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A Couple more Stop Loss Alerts

By Travis Johnson, Stock Gumshoe, January 13, 2016

As has been the norm for the past couple weeks of market weakness, the Tradestops.com stop loss alerts I’ve been experimenting with have hit more alerts this week in my personal portfolio… so I’ve got two more entries in the “stop loss test” to tell you about.

We had a stop loss triggered for Douglas Dynamics at $18 and change, so I followed that for half of my position. My inclination, as the shares have dipped further over this past week would have been to buy more… so this sets a showdown (again) between my preference and the stop loss alert from Tradestops. If you haven’t seen my earlier notes about this, I’m basically, with a few exceptions of stocks I’m unwilling to sell, cutting each position in half in my portfolio and using Tradestops.com alerts for half and “the old way” (deciding based on my personal opinion about current valuation and prospects) for the other half.

So far, in the generally weak market over the last six months, stop losses are winning… but this test isn’t about six months, it’s about seeing if this helps me manage my investing emotions better, and seeing whether I can live with a strict stop loss regimen for at least part of my portfolio or whether the patience (or value shopping opportunism) that I might personally be inclined to in some cases would have been a better call. So far it’s making me gnash my teeth a bit, but it’s also saving me some hits to my portfolio (again, at least for now).

And a stop loss also triggered for Criteo (CRTO), the retargeting ad tech company that has been very volatile and that I still think has good prospects for either building their marketplace or being acquired by a larger player (of course, that doesn’t mean it will be acquired by a larger company at a price I like).

My inclination on this one personally would be to hold and sit through the volatility, not necessarily to buy more, so, as I’ve set up the test, I’m holding half and respecting the stop loss with the other half. More for the test spreadsheet so I can look back in a few months (or years, perhaps) and see how these decisions worked… but, as I noted, so far the stop losses are doing just what they’re supposed to do: They’re stopping ...

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