Microsoft Stock investment question?

Question

Im a shareholder of MSFT, i bought in at 29.90 we are well below that now because of the markets recent bearish trend. where should i exit this trade? should i take in the loss or wait long term, Microsoft is coming out with a new operating system and the stock seemed very over sold at even 30 dollars to me. what are your thoughts?

Answer 1

You are talking the typical gibberish of someone who understands its a game but does not understand they are the mark.

The only holding period for a stock is forever.  If you do not intend to hold a stock forever (as a small investor), you have no business buying an individual stock because you are going to do exactly what you are doing now:  drive yourself crazy questioning every movement whenever the stock is down and overwhelming yourself with your own brilliance with each up tick.

Do you not understand what random movement in the stock market is?  

If you have no conviction to stay forever, sell.

For the record, my definition of "small investor in a stock" is any individual who has less than $1 million in any particular stock or less than $10 million invested in the stock market as a whole.  If that be you -- you be the mark.  

Given enough time + dumb mistakes, the market pros will eat you hook, line, and sinker.

(Don't feel bad -- it isn't just you -- the are voracious carnivores with cannibalistic tendencies)

Answer 2

Today 6/3/08 it closed at 27.31. Looks like it may retest the 26.87 low of 3/3/08. I'd get out if it goes much below that on volume!

Answer 3

It's tough when you get in and it immediately turns south. I don't think I would exit it yet, but it is up to you to decide when you have taken enough punishment. You should set your exits before you enter a trade incase in turns against you. What is your risk threshold? 5%? 10%, 15%? It all depends on how much of this stock you own, relative to the rest of your portfolio. Do you want to take this money and invest it in something else? Would you consider selling options against your long position, and see if you can recoup some of the downturn?Tech seems to be improving a bit. I read a good book that addresses cutting your losses. It is called Trade Your Way To Wealth by Bill Kraft.

Answer 4

Until, this MSFT YHOO revised bid or partial bid is resolved the stocks will be mixed.

It sounds as if you are trading. If you are concerned that a stock can fall $2.50 after you bought it, you should not be in the trade. Stocks are very volatile, esp over the last year. There are ton of factors for this. Too many to list, see my prev posts.

Personally I like MSFT longer term, but I don't own any right now.