Saturday, March 10, 2012

Poof Be Gone Loser!

Some of you may recall my post about my biggest loser and stock reversal splits. You can read about that here http://poortorichadayatatime.blogspot.com/2011/12/reverse-stock-splits-my-biggest-stock.html

A stock reversal split basically means a consolidation of shares to try to increase share prices and can be a sign a company is having some financial difficulties.

After a particular pick of mine had a reverse stock split back in November, I thought, okay I will ride it out a little while longer. Little did I know just 4 months later, they would call for yet another reverse stock split of 1:500, that means for every 500 shares you held it would be reduced down to 1.

Many things went into this, such as trying to stop a corporate take over, defaulting on equipment in one of their companies so they would not see a revenue at all this year from that company and the fact that if they default on a 2 million loan they would not have enough shares to trade over to settle that loan.

There is no sense holding on to a company that is dragging your portfolio down,keeping it in the red. There is no place for emotional attachments in the world of investing. Cut your losses and move on, learn from the experience and make better investment choices in the future.

Since cutting my loss, my portfolio is back in the green and in a much better place for it.

Keep on truckin on............