# What do you do with that dog stock?



## silence (9 November 2007)

So I bought into a stock that in hindsight I probably shouldn't have, a long time ago.

Not really knowing what I was doing, it went down, and I assured myself that I was an 'investor' so I would just hold (sound familiar?). It's been sitting at the low price virtually unchanged for a very long time.

It has good announcements occasionally, like they have made an agreement to sell their product through a large company, but it seems like they just keep re-releasing the same facts every few weeks and trying to spin it into 'new' information. The market sees the info, it might go up 3%, but the next day it will be back at the old price.

So this small biotech isn't dead, and one day it might be something bigger.......  but how long does one wait? What would you do if you had a dog like this in your portfolio?

Looking at my position summary today I saw it, and thought I may as well just sell it and forget about it, and consider that loss my lesson/reminder of what not to do ever again.

Then I thought, since it's not going anywhere, I may as well just hold onto it and maybe one day I'll check on its price and it will be moving upwards.

What's your 'dog' strategy?

I've withheld the name of it to make this a generic thread about how to deal with bad decisions, but I don't mind saying what it is if anyone actually cares.


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## nioka (9 November 2007)

Check the fundamentals. Check the announcements. Decide if it is good value at the price it is today. Forget what you paid for it. The answer will come to you very quickly. If it is still a dog then bark at it.


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## prawn_86 (9 November 2007)

It depends on your specific strategy for that stock.

Did you intend to hold it long term? If not why wasnt a stop in place?

Now you must decide wether you are comfortable with your money sitting there or if there are better opportunities? Classic opportunity cost scenario.

Personally if i buy i stock i have a time frame on it when i purchase and will not sell at a loss until that time frame is reached. I will however sell at a profit if it reaches my target before the timeframe.

Short term i tend to have stops. But still have target prices and timeframes, just a lot shorter.


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## nizar (9 November 2007)

Dump it.

Holding it is a waste of time and money and OPPORTUNITY.

Only my opinion........


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## noirua (9 November 2007)

Hi silence, If you give us the name of the stock we might all start advising you, which may be contrary to ASF rules.

Many people who went through the dotcom boom, still have stocks that are dogs. I have one that was once $1.80 and is now worth a very small fraction of that. At least it's still alive as very many went under.

Forget about what you paid for the stock and ask yourself if you would buy it now at the present price? (nioka posted the same, maybe great minds think alike) I'm quite content holding my stock and added a few more - is yours worth considering doing the same?  (Obviously you need to do your own research)

Good Luck


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## nioka (9 November 2007)

Rereading your post I find that a stock I held for a long time fits the bill. OIL. My thoughts on that one were to sell it, put it on a watch list called "buy back" and when there is some good news I will buy it back because I believe it has a future. In the meantime I am using the funds in another spec investment. Do I ring a bell?


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## nizar (9 November 2007)

noirua said:


> *Many people* who went through the dotcom boom, still have stocks that are dogs.




(Obviously Im not talking about you specifically noirua, im sure you do well)

BUT this is exactly why many people (probably the same many people) lose money in the stockmarket.

Because they take their winners too quickly to lock them in, which means they never have any huge winners.

But perhaps more importantly, they don't know when to take a loss, so they end up having huge losses. They think, its only paper, you don't want to lock in a loss! Better to wait for it to recover before selling  

To succeed in the markets you have to know exactly what are you doing, including.

*What to buy.
*When to buy.
*How many to buy.
*When to sell at a loss.
*When to sell to take a profit.

And try to find a method that allows to you keep your losses small and MILK those winners for as much as you can.


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## noirua (9 November 2007)

Spot on nizar. Some of us need a stick of dynamite to make us sell. A paper loss is a real loss, as you say.


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## rub92me (9 November 2007)

You mentioned it was a small Biotech company. In my experience these are probably the least predictable. Sometimes they can be in the dog house for ages and then make a large move up in a few days based on a patent announcement or a successful trial. I've played with these in the past, but look very carefully at their cash position and cash burn rate. If they've been diluting share value over the years by raising capital at ever reducing share price, with no hope of being cashflow positive in the next 2 years, then I stay away or would sell out.


