My strategy is simple. Being an unsophisticated proletarian investor, I want my stock for free. Do you think it is impossible? Not really! It is just a strategy that professional investors consider simply wrong:
I buy a stock, and as soon as that stock has a price increase of 30%, I sell part of those shares to put back in my pocket all the money I spent in the first place. That Way I end up with free stock.
Professional investors consider it a wrong strategy, because that way I end up with lots of bad stocks (those which don’t grow 30%) and have small amount of the good ones (those which do grow 30%).
They are maybe right, but I still love to have my Portfolio packed with free stocks, and I see that every now and then stocks, which did not grow for years, start going up and overtake the famous 30% mark, that allows me to turn them in to free stock. Palm and Red Hat (RHAT) are good examples of a companies which did so, stuck for years suddenly went up 30%higher than the original price at which I bought them.
With this strategy if you invest $1000 in a stock, wait untill it goes up 30% then resell 1000$ worth of it, you and up with the same money you had at start in your bank account and free $300 worth of the stock you bought, corresponding in number of shares which are 23% of the shares you bought originally.
This strategy is linked to the “Sell, earn and cry!” strategy, but it makes you cry much less if the stock you have sold continues to go up!
Leave a comment