Emotions in Motion

I find myself in exactly the situation that the books I've read describe.

I decided to hold (SOL) for the long term play, and since that decision the market, the solar group, and the stock itself have all changed significantly.

The Dow is testing it's March and January lows, and the third leg in this bear market could be over soon or might just be getting started now.

The Energy-Other industry group, which includes solar, is still ranked in the top five at IBD, but a lot of the leadership in the group is coal companies, and the solars are not flying like they were a couple months ago.

Then there is (SOL)... Man, a lot can change in a couple of months. This stock just can't get a bid. I've gone on about the situation ad nauseum, so instead of writing more about that, I'll talk about how I react to it.

It's not good. I've fallen prey to the trap that I've heard so much about. I had a stock that was up 90%, and it came back on me. I'm up 25% after today's close. Now I badly want for the stock to recover and succeed, both for the money and so that I was 'right' - of course being in this situation it would seem I'm wrong already, no matter what the stock does from here.

I don't want to sell and admit defeat, but each day I watch the stock weaken, in total disbelief. I stare at the live chart waiting for the institutions to pile back in. Honestly, I'm not kidding - I really curse the fund managers as I sit there. Sometimes it feels personal, like they hung me out to dry. How dumb is that???

I watch the news wires for any inkling of why the stock's in trouble, for any article that could spur a comeback - all the while knowing this is NOT how I've learned to invest.

Why, then, haven't I just sold? I can't tell you that my motivation is clear and right, but I hope the reason is that I don't want to make a bad situation worse. The stock still has some time to retake the 50 dma and get back on track, and yes - I'm concerned that it will do so the moment I pull out. There has not been any massive selling in the past couple of weeks, in fact the weekly chart is showing a contraction in volume this week. I'm probably kidding myself, but it might be wearing out of sellers.

It's easy to be disciplined and make the right decisions when everything is going well. Or, maybe it's not - because when everything is going well is the time to sell, and I have a lot of trouble doing that. It will take weeks or months to pass before I can review this saga and make some definitive rules for myself from it, but it's clear I'll have to do that. I can't build a career out of investing if I end up in these points of indecision - right or wrong I must determine what I will do in any given situation.

I know enough successful investors that go 100% during any correction that it seems that might be the right course of action. I could even trail a stop behind my winners once we enter a correction, so if they continue up I'll get the move but if they drop I'm out.

Right now I can tell you that anything looks preferable to being in this position again.

-Geoff