stop losses and a bit of panic, page-5

No foresight involved, lost out on dips with stops in PDN, MTN, CUL, ARU, all of which I intended to hold for >12 months (two only a week shy of that) so not only have I to pay full CGT on my gains over the past several months on those, but if I want back in I'll have to pay more. From now on stops will be tight or not at all - there is little point in setting a stop at a price at which I would want to buy more on fundamental grounds.

If I was short-term trading GDN I would have had a tight stop (About $1.00) and would have been OK and able to buy back cheaper, but as the majority of my shares I buy to hold at least 12 months I'd rather not get stopped out just because of a brief fluctuation in sentiment. Even if I had been stopped out on GDN at $1.05 today and bought back in at 72c I would lose out on tax in a big way assuming this will be at least $1.25 by the time 12 months is up on most of my holdings in July (bought at ave 24c).

I am not saying stops are not a very useful tool, just that if you are primarily a fundamentals investor with a 1-3 year timeframe on most stocks that you have to treat them with caution and use them sparingly if you want to maximise your returns. For the few shorter term trades I do that are based as much on technicals as fundamentals I wouldn't dream of not setting a stop-loss. I don't have any stops currently as I don't see any good short-term trades at the moment so all my stocks are long-term or blues (maybe GDN, EMR, UMC, PEN, PPPO and SIM are the only potential good short-term punts I know of at todays closing prices though all have a big chance of falling as well).