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## Sean K (9 November 2007)

If it's truly a dog then take the capital loss, and enjoy. 

However, if it's just underperformed, and might be in a particular sector that is out of favour, or might be a turn around/value/contrarian investment, then it might be something to back up the truck on. 

Largely depends on if you a technical or funny investor, which relates to the above.


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## son of baglimit (9 November 2007)

kennas - surely thats the only answer - sell it and use the CGT loss to your favour, either this year or in the future.

make sure if its in the future you keep carrying it forward.


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## krisbarry (9 November 2007)

I am assuming its BLG


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## SevenFX (9 November 2007)

Nizar has some good points in his *second* post and tend to follow those principals generally.

Though early experience is sometimes for some people the best teacher, and you having experienced this will make you a better investor in some ways on your future trades (right)..

Given it's some time now (perhaps months, year(s) maybe) and it hasn't recovered in this (mining) bull run, it maybe months/years b4 it does..  if/when the bio's have their time again or the company has huge find.

Also worth considering small can become smaller should a correction occur.???

Having said all that... If it wasn't/isn't a large percentage of your portfolio and it hasn't a signigiciant $value, well mistake made, hence I'ld hold it in the "hope draw".

To counter counter my above points :, holding it could reinforce bad behaviours, and the letting go of losses may never occur, or only occur on a bigger loss than this bio...?????

SevenFX


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## nizar (9 November 2007)

kennas said:


> If it's truly a dog then take the capital loss, and enjoy.
> 
> However, if it's just underperformed, and might be in a particular sector that is out of favour, or might be a turn around/value/contrarian investment, *then it might be something to back up the truck on.*




Hahahahaha at the "back up the truck" comment.
Thats gold, especially coming from a Moderator lol 

Well I think timely sector rotation can be very profitable.
Those that got out of uranium in April/May and moved into oil and gas would know what I mean.

An underperforming sector is not a reason to hold a dog in my opinion.


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## nizar (9 November 2007)

SevenFX said:


> Though early experience is sometimes for some people the best teacher,




It is indeed accurate that you say for *some* people.

A mate of mine was never interested in what I used to do ie. discretionary trading. This guy is a property champion who is very business minded.

But when I told him about mechanical trading he got right into it.

He'll probably never have the problem of holding dogs or having no stop, etc, and he will mostly likely start off a champion.
Which is alot better than I could say for myself.

So yeh you don't have to start off the hard way, and I agree with you here.

Oh, and a small share doesnt need a correction to become smaller, trust me on this one


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## JellySausage (9 November 2007)

This could be a fun game.

I guess it's VCR.


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## nioka (9 November 2007)

Stop_the_clock said:


> I am assuming its BLG




I've got that one too. Still holding and still waiting for some good news. I have classified it as "slow" but not yet a dog.


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## nioka (9 November 2007)

JellySausage said:


> This could be a fun game.
> 
> I guess it's VCR.




Now that one was a dog which I sent to the pound some time ago .


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## Aussie2Aussie (9 November 2007)

nioka said:


> Now that one was a dog which I sent to the pound some time ago .




My bet - NAL.

A dog that will never bark!


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## Wysiwyg (9 November 2007)

What is the definition of dog stock?

I thought it was a stock which share price decreases/languishes continually after buy in.


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## SevenFX (9 November 2007)

Think the Original poster was interested to hear views on stagerties of stocks that shouldn't have been held...not so much guessing which one it was.

Better we stick to this than filling up thread with dog stock guesses, as the list may never end.

SevenFX


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## ROE (9 November 2007)

Does it pay decent dividends? Can you buy better stocks with the money you sell from this stock? The answers is no keep it ..else let it go..


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## SevenFX (9 November 2007)

ROE said:


> Does it pay decent dividends? Can you buy better stocks with the money you sell from this stock? The answers is no keep it ..else let it go..




Good point ROE, as dividends can be attrative, but say they usually linked to company performance, and guessing SP is reflective of company performance.

