It's when you sell that counts

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Caractéristiques

Auteur : Donald L. Cassidy
Publication : 1997 (Première en 1991)
Editeur : McGraw-Hill
ISBN : 0-7863-1129-0
Nombre de pages : 288
Prix : 27,65 euros


Jaquette

Your stock market success depends at least as much on when you sell a stock as on when you purchase it. Still, while dozens of books tell you how and when to buy "super" stocks, no books reveal the critical information that tell you how to decide exactly when you should sell, and how to fight through row after row of self-imposed obstacles when it is time to secure your actual profit !

No books tell you how to sell, that is, except It's When You Sell That Counts, by Donald L. Cassidy. Cassidy's groundbreaking book, first published in 1991, has shown thousands of savy investors how to determine just the right moment to sell, and how to time your transaction for maximum profit ! Through illuminating and up-to-date anecdotes and actual case histories, it reveals :

  • Personal hang-ups that hamper many investors until they identify and deal with them
  • Important strategies that should be applied to every selling decision
  • How to acknoledge that everyone makes mistakes, minimize your losses, and move on
  • J. Paul Getty's contrarian approach : developing the discipline to sell when everyone else is buying
  • How to correctly use above-market instead of stop-loss orders
  • 20 questions to focus the hold versus sell decision

Every expert wants to tell you how to buy stocks today. When it comes time to sell, make certain to listen to the one proven expert who has mastered the art of selling for a profit. Donald L. Cassidy's It's When You Sell That Counts, Revised Edition provides practical, entertaining advice on how to sell successfully in today's volatile market.

ABOUT THE AUTHOR
DONALD L. CASSIDY is a senior analyst with Lipper Analytical Services, Inc., conducting research on closed-end investment funds. He conducts frequent seminars accross the country, can be heard as a guest on radio talk shows and has been quoted in The Wall Street Journal, Barron's, Worth, Kiplinger's Personal Finance, The New York Times, and Smart Money.


4ème de couverture

You buy stocks for potential, but you sell stocks for profit !

"Clients constantly ask me about sell discipline, the neglected part of every trade. Cassidy's new material on playing off institutions' herd behavior makes this revised edition even more essential."
     Ned Sundermann, President, Sundermann Capital Management

"Deciding to buy a particular stock is easy. Selling a stock is a discipline that appears to have eluded the retail investor while being successfully implemented by the professionals. This book will aid the retail investor in becoming such a professional."
     Marilyn Cohen, President, Envision Capital

"With so much written on the subject of how to buy a stock, it's refreshing to finally find a comprehensive study of the equally important sell decision. This book should be required reading for all investors."
     Patricia A. Bannan, Portfolio Manager, Prudential Mutual Funds

"Just as Peter Lynch stripped away the mystique of buying stocks with his common sense approach to investing, Don Cassidy provides a valuable road map to successfully complete the investment process by answering the question, "When do I sell ?"
     R. Jerry Falkner, CFA, President, R.J. Falkner & Company

Investors rarely get excited with the decision to sell a stock, yet it is precisely in the sell that the money is made. It's When You Sell That Counts, Revised Edition discusses profitable, proven methods for defining your stock market goals, and for selling when those goals have been reached.

This one-of-a-kind guide helps you identify and isolate your resistance to selling stocks, then overcome that resistance in order to sell when it counts. Author Donald L. Cassidy has revised and updated his book, a best-seller since its introduction in 1991, to address the problems and opportunities in today's new market environment. New information in It's When You Sell That Counts includes :

  • Why Holdings Feels Right -- Explores new findings on inner drives and fears that keep an investor from selling at the right time
  • Adopting Survival Tactics for the Institutional Jungle -- Documents the developing need for being impatient, due to short time horizons of market-moving institutions
  • The Ultimate Winner's Test -- This perception-changing chapter reveals the single question that every investor should ask, to answer the hold/sell question

Introduction

Several years ago, as an equities analyst for a regional brokerage firm, your author was in conversation with an experienced broker to discuss the recommended sale of a certain stock, of wich the broker's client held 500 shares.

      "Well," said the analyst, "a sale sounds nice since the stock is up several points here. He ought to be glad to take the profit."

      To his surprise, the broker replied, "I wish it where that easy. You see, this guy is funny. He really hates to pay taxes, so I have an awful time getting him to sell to take a profit."

