No predetermined timeframe. Obviously not every stock is going to be a winner. But for those which are it prevents me from selling too early. As it happens today was a very good day for me with both ALK and TLG running. I have 3 active parcels of ALK and 2 for TLG (purchased at different price points).... sold $3k of ALK and $2k of TLG.... so will be waiting to see if ALK hits $1.69 (the next sell point) or not and 77 cents for TLG. I will give it plenty of time because with those 2 stocks in particular I believe they are significant growth companies. But let's say they have peaked.... then at some stage I will lose patience, liquidate the position down to the free carry..... and start again later.
If I happen to be on a long term winner (which might take a long time to play out) managing the money this way translates into riding a 3 bagger and finishing up with 30% of the original purchase as free carry, $380 cash profit (after brokerage) and a return of the 9.5k capital.
I am mostly FA oriented, not afraid to buy when others are selling. However, I know the difference between a good and bad chart.
A bit of personal history.... I started in the market in 2004 with 40k. By 2008 I had lost the lot. For the next 10 years I put in 3 or 4k each year..... and basically lost the lot. However, I now feel I know enough about what I am doing to at least be a reasonably safe pair of hands. In August last year my life was completely turned upside down... as a result I ended up selling my house and went full time in the market. By March this year I had lost 1/3 of it... but trusted myself and now up 50%.
The first few years of loss was all due to not having any clue what I was doing (and polished off by the GFC)... the next few years was falling victim to some shysters in the market (ASIC really should be more vigilant).... the turning point very definitely came when I worked out a sensible money management and began to target better companies. Even so, when the market crashed early this year at one point I was down 30%... but I trusted myself and now up 50%.
What I have learned about money management is you need to always have some liquidity and it's best to keep it rolling over... if it's sitting in free carry that's fine, forget about it. If it's sitting in a stock which is improving don't take it out, instead think about adding to it. If it's not doing anything or going backwards rethink things.
