Posted by Tim Stobbs on February 8, 2007
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.