Some days we have a stellar morning. A lot of the things we bought keep going and some of the stuff we had held over is up pretty big. Then as the market starts weakening, we start selling halfs. Why? Because if you are up nicely on something, we don't need to see it fall all the way back to the stop before selling it!

We put the stops in as guidlines to go by. They are most often used as a safety measure to keep you from losing too much on an entry. But once you are in a stock and the thing has moved up, it really doesn't make sense to leave that stop below where you bought it right? Right. Move it up.

But, and this is very important, sometimes we get really lucky and see a stock blast off. Take PDLI for example. One time we said to buy it on a move over 60, and it opened a bit over 60, then a bit of a wiggle and up it started. We jumped in at 60.45 and by that noon it was up to 66.10! Well we are NOT going to let a gift horse like that get away, so we sold half at 65.90. Then we decided to move the stop on the balance up to 64.

As you can see, the stops aren't written in stone folks. if we were sitting by your side, this would be easier for all of us, but with the letter coming out in the evening, you have to make a few value judgements during the day. In other words don't let a great run get spoiled by sticking to some stop we attached to the stock. The heck with that, they are there to protect you, not tell you where a stock may drop back to and bounce! Sell that puppy if you have a good gain! (or at least sell half, you can always buy more!)

So, to wrap this up, we are pretty quick to take profits. Some of you may think we are "too quick" and that's okay, Whatever style suits you is fine. But that said we would always rather sell too soon and pocket a profit than to let the market whipsaw us and take our profit away! So when you are up nicely, move the stop either mechanically or mentally and if the stock starts falling go ahead and sell.

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