To the Lord let praises be.
It's time for dinner now let's go eat.
My little sermon for today has for its text the homily:
Never let a trade turn into an investment.
What does this mean? It means you should never deceive yourself into thinking that a dinky little stock you just bought for a few days is, in fact, a long-term investment, long enough at least for you get all your shekels back. It expresses the wisdom that this is a recipe for riding a loser all the way to the ground.
I confess that I have deluded myself in just this way, more than once. And I repent of it. However, my experience has shown me that the rule only applies to stocks that are losers. If your stock goes down just because it is temporarily in what Cramer stoops to call the Bow-Wow Chateau, then, I humbly suggest, that you have a recipe for selling out at the bottom.
A more comprehensive strategy would allow an investment to be held as a trade if the outlook is bright in the near term, but as an investment, even if the near term is grim, if the long term is great. And it would be allowable to change a trade into an investment or an investment into a trade, as the situation warrants.
I have applied this strategy to trading-and-investing ATPG. I am now in investment mode, but am constantly re-evaluating the situation, going forward, to determine if I should go back into trade mode.
So far, I have been successful with this strategy. But, considering that I am an undisciplined trader, I have not been playing with enough shekels to really hurt myself.