      The analyst responded that he had heard that tune more than a few times and joked that maybe the broker should point out to the client that he ought to like paying taxes on thousands in profit rather than having a loss to worry about. The analyst then suggested some offsetting losses to close out, to help soften the tax blow and put the client's portfolio in better shape.

      "Oh, no," said the broker, "he absolutely refuses to take a loss. I cannot even TALK to him about it; he's threatened to fire me if I do !"

      In disbelief the analyst asked, "Are you saying that you have a client who is invested in the stock market but will not take a profit to avoid capital-gains tax, and who will not take a loss as a matter of pride ? I'll wager lunch that he would refuse to sell a stock unchanged because it has not done what he expected."

      At that point, the broker scheduled that lunch because her client, indeed, insisted on continuing to hold stocks if unchanged because he also hated paying commissions.

      Whether the foregoing tale amuses or alarms the reader, there is a lesson in it. Here was an intelligent person, professionally successful, who owned a decent collection of municipals, as well as stocks and mutual funds. Not untypically, he had difficulty selling stocks whether they were up, down, or unchanged. Market participants like this always prompt that enduring question, "Why won't he sell ?" The broker, too, was seemingly powerless to provide help.

      There are many reasons investors have trouble selling their stocks. Brokers have their own distinct lists of hesitations about getting clients to sell. In fact, selling out of stocks is a universal problem. The inescapable conclusion is that people need help cashing in whether they are average, Main Street investors or professionnal such as brokers or money managers. One of the reasons assistance is needed is that there is very little information on selling provided in the marketplace. Much more attention must be given the art of selling our stocks--whether at a gain or at a loss. And an understanding must be developed that today, many brokers are product marketers rather than investment experts.

      Investors need to pay attention to the psychology of selling against human nature, to individual stocks and how they behave, to how both large and small investors think and act, and to brokers and the roles they play. Overwhelmingly, most books dealing with the stock market in any form focus on the buying transaction, neglecting the sell side of the equation almost completely. Selling may not be as exciting and is a narrower topic, but it is absolutely necessary and has its own very interesting twists and curiosities.

      This book is divided into four sections. The first describes the external and internal problems and pitfalls that investors face when confronted with a hold/sell choice. These obstructions tend to be structural in nature. The second section covers several necessary aspects of the mind-set needed to approach the hold/sell decision. These problems are related to a natural avoidance of closure, which can represent with deathlike finality the mortality of an investor's judgement. The third section prescribes important strategies that should be applied to generate smart selling decisions. The fourth section explores micro-level tactics for executing a liquidation strategy more effectively and profitably.

      The final two chapters provide readers with a checklist, to be used with each transaction, and with the ultimate sell-versus-hold test question, both of which function as learning devices.

      There is no difference between a long-term investor in the classic sense or a short-term trader when it comes to stock market success : to profit and stay in the game, one must know how, and be ready, to cash in--to sell--when the time is right. Profits are made only when both a purchase and the subsequent sale have been implemented well.


