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Smarty_Pants

Smarty_Pants
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  • Why I Have Abbott On A Stop-Loss Order [View article]
    "If there's a chance they "may make a mess of things", I wouldn't wait around to see if it's true." - Globalx

    I don't consider that harsh. Everything I own entails risk in some degree.

    My position in ABT was one of the first DG stocks I bought, so it grew into quite a large fraction of my portfolio. It represented about 16% of my entire holdings (11 stocks total). Selling down after the year long run up in price was done precisely to reduce my risk to a level I can easily tolerate. ABT now represents about 3% of my portfolio.

    As for "making a mess", my intent was to say that my much smaller position makes me willing to give ABT's management the benefit of the doubt regarding the spin-off. I'll hold my shares until they make an obvious mistake that would warrant selling.

    Absent that, I'm going to assume that they are doing the right things for the company and the shareholders. They have a decades long culture of rewarding their shareholders. For a 3% maximum portfolio risk I'm willing to believe they will continue that culture until I am proven wrong by events.

    Thanks for posting your comment. I didn't do a very thorough job of explaining my initial post.
    May 30, 2012. 09:11 PM | 2 Likes Like |Link to Comment
  • Why I Have Abbott On A Stop-Loss Order [View article]
    Thanks richjoy. The market has been looking awfully toppy of late so I figured it was time to build up a bigger cash position.

    With that in mind, I also decided to cut my 'standard' position size in half and try to add different stocks during any significant downturn when valuations are much better than they are now. There are a lot of must have stocks that just seem too pricey to me now. Hopefully I can add some of those during the summer.
    May 30, 2012. 08:40 AM | 1 Like Like |Link to Comment
  • Why I Have Abbott On A Stop-Loss Order [View article]
    I beat richjoy to the punch and entered a limit sell order at 62.50 a little over a week ago. The order was filled last week and I liquidated 2/3 of my ABT position (entered in the mid 40s) at that price.

    The cash I have at risk in the remaining shares (after accounting for the profit on shares sold) works out to a cost of about $20 per share. At that basis, with a smaller allocation, I can wait to see what happens post-split.

    The neato aspect of selling part and holding part is that the YOC of those remaining shares is above 11% on a cash-at-risk basis.

    I can live with that for now. Until I see ABT just completely make a mess of things, I'll be holding my remaining shares and hoping they continue to perform well.
    May 29, 2012. 10:31 PM | 2 Likes Like |Link to Comment
  • Why I Have Abbott On A Stop-Loss Order [View article]
    "I just changed my order to a sell-stop-limit order. It works the same as a sell-stop, except by placing a limit just below the stop price, the order won't execute except at a price above the limit I specified. That seems to protect me against the risk of a flash crash" - DVK

    Uh ... that order comes with a risk you don't identify in your comment.

    If the price drops below your limit price and continues downward you will not be sold out at all. The price may never recover above your limit price and thus your order will never execute, all while your stock value continues downward.

    Be sure to evaluate all possible outcomes when you begin using more complex order types. Sometimes the gain you get by using them is offset by some much worse case.
    May 29, 2012. 10:24 PM | 3 Likes Like |Link to Comment
  • Abbott Labs: Key Dividend Yield Levels to Watch [View article]
    Ooooo! An article on the very first d-g stock that I bought. I just started building up positions in d-g stocks and ABT was my first choice after considering many great articles and comments from several of the authors and posters here on SA. I got my shares at about $47.90 in January of 2011.

    As your chart shows, the price immediately fell to $45 (naturally). But only a few months later, ABT has increased its dividend, my YOC is roughly 4%, and the price is up over 9% from my entry point. Even after the rough start, I'm feeling pretty good about buying a quality d-g stock.

    For those readers out there who are sitting on the fence, try sticking your toe in the water with a small position in one of the tried and true companies recommended by many of the excellent posters. You have to get started sometime.

    Thanks for the chart with yield zones. That seems like a handy way to divine a suitable price for a limit order when buying.
    Apr 28, 2011. 11:53 PM | 4 Likes Like |Link to Comment
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