This can be a frustrating sport, trading stocks. PTSC dropped 20% today, after running up over 500% from when it was first discussed here on Valentines day. NNVC came through with a 10% gain, making it's run well over 1500% from it's humble beginnings here last fall.
Many of you have gotten in at much higher prices with returns much less then those described above. Thus, a day like today, where everything (except NNVC) wilts is problematic; protect equity, stand pat, add-on? I can tell you what I am doing, but look at my entries, is it really the same problem? Everyone has their own paradigm here, no one answer fits all. But understanding the basic premises under which we are playing, the strategies that underlie our holdings, may be helpful at times like this.
If you recall, our approach to Bird Flu stocks is to buy a basket of 6-8 small cap stocks that are focusing on research and development of products dealing directly or indirectly with Bird Flu. It's a lottery, we don't know which stock will hold the winning number, just hoping that with a logical, reasoned selection, we either own the winner outright or that the entire basket rises on the coming hype and fear surrounding Bird Flu.
That's also what I am doing with these other stocks, only without the common denominator of being related to Bird Flu. By assembling a basket of penny stocks, low capitalization technology stocks and/or inexpensive special situations, we are hoping that either we get a direct hit of devine providence, or, that the Wolanchuck-Dent Bull Market of Epic Proportions comes to our rescue and carries the entire basket away to the land of wealth and fame.
Going forward, it may be helpful to keep these strategies in mind and not get too discouraged by the price action of any particular stock on any particular day. I guess you can say the same thing about not getting too excited about the run-ups of any one stock on any one day. But it doesn't work like that. When stocks run-up, WE RULE. When they don't, we wax philosophic.