SevenFX


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## Trader Paul (9 November 2007)

silence said:


> So I bought into a stock that in hindsight I probably shouldn't have, a long time ago.
> 
> I've withheld the name of it to make this a generic thread about how to deal with bad decisions, but I don't mind saying what it is if anyone actually cares.






Hi Silence,

..... if you post the name of the stock, we may be able to see how far
ahead, a likely change in market sentiment may take place, using time cycles  ... 

have a great weekend

   paul



=====


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## Go Nuke (9 November 2007)

I tend to have found (well my belief anyway) that with Biostocks they seem to rid up based on announcements.

For example, i hold CUV which *was*great when they were making ann about phase 2 and 3 trials  BUT now we have to wait for 1 to 2 years for some clinical results on their major projects..hence the reason i believe that the sp has declined so much.

Ive decided to hold but your topic caught my attention because the same thought has been going through my head "Hold or Sell...Im missing oppertunities"
Seen as it is only a small% of my portfolio Ive decided to rename it as a "_Longer term Investment"_

As for a previous biostock i bought at .42c....(CYC), well as soon as that share price managed to get back *up *to .42c...I kicked that dog in the nuts and sent it home" Goodbye!:axt:

Goodluck with your decision
GN


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## rapture2002ca (9 November 2007)

Hi guys,

I'm a newbie and I'm also in the same situation. Actually I bought two stocks a while ago and kept them far too long. One was for uranium and the other is gold.

Now I'm suffering the consequences of my inexperience I guess. I recently bit the bullet with the uranium stock and offloaded it and have almost made back the 6k I lost on it.

On the other hand I still have the non-firing gold stock which is still biting me on the heel the little mut. Hopefully I will learn from these costly experiences in the future.

Cheers

Shane


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## SevenFX (9 November 2007)

rapture2002ca said:


> I recently bit the bullet with the uranium stock and offloaded it and have almost made back the 6k I lost on it.





Welcome Shane. and well done for letting the U stock Go.

They key is to cut your Losses Early, & let your Profits Run.

Holding onto the loss, can only limit that capital from making profit.

And once you accept, holding sizable losses is ok, your exposure to loss could increase on a bigger trade 

Cheers
SevenFX


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## ithatheekret (9 November 2007)

Unless you have grand ideas about taking over the company  , stop the emotional stuff and concentrate on what your doing and why your there .

He who hesitates loses !


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## prawn_86 (9 November 2007)

rapture2002ca said:


> On the other hand I still have the non-firing gold stock which is still biting me on the heel the little mut. Hopefully I will learn from these costly experiences in the future.




Welcome to ASF Shane 

Please dont take this as investment advice, because its not. 

But with the gold stock you are holding, providing it is a producer or close to production, or even an explorer with good results, one would assume it has more chances of going up than down. All other things being equal. 

POG is very high and gold stocks are in favour at the moment.


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## rapture2002ca (9 November 2007)

prawn_86 said:


> Welcome to ASF Shane
> 
> Please dont take this as investment advice, because its not.
> 
> ...




Hi Prawn86,

The gold stock is still an explorer and has been coming dowm for the last 2 years from it's high of around 30c. I bought in at 6.7c and am now losing half. 

I've been saying to myself it's going to rebound because of gold being at almost an altime high but it hasn't shown any promise in the last 6 months. I might have to bite the bullet on this one but I know when I do it will probably go up then haha.

Cheers


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## rapture2002ca (9 November 2007)

SevenFX said:


> Welcome Shane. and well done for letting the U stock Go.
> 
> They key is to cut your Losses Early, & let your Profits Run.
> 
> ...




Hey SevenFX,

I now realise that holding on to a dog will only cause me pain in the future where I miss out on opportunities to make it back. Hopefully in the next month or so I can reclaw what I've lost.

Cheers


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## So_Cynical (9 November 2007)

rapture2002ca said:


> Hi guys,
> On the other hand I still have the non-firing *gold* stock which is still biting me on the heel the little mut.



Is there such a thing....perhaps u mean a non-firing prospector?

EDIT: lol posted before i got to the end of the thread.


