Don't throw the baby out with the bathwater

A post reproduced from the Advfn Trakm8 thread:-

r1singson - "But I'm just wondering why you being in such an enviable position (x10 even after this week) would still be a holder having made such bumper profits. Is it that you are reluctant to sell having been probably closer to x20 up? Or that you are very confident there is more to come rather than search for the next multibagger? As I say a very enviable/fortunate position, just a question."

Thanks for reading the blog. Just to emphasise though that it's just my ramblings and not a tip sheet.

As regards Trakm8 (I'm still up far more than 10 times BTW even at today's low point), yes I am convinced that there is far more to come.

I don't share my buys and sells on my blog as frequently as I have in the past, chiefly because the pot has grown to such a level that I can take considerably more time to acquire a position in a potential multi-bagger. If you consider recent market turmoil then I'm sure that you can sympathise with my stance. Trakm8 is an excellent example of investors throwing the baby out with the bath water. Irrational selling by the herd creates opportunities for the patient. If you do what everybody else does then you'll get what everybody else gets i.e. moderate returns or worse still, losses.

FYI - I have and am currently building a position in a micro-cap and it will become my largest conviction buy ever.

To answer your original question in a roundabout way, I have found an investing style that works for me. Imo many investors are far too short term in their thinking. In my early investing days I took profits far too early e.g. AHT (see blog), CKN, etc. At the time, I was as pleased as punch with double digit profits, but in time many went on to multi-bag. AHT would have been a 75 bagger.

My general rule is that unless the story changes then do nothing. Sometimes a share price may get ahead of itself, but sit tight and except that nothing goes up in a straight line. Ignore all noise, especially clowns on bulletin boards and third-rate tipsters.

In my experience at least one or two of my micro-caps will go on and more than 10 bag. Often more. If I pick ten shares and one ten bags and nine go bust then I break even. Of course it might 15 bag, 20 bag, 100 bag etc. I consider the first instance (break even) my worst case scenario. I started investing seriously around 15 years ago. In all that time only one company has ever gone bust on me, and in retrospect that was a highly speculative punt. I've been lucky enough to pick several multi-baggers.

I hope that goes some way to answering your question. All the best with your investing.