Well yesterday after long consideration and discussion with my spouse we took a loss and sold the losing income trust from her account. The stock, HTE.UN, was drowning in debt and giving out huge dividends that I don't see being sustainable even in the near future.
So if was time to admit to ourselves, we messed up and it was time to suck it up and take the loss. In order to have some exit strategy, we collected enough dividends to cover the selling and buying fees and then watched the market. As the stock was heading up this week, we thought a sell price of $26.50 would be fair. Enough cash to cover some of the loss, but not so high as to be unreasonable.
Much to my surprise the trading day yesterday drove it up past our sell price by $0.09 and it was sold. Then I watched the price drop down to $26.30 and that was when I starting to feel a familiar feeling. It was the feeling of predicting anything and being right. Yes folks, it was pride. As soon as I realized that I gave myself a little hit upside the head. Idiot, you got lucky and we still lost around $500.
That ends the lesson for the day. I can not predict the stock market and even with your best intentions sometimes things go very wrong. So be smart and know when to take a hit.
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7 comments:
So you decided to sell (one of the hardest things to do in my opinion). We chatted about this before but... an 18% distribution is very suspicious.... (for what it's worth)I think it was a smart move getting out.
MCM,
Thanks for the vote of support. Selling is a lot harder than buying, it must be how we approach risk.
CD
(For confused readers, check out MCM's blog. We had a discussion a while back in his comments.)
Don't beat yourself up too much -- we all are going to make mistakes.
It's whether you learn from them that's key. I had a similar experience myself recently and you're right -- selling at a loss feels like a personal hit to our own pride sometimes.
You're listed on Technorati now! Congrats!
FT
FT,
Yes, the got me fixed up now. Some sort of technical error.
GIV,
I'm not beating myself up too much. I'm already starting to plan with the wife what to buy next.
CD
OUCH - I need to sell that very same income trust. And frankly, I don't think either of us made a 'mistake' on this one. It was a pretty solid company. The gov't stated they would not axe income trusts. We all used our best judgement and not even the best of us (of whom I am not one!) foresaw events happening as they did - so swiftly, anyway. Oh well -- it was sure a sweet ride while it lasted.
Nancy,
Correction, it was a solid trust. It will die a painful death when it becomes a regular company unless it does some mircle work.
Yes, the distribution was nice while it lasted.
CD
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