Ask Colin

I was interested in your 'Trading' column in November Shares magazine where you talked about market panics and specifically your experience with Boral (BLD). As the price hit your stop level you sold as per your plan. So, without taking up too much of your time: (1) when do you consider buying again? (2) Have you bought back into Boral? Or are you waiting it out to see if the downward trend in the general market continues?

I was interested in your 'Trading' column in November Shares magazine where you talked about market panics and specifically your experience with Boral (BLD). As the price hit your stop level you sold as per your plan. So, without taking up too much of your time: (1) when do you consider buying again? (2) Have you bought back into Boral? Or are you waiting it out to see if the downward trend in the general market continues?

My trading plan calls for holding stocks while they are trending up. If they break down out of their trend, I sell them. This is exactly the way I played Boral.

Now, sometimes I get shaken out of a stock that breaks its uptrend, only to begin trending up again. That will happen from time to time. My trading plan deals with this by having a guideline that I consider buying back into the stock if it makes a new high for the trend. Boral did this on one day and then failed and has fallen back quite a way. I was watching it, but there was no follow through on the new high, so that was the end of that for the time being.

Now, whether I actually do buy back into a stock will depend on many things. I may not have free funds when the opportunity arises. Or my trading plan may not call for new investments at that time. This latter situation would have been the case with Boral. Since I see us as being in a bear market, I am not making new investments until I feel sure that we are well into the final phase of the bear trend.

On the general subject of frustration at missing an opportunity. Learn not to worry about it - you cannot buy all the stocks that look good. It is a bit like worrying about missing a train. There is nothing you can do about it now. Another train will come along soon, they always do.

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