Fools decide whether stop losses are compatible with a value strategy.
Whether to use stop-losses is an age-old debate amongst investors, with some swearing by them and others thinking they're worse than useless. But one thing that most people will probably agree on is that their usefulness depends on your overall strategy. This week, qwertyjj kicked off a discussion of whether stop losses have any place in value investing...
"...it seems to me that most people are willing to take a loss of up to 30% or more as in the recent crash but that their targets are not in the same range, ie people will hold on for their exit point no matter what the loss. I may have misunderstood some of the posts but this seems a little risky. […] So, shouldn't we consider putting in stop losses for all of our HYP and value trades?"
Gengulphus offers us his take...
"Basically, it doesn't make a lot of sense for an investment strategy to judge its exits on a completely different type of criterion to its entries. If it does, sooner or later it's going to find itself simultaneously being told to buy a share and to sell it! [...]
They don't go well with a fundamental analysis type of entry criterion, such as P/TBV being well below 1. If you get stopped out and look again at the share, the odds are that you'll find its P/TBV is still saying "Buy me!""
Read on, for a very educational discussion.
Are you a gadget freak?
As Satsuma pointed out on our 'Living Below Your Means' board, many people these days have "their houses [...] packed full of shiny newness, from the furniture to the kitchens to the cars", and she doesn't get it...
"I am not particularly interested in gadgets. I am not an "early adopter" of technology. I don't have an ipod (or in fact an i-anything, gasp!), nor a Wii or other games machine, and my mobile is an old ex-work handset from about 4 years ago, which is now on PAYG and on the same £10 credit as when I got it..."
Are you the kind of person who has to have the latest in electrickery and the shiniest new toys? Or do you, like people of previous generations, only replace your stuff when it wears out or breaks? The thread is a long one with lots of opinions -- please feel free to add your own thoughts.
The day dawns...
If you're stuck with big debts that you really can't manage, bankruptcy is an option that can often provide the best way out, even though some find the prospect of insolvency hard to face. But the day does come when you're free, as jellytots123 discovered this week...
"Just looked on the insolvency register and hubby was discharged on Monday !! […] That whole mess is behind hubby now and it is such a relief."
Our congrats and best wishes go out to both of them.
Investors' Rountable
Those new to our Discussion Boards might not realise that we have so many, because they are all grouped into different categories. With a couple of exceptions, we group them by general topic, to try to make it easier for people to browse and pick up on related boards of similar interest.
As an as an example, our Investors' Roundtable category covers a number of boards directly related to investing topics, covering different strategies (investing for Income or Growth, looking for Value Shares or Tech Stocks, etc), alternative investment classes (like Gold, or Bonds), investing around the world -- and there's even an Absolute Beginners board to get you started.
So do dip in and have a browse -- you might find just what you're looking for.
And finally...
Long-term boards regular JayHoe celebrated his 10th anniversary as a registered Fool this week, and wondered whether there are many sites that maintain a community for so long...
"Today is the tenth anniversary of my joining the Fool. It seems quite astounding tbh but there ya go!"
The long-term success of our Community is due to people like JayHoe and the other members of the Fool Roll of Honour (which he'll be on next time we update it), together with all the newcomers regularly adding to our numbers. I wonder who the first Fool to reach 20 years will be?
PS.
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Last week's roundup: The Age Old Problem Of Public Spending
