Robert Freedland

Why I Sold Johnson Controls

Livingstone,

Thank you for your advice. Your points regarding writing calls are on the mark and may well be helpful to the investor that wishes to add this to their own regimen.

I have been sizing my investments on the basis of the size of my own holdings. As I build to my 20 position maximum, I purchase the number of shares that will reflect 125% of my average size holding. This is why I purchased the 82 share position.

When I am at my 5 position minimum and am replacing a holding, I purchase a position at 50% of my average holding.

I purchase shares with the hope that I will be able to hold them long-term. However, I sell those shares either if they should decline 8% after an initial purchase (or at other pre-set points if they have previously appreciated in price), or upon the announcement of some fundamental information such as an earnings report that fails to meet expectations or reduced guidance.

In this case you are absolutely correct that my timing was horrendous. But timing is usually judged by a retrospective view and that view is currently short-term. Hopefully six months from now, even my horrendous timing that day won't seem that bad upon analysis.

Thank you for your suggestions which are well-stated and informative. I am busy trying to develop a different sort of trading system which time will tell will be profitable or not.

And User 44578, I would agree that Livingstone's comments were more informative than my own entry which was a reflection of my larger trading system and view on the prospects of JCI rather than a comment on the utilization of call options to maximize one's profits.

End of Year Portfolio Performance Review

I think that is my typo. These are stocks as of December 31, 2008. I am probably not old enough to have these kind of 'senior moments'....:). Thanks for the correction. Have a Happy New Year!