Today (February 5, 2013) Diana Containerships (NASDAQ:DCIX) took a significant hit, to the tune of ~ 12%. As was the case when Triangle Capital (NYSE:TCAP) took a significant hit last year I was upset - everything else in my portfolio is up, and the losses to DCIX was enough to offset my gains, and then some.
As I started picking up the pieces, I checked my broker's website (Merrill Lynch), and discovered something really amazing.
Turns out that about a week ago I had put stop losses on some of my bigger profiting companies just to protect myself from market whims. Also turns out - as luck would have it - I had set a stop on my DCIX at a point where it would protect half my profits.
The stop worked, and my DCIX was sold @ $6.70. It is (as of this writing) around $6.09.
Many times my colleagues have chuckled at my use of stops. "Not necessary!" they said. "Waste of time!"
Who's laughing now?
Protect yourself - put stops on your valuable holdings. The DCIX melt-down was not precipitated by any publicly-released information - although I do know what contributed to it, I shall avoid mentioning anything about that. You never know when something is going to happen.
Disclosure: I am long TCAP.
Additional disclosure: I do intend to establish a new position on DCIX within the next 72 hours.