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## chewy (9 November 2007)

Sell the dog and put what you get in to topping up on your best performing stock?

I recently did this with cfe and put it on to cvn - already made back more than the loss a few weeks later whilst cfe has continued to fall. 

But a biotech would be different to most stocks. having to wait years for stage 2 and 3 results to prove it. I would of thought it would be more a case of hold for long term if you believe it works and is widely marketable (I hold MSB for this reason). Assuming as you said the SP has only been flat - if it was dropping significantly I'd worry. 

But I am new to investing so could be completely wrong! lol


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## wildkactus (10 November 2007)

It's always best to cut losses early, and look for the next trade.
but look back over the trade to see where your research let you down.
I have found that I have learn't more looking back over these bad trade then I have the good one's

remember your in this game to make money, (unless youre a charity.)

so take the loss and move on.

all the best in your trading.


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## nioka (10 November 2007)

wildkactus said:


> It's always best to cut losses early, and look for the next trade.
> but look back over the trade to see where your research let you down.
> I have found that I have learn't more looking back over these bad trade then I have the good one's
> 
> ...




 You are speaking from a trading point of view. The action may be quite different from an investing point of view. A trade and an investment can be quite different.


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## thedave (10 November 2007)

I think you need to have your get-out point in advance and stick to it.  Hanging on to stocks that have fallen or not run is just the effect of ego on your thinking:  that is, we hang on to dog stocks because we cant believe we were wrong and "surely they'll come back one day".  They probably will, may take years, and in the interim your chance to reinvest and recover has gone a hundred times.  I think of it like this:  a 33% fall means you need a 50% rise to recover.

This is coming from a man who held Plenty River Mining from the day of the stock market crash in Oct 87 (yes, I was the one buying that day), until selling them 14 years later and taking the loss.  Never again.

So when do you bail?  Well, depends on the type of stock you hold.  Blue chips falling 10% is scary, but penny hopefuls will do that all the time and then run.
Do some charts, look at the pattern, is this just going one way?  Out.

Welcome from another newbie on ASF.


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## shinobi346 (13 November 2007)

ABJ? $1 to 3.7cents :eek!:


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## brendan87 (13 November 2007)

I guess OIL.


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## Rainmaker2000 (13 November 2007)

Some good content in these posts guys!.......selling stocks is probably the hardest thing......anyone can buy one but when to sell a 'dog' or an outperformer, that's the question...............

All I can say is it more depends on how close you are to 'the story' rather than its stock price....Since its biotech, I'm guessing its 'outside your sphere of knowledge' so you should consider whether you want to play in this patch at all......the sell decision sound like its difficult just because you have little idea what's driving the company and its stock price.......Who would, its biotech, even the scientists involved may not know but you can be sure they are buying and selling.

If you get intimate with the company's story, then you'll know what to do....From all I've read, the stock price of bio techs over the short term  bear little relation to the underlying business...but what would I know I don't touch what I don't understand


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## shinobi346 (16 November 2007)

I Thought I'd post how I handle dog stocks - dog stocks being ones that I think have gone past the point of no return and won't be going up again to the level I bought them for.

Well I sell them asap I identify them and I put that money into a high risk stock that I have greater confidence in.

If it goes up and I make back what I lost on the dog stock - beauty!

If it far exceeds what I lost, then I go out for dinner.

if it dwindles even further, tough. I write it off on tax and I think to myself the money in the initial investment wasnt meant to stay with me anyway.


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## tieyouup (21 November 2007)

Here is a little story of 6 Dog Stock i bought in '97. At 5c each i bought $5000 worth in each company the 6th stock was $1.40 (i think, cant remmember). Then i just lost track of them and forgot for a few years. 

In 2001 it was time to buy a house so looked them up after a huge runaround after 4 change of addresses and some of the companies changed names a few times. (word of note make sure you inform the registry of change of address).

The 6th stock was now $5.11 here was a deposit on the house. Now i'm lookin to pay the house of outright. Low and behold a mining company is getting bought out in a nasty bidding war, (the phone calls are very annoying to sell). So here is the house payed of soon and renovations done. 

My moral is, if you can handle the long term without that money, leave it where it is. I see stock as a huge horse race, but you dont have to be first to win. Expect to win but realise a loss as potential.

Needless to say the other 4 stock in this portfolio r still dogs (.025c average) but i have hope, and now i watch them carefully. And will sell when need be.


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## SevenFX (21 November 2007)

tieyouup said:


> The 6th stock was now $5.11 here was a deposit on the house.
> 
> I see stock as a huge horse race, but you dont have to be first to win. *Expect to win *but realise a loss as potential.
> 
> Needless to say the other 4 stock in this portfolio r still dogs (.025c average) but i have hope, and now i watch them carefully. And will sell when need be.




Man One *Lucky* Story.

Though if I were you then, not sure if I'd do the same, even knowing your story.... 

I'd still say CUT your losses EARLY (asap) and not put yourself in the situtation of loosing 95% of your capital, and rather loose 5% and be sure the other 95% is working for me elsewhere.

Also if I read correctly each stock cost you 5k and 5 are still dogs....which works out to $25,000 back in 97...which make me wonder what that money could have done in the last 10 years...????

These could have all easily been delisted, or worth less than 5c... on the downside...

What portion of your potfolio were these...????

How have you done since 97, and have you had to add any more race horses to your stable...???? LOL

SevenFX


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## Pager (21 November 2007)

Im a long term investor rather than trader, if one of my stocks take a hit and gets a dog tag, i usually give then to the end of june to turn around or i sell then and take the Capitol loss, if i still like the stock sometimes re enter in early July at a lower or similar price to what i got rid of it for, did this with CST in July this year, although it still more or less unchanged, but still over a $1 lower than my original stake.

this year only dog im holding was as of today and thats FUN, so it has until June 30 next year.


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## tieyouup (21 November 2007)

Man One Lucky Story.

Though if I were you then, not sure if I'd do the same, even knowing your story.... 

I'd still say CUT your losses EARLY (asap) and not put yourself in the situtation of loosing 95% of your capital, and rather loose 5% and be sure the other 95% is working for me elsewhere.

Also if I read correctly each stock cost you 5k and 5 are still dogs....which works out to $25,000 back in 97...which make me wonder what that money could have done in the last 10 years...????

These could have all easily been delisted, or worth less than 5c... on the downside...

What portion of your potfolio were these...????

How have you done since 97, and have you had to add any more race horses to your stable...???? LOL



Ok while money makes the world go 'round, to some, it doesnt mean much to me. (purely a means to MY end and my kids future). And NO you cant have it.lol. 

In my perception im way ahead of the game. Money out-layed 30K (inheritance) at start '97. 6th (fosters) stock sold 20k ish. house deposit in '01 ...current holding with dogs 50k ish (inc. consolidated minls which did a buy back long ago so 70c a share, current price $4.90 ) well lets see what happens there. So to me im way front.

All up thats a 110%ish profit in 10 years

Admendment to last post stock 4 bought at 30c VLA (biotech) not 5c.... current .10c with stage 2-3 commpleted of trials looking for good results soon. I may buy more at this price 2 weeks ago they were .05c.

Since '97 i decided (this year) to be more tax effective and join a managed fund and a macquarie fund, with a structured tax solution fund. Bought into a few months ago right at the big drop. Which inculdes warrents an stuff i have no idea about. But the returns so far are impressive, and the tax return.


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## SevenFX (21 November 2007)

Good on you Tieyouup.

Sounds like your winning & ITM generally. hope it works for you.

SevenFX


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## 3MT (27 November 2007)

Hi folks, it looks like different strategies work for different people here and depends on how much you have to invest and how long you can afford to stay invested on those "dog stocks."

Usually for me, a stock becomes a dog when it appears more likely than less that management is able to turn the company around (ie. continued profit downgrades, no internal stock purchases, controversial accounting, no contract wins).

Then I look to see if I can put what less money I have elsewhere for better returns and then remove the stock from my watchlist and just move on completely. (closure of that sort helps me to better focus on other opportunities instead of lamenting on loss opportunities)


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