Friday, September 15th, 2006
Explosive CANSLIM stock update: the importance of cutting losses
Since last Friday our 10 explosive CANSLIM stocks have had a mixed performance as shown in the table below. SWHC turned out to be a big winner, rising 20 per cent in just 5 trading days. But losses in SPSX and NEU dented overall performance.
If I had put $1000 into each stock and assuming no brokerage, the return for the week would have been 2.3 per cent. Not bad at all. But now assume I had cut losses on NEU and SPSX at 5 per cent, the return would have been 3.26 per cent. That’s a whopping 42 per cent higher, which over time adds up to a massive difference in return.
The performance of the 10 CANSLIM stocks is a pretty normal distribution of returns. That is, a few big winners, a few big losers, and the other trades middling. The way to get ahead is to sell losers early.
Word Count: 150. This entry was posted on Friday, September 15th, 2006 at 6:55 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
