Skip to main content

Stop and Give Some Thought to Your Actions Before Taking Them

If you see something you love, then take a nibble, but big bites aren't on the menu for me today.
Comments

It's okay to sit this one out. It's okay to cut positions if you are long or take profits if you are short. It's okay to be down on the day.

It's okay.

It's one day. Don't let a single day define. And don't let a single day dictate the entirety of your portfolio. That means no rash decisions. If you are selling, understand why you are selling. Maybe you'll sleep better having less long exposure this weekend. That's a perfectly valid reason. Maybe a stock reported earnings weaker than you expected and now the valuation appears overly optimistic to you. Again, a valid reason. Maybe the current political unrest scares the hell out of you. If that's the case, you probably already have taken action so today should be nothing more than some trimming or hedging.

The point is