continually lock in even more profit. (As this is being written AAPL is at $266.17)
Our goal is 3% increase from the month prior. On average, we have met that goal. Currently, our portfolio is up 11.86% after three months. We’ll take it.
On 9/9/10 we bought:
PWE BUY 175 PWE @ $17.8799
FAZ BUY 50 FAZ @ $13.55
FAZ BUY 200 FAZ @ $13.55
Thoughts? You call bull$h!t? Leave them below…
**Update**
Our TSL triggered on 9/9/10
AAPL SOLD 45 @ $263.85 Total: $11,866.04
Total Profit = 5.53%
Out TSL triggered on 9/10/10
Sold 175 Shares PWE @ $18.94 = $3,307.42
Bought at 17.88
Return 5.47%
TRM