Table des matières

SECTION I
ROADBLOCKS TO PROFITABLE SELLING : REAL PROBLEMS, PHOBIAS, MYTHS, AND RATIONALIZATION1
Chapter 1
External Roadblocks3
Today's Broker3
Fallout from the Fidelity Phenomenon4
One-Stop Shopping5
New Techniques in Sales7
The Four-Letter Word : Sell9
Euphemisms10
Politics and Diplomacy11
The False Security of Low Initial Risk13
Underestimating the Seriousness of Changed Fundamentals14
Strategies to Overcome Fundamental Problems15
Buying and Holding, and Other Conditioned Behaviors16
Dividend Income17
Capital Appreciation19
Other Reasons19
Chapter 2
Hidden Reasons We Resist Selling21
Pain and Pleasure22
Why Holding Feels Right22
Why Selling Feels Uncomfortable23
Behavior Patterns that Protect Fragile Egos25
A Look Ahead26
Chapter 3
Internal Rationalizations27
Effective Commission Strategies29
Tax Phobia31
Tax Strategies32
Specialist Phobia (a.k.a. Stop-Order Phobia)32
Holding with a Death Grip38
Wishful Thinking39
Confusing Reality40
SECTION II
Developping the proper MIND-SET FOR PROFITABLE SALES43
Chapter 4
Acknowledge Mistakes45
Handling Mistakes45
Record Keeping47
Chapter 5
Keep a Clear Head53
Crowd Psychology54
Case Study54
Taking Time Out57
Chapter 6
Transform Denial into Action59
Denial and Loss59
The Schuller Corporation Case61
Denial Prevention62
Chapter 7
Require Realism to Support Hope65
Fundamental and Psycho-Mechanical Realities66
The Aftermath of the Crash68
The Hold Decision Ought to Be a Decision71
Using Charts74
A Word About Brokerage Commissions78
Chapter 8
The Irrelevance of Personal Cost Price79
The Irrelevance of Personal Cost Price79
When Might Cost Price Be Relevant ?82
Misusing Personal Cost Price83
Chapter 9
Understand that You Sell the Stock, Not the Company87
Separating the Stock and the Company87
Price Equals the Changing Level of Esteem
Chapter 10
Adopt Survival Tactics for the Institutional Jungle93
Surveying Today's Investment Scene : It's A Jungle Out There !93
How to Survive in the Institutional Jungle95
Taking Action to Avoid Being Trampled98
Summary : Beware of the Stampede99
SECTION III
MASTERING THE CONTRARIAN APPROACH101
Chapter 11
Be a Contrarian103
Defining the Contrarian Approach104
Mastering the Contrarian Approach
Chapter 12
Focus on the Time Value of Money109
The Rule of 72110
The 9.2 Percent Long-Term Rate111
Why Avoiding Losses Is So Crucial113
Anatomy of a Loss115
Chapter 13
Rethink That Old Buy-and-Hold Religion119
Fundamentals, Which Change, Drive Value121
Investor Psychology Drives Prices122
Why Selling is Important123
Chapter 14
Calibrate Decision Making to Personal Emotions131
Recognizing the General Warning Signs132
Knowing Your Personal Warning Signs133
Chapter 15
Adjust Sale Targets Rationally139
A Price Objective with Three Key Elements140
Modifications to Expectations142
Case Studies145
Chapter 16
A Suggested Exercise in Self-Discipline149
Letting an Options Trade Teach Discipline149
A Tutorial for Options Novices151
Chapter 17
Separate Selling from New Buying155
Rotational Group Leadership156
Beware of the Simultaneous Switch158
A Seller's Checklist160
Chapter 18
Use the Personal Diffusion Index161
Advance/Decline Indicators161
The Market Diffusion Indicator162
Chapter 19
Overcome Greed : Stop Chasing the Last Eighth171
Learn to Walk Away172
Beware of Rush Sales173
Hurried Thinking, Hurried Sales174
Chapter 20
Sell When It Just Feels So Good177
How Fast Can the Stock Rise ; For How Long ?178
What Further Good Things Could Happen to the Stock ?187
What if Good News Does Not Move the Stock ?189
Chapter 21
Sell into Price/Volume Crescendos and into Long Runs191
Gauging the Momentum192
Knowing the Odds in Runs198
SECTION IV
SELLING TACTICS203
Chapter 22
Differentiate Market Stock and Loner Stock Characteristics205
Portrait of a Market Stock206
Portrait of a Loner Stockv208
Chapter 23
Use Above-Market Instead of Stop-Loss Orders211
Weaknesses of Stop-Loss Orders212
Advantages of Above-Market Sell Orders216
Summary of Contrasting Styles and Results218
Chapter 24
Use Special Rules for Selling Low-Priced Stocks219
Consider Brokerage Firms' Policies220
Margin Loans221
Maintenance Margins225
Nonmarginable Stocks226
Chapter 25
Sell Smart on Good News231
Great News versus Huge News232
Acting on News233
Chapter 26
Understand How Bad the Bad News Is237
Differentiating Between Two Types of Bad News238
Reacting Intelligently to Bad News243
Chapter 27
Sell on News Delays251
Scheduled Announcements251
Dividend Declarations253
Earnings Reports254
Other Delays255
Chapter 28
Selling versus Holding in a Crash257
Recalling and Understanding Earlier Panics257
Weathering a Panic260
Stocks That Don't Fare Well261
Panic-Resilient Stocks262
Chapter 29
The Hold/Sell Decision Checklist265
20 Questions to Focus the Hold-versus-Sell Decision266
Evaluating Your Answers267
Chapter 30
Summing Up : The Winner's Test269
The Ultimate Test269
Consider the "Mother" Test271
Apply the Time-Value Test272
Applying the Ultimate Test : How Often ?275
A Final Word276
Appendix279
Index283

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