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24-10-2013, 09:14 AM
Quote 1
"That said, price-alone stop losses are not the value investor's cup of tea, because again, value investors pride themselves in paying 50cents for a dollar worth of goods. But i would still continue to implore all to look back in the recent past (eg.2008) and ask, how do i successfully integrate a stop-loss mechanism that fits my temperament/style to reduce the damage done, especially for those who are always 100% vested in the market."
Quote 2
"I totally agree. Margin of safety helps to manage market and firm specific risks. A stop loss helps mitigate the effects of operational risks such as estimation errors or misunderstanding the company's operations. The biggest risk IMO, is being wrong and not knowing it."
Unquote:-
Well put;
If you think "STOP LOSS" is a risk management tool to use as not to be caught with your pants down in case the Market suddenly visited by a BLACK SWAN. It's a good tool because nobody can know when the BLACK SWAN will pay you a visit.
i think Stop Loss can be used appropriately at the time you want to sell your stock too.
But i am very greedy here or over confident about the market. i use "Limit Order instead of Stop Loss". If i use Stop Loss, it's a mental "Stop Loss lah.
"That said, price-alone stop losses are not the value investor's cup of tea, because again, value investors pride themselves in paying 50cents for a dollar worth of goods. But i would still continue to implore all to look back in the recent past (eg.2008) and ask, how do i successfully integrate a stop-loss mechanism that fits my temperament/style to reduce the damage done, especially for those who are always 100% vested in the market."
Quote 2
"I totally agree. Margin of safety helps to manage market and firm specific risks. A stop loss helps mitigate the effects of operational risks such as estimation errors or misunderstanding the company's operations. The biggest risk IMO, is being wrong and not knowing it."
Unquote:-
Well put;
If you think "STOP LOSS" is a risk management tool to use as not to be caught with your pants down in case the Market suddenly visited by a BLACK SWAN. It's a good tool because nobody can know when the BLACK SWAN will pay you a visit.
i think Stop Loss can be used appropriately at the time you want to sell your stock too.
But i am very greedy here or over confident about the market. i use "Limit Order instead of Stop Loss". If i use Stop Loss, it's a mental "Stop Loss lah.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.