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I purchased 20 shares of tesla Feb 10th or 11th at $146.63 a share. I had a strong indication that the stock price over corrected with the downturn in the market and also the quarterly reports. I also assumed that with their upcoming Model 3 release the stock price would swing back up.

My exit strategy going into the stock was at $230 a share I was going to get my investment back out and let the rest sit until the end of time. I assumed that at best I could get $230 a share when the new car was announced.

Well on Friday it closed at $232 a share and there is still a week and a half until the announcement. It's very likely that this stock can approach $300 a share.

So here is my question. Does a disciplined investor stick with their original strategy and get out or do they stay in and make more? Also, I anticipate that this stock is worth around $260 a share. So am I silly for not selling it all if it goes above that?

Ehh good problems to have but still tough to decide. I don't want to miss bigger gains.

JoeTaxpayer
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DotNetRussell
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2 Answers2

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Ask yourself a better question:

Under my current investment criteria would I buy the stock at this price? If the answer to that question is yes you need to work out at what price you would now sell out of the position. Think of these as totally separate decisions from your original decisions to buy and at what price to sell. If you would buy the stock now if you didn't already hold a position then you should keep that position as if you had sold out at the price that you had originally seen as your take profit level and bought a new position at the current price without incurring the costs. If you would not buy now by those criteria then you should sell out as planned. This is essentially netting off two investing decisions.

Something to think about is that the world has changed and if you knew what you know now then you would probably have set your price limit higher. To be disciplined as an investor also means reviewing current positions frequently and without any sympathy for past decisions.

MD-Tech
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One of things I've learned about trading on the stock market is not to let your emotions get to you. Greed and fear are among them.

You may be overthinking. Why not keep it simple, if you think it can go up to $300 a share, put in a stop loss at $X amount where you would secure your invested money along with some gains. If it goes up, let it go up, if it doesn't well you got an exit.

Then if it goes up change your stop loss amount higher if you are feeling more optimistic about the stock.

And by the way, a disciplined investor would stick to their strategy but also have the smarts to rethink it on the fly such as in a situation like you are in. Just in my opinion anyway, but congrats on the gain! Some gains are better than none.

NuWin
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