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Wednesday, October 26, 2016

Oh no! My glorious Davis + Henderson Corporation (DH) lost 43.38% today

My non-registered portfolio close today at $147 075. I lost $3 112 just like that... This illustrate what its really like to invest in stocks. And sad news, my net worth is no longer of 180k. Its something I was expecting. I know the drill. The trick is to never lose calm when big loses happen. The reason why I lost 3k stand mostly behind Davis + Henderson Corporation (DH). DH lost 43.38%, -$12.45 per share. But technically, I didn't lose money, at least money from my very own.

I bought my DH stocks a very long time ago a $14.67. And now, DH is trading at $16.25. Now, the question being, should I sell what I hold of DH, or partly sell? I don't have a clear answer to that question at this time. For TD, DH is a HOLD. But for me, I don't know for sure, but I am more tempt to sell. I don't like volatile stock. Next thing we know, DH may cut their dividend and if they do, it will hurt the stock value very badly. So I am scare of that.

I was just doing too well, something had to happen. Its sooo disgusting!!! Anyhow, its all out of my control isn't. The only choice I can make is to sell or hold. One positive point, if I sell DH, which is probably going to happen, the money will go to pay down my margin - which really need it. I am currently using $82 339.67 of margin cash. And in result of today DH crash, I have left available $11 747.14. Usually, I am around 15k. I kind of know what I need to know.

Can it get any darker for DH? 

I have no chance to take.


Anonymous said...

I was really hoping yesterday that you would have sold DH before earnings. I sold mine three weeks ago. It was continually going down. It had problems with short sellers, and was missing earnings. Not sure where this one is going, but I followed my gut and got out.

frederic said...

DH has an average rating of hold, but that's probably going to change soon.

DH looks like it was downgraded by CIBC to a price target of 28$, from 40$, same as royal bank did back in june. This stock is going to recover a bit, but I think it's going to stink for a long time. It's probably going to spike up again slightly and then drift down slowly over a long time, especially on the TSX, where volume is low and it's earning seasons (so people will put their money elsewhere). It's a good time to sell if you have better things to do with your money. Unless you know the company well and have faith in it.

jim cramer always says, unrealized gains is not profit. In the dotcom bubble, people had unrealized gains in the milions but never cashed in, and ended up losing them.

So I lock in my gain often, based on his simple rule: why did I buy this stock, and did that change? For example, for a stock that would have bought for dividends, I would not necessarily be bothered by stock price fluctuations if the revenue isn't dropping. But I would study before buying on such a big dip.

Anonymous said...

The time to sell is when they are high; unfortunately it doesn't look like DH have much growth prospect and they have lots of debts. If I were you, I would sell some of your winners like PBH, pay your line of credit and wait for a market correction to purchase using your margin. You don't have to sell 100% of the stock, maybe just 50% so if the stock keeps going up, you still holds some shares and if it goes down like DH, you have money to buy some cheap shares and don't get years of profit wiped out in one day.

frederic said...

It's a good point about selling some of the winners to repay the line of credit. I wish I had made it.

Trading on margins should be used for jumping briefly on a flash dip, and especially for loading up during a market corrections. People commonly make the mistake of buying on margin to add to winning positions when the market is up, and doing nothing when it's down. And that's been proven to lead to magnify the losses.

Even on the lower interest rates of my TD president's account, I'm never on credit more than a couple of weeks. The interest cost would totally nullify the performance I'm trying to achieve by doing my own stock picking.


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