Taking My Measly 17% Gain

One of the Asian gaming stocks I bought at the end of March was up 30% two days ago. Yesterday, however, a sell-off occurred and almost half of that paper profit vanished.

I watched the stock intermittently through the day as I was working. Near the end of the trading session, I had a decision to make: should I sell it? (to lock in the 17% gain that remained) or hold on to it? (hoping for a recovery in the future) It was an especially tough call to make because the trading volume was essentially equal to the previous day's volume. If the volume had been lower, that would have indicated more clearly to stay in the stock. If it had been higher, indicating a "distribution" day, that would have indicated more clearly to get out.

4:00 PM drew ever closer. The volume was neck-and-neck - how to make the call? Well, I had recently listened to a podcast interview by Bill O'Neil on investors.com. He had made a casual comment about having good sell rules that stuck with me. He said, "Stocks are kind of like people, when they act strange there's usually something wrong at a deeper level." Dropping 13% in a day, even on equivalent volume to the previous day, qualifies as acting "strange" in my book.

At 3:56 PM, I sold my shares and confirmed that the order had gone through. 17% locked in. I slept well last night.

As these things sometimes go, the stock rallied this morning. It is up to what would be a 24% gain if I hadn't sold it. Due to the rules of trading in this account, I can't just buy back the shares I sold - three business days have to pass for my sell order from yesterday to clear the system. Did I get "shaken out"? Was I hornswaggled and bamboozled by superior market operators who manipulated me into doing what I shouldn't have done?

Nah. I'm just a lucky mug who got to enjoy what would be the ride of a lifetime for most people - a 17% stock market gain in two weeks' time. Can you see me grinning like the Cheshire Cat? That's my sad face for the profits I "lost".