Fortunately, I don't often write up a stock like Visa, which I just reviewed on May 29, 2008, suggest a "Buy" rating, buy shares of the stock and then, two weeks later, sell them. However, that is exactly what has happened!
On May 29, 2008, after a partial sale of Copart (CPRT) on a gain, I purchased 70 shares of Visa (V) at a cost basis of $86.03. Yesterday, with the market once again under pressure, Visa shares were selling off, and as I wrote this post, were trading at $78.14/share, down $2.17 or 2.70% on the day. When they passed my 8% loss level, I initiated a sale and sold all 70 shares at $78.99. This worked out to a loss of $7.04 or 8.2% since purchase.
After an initial purchase of shares, no matter how much I 'like' a stock, I sell my shares should they decline to an (8)% loss. Since this is on 'bad news', I do not plan on replacing these shares, but instead am now back to my five position level, my minimum, and shall wait either for a sale on bad news (which I shall in this case find a replacement for), or a sale on good news to be buying a new position. 'Good news' for me is a partial sale of a holding at an appreciation target reached.
