Letting profits run

[burglar]

My question, ...
With regard to this trade, where would robusta be, if he let his profits run?

Lifted this from MND thread, 8th Feb 2011:

The time is here for me. Sold out of MND today at $20.06, love the company but my view is the sp has run too far past IV. Bought in Jan 2010 @ ~ 12.50 and again in May @ ~ $13.00 wanted to hold long term but could not go past market offer of $20.00 +

From "Your top 3 holdings and why you hold them":

... Might, however, be interesting to have a thread on letting profits run versus price reaching IV.

Here is the chart:

 

[cynic]

I'm always worried that if I let my profits run for too long they'll run into trouble!

 

[So_Cynical]

I let my profits run after i have taken a profit thus having some exposure to the positives and negatives that will come...while locking in profit and de-risking.

Learnt the hard way, bought ILU in the GFC for 3.30 (Genius) did the ^ above, and then sold out completely at 12.25 sixteen months later, only to see the SP continue on to $18

https://www.aussiestockforums.com/forums/showthread.php?t=6067&page=4&p=621825&viewfull=1#post621825

 

[burglar]

... where would robusta be, if he let his profits run?

With an 8% trailing stop-loss, I'm guessing $20.24 one month later in March 2011






This is going to get me in trouble, isn't it?

 

[robusta]

This is a interesting discussion, my well documented disaster with MCE would seem to argue against letting profits run however here is a example of MCE purchased on 8/8/2011

In the last twelve months MTU has paid me $264.67 in dividends plus $113.43 in franking credits.

So to sum up $3680.73 invested minus $2827.31 taken back out through profit taken minus $465.37 in dividends received means I have recouped all but $388.05 of my original investment.

We could work out percentage returns but those would mean little in this situation.

For what it is worth if we take today's closing price of $6.45 the market thinks my remaining holding is worth $5979.15, the dividend should increase this year as well.

Happy days

Investment Reduced

Sold 300 x MTU $6.25 = $1855.05

I still really like this business, the reoccurring revenues and growth are a thing of beauty but this is the second time profits have been taken from this business. The reason MTU has been picked on twice is I think it is the holding most overvalued with the least competitive advantage in the portfolio.

I have taken profits on this business but on my terms. Another business I hold is NVT since 02/02/12 it could be interesting to look at a chart of those two shares over those two periods to see how wide the stop loss would have to be to incur a better result.

 

[robusta]

To be fair I should ad COH held since 30/11/11 a trailing stop would have given a better result so far.....

 

[robusta]

View attachment 54611

compound annual return since listing now 22%+ (excludes franking benefits)

And that's over a period that covers the GFC.

Not a bad effort for some lazy working $$$$$

No need to be called off side by market price action – a pretty simple hold based on business performance metrics.

Effective interest free loan from the government in the form of deferred tax liability working a treat for the long term holder – not to mention the CGT discount amount that is ignored as a permanent difference.


Ps
Happy Hawthorn Day for yesterday

I have constantly admired craft's input on this forum and now I find out he is a Hawks supporter as well!!!

 

[Julia]

robusta, I'm confused as to whether you're still holding MCE - I'd thought you were - but the above suggests not?

 

[Ves]

robusta, I'm confused as to whether you're still holding MCE - I'd thought you were - but the above suggests not?

Didn't he sell it almost two years ago?

 

[galumay]

I am confused as to whether Robusta is talking about MCE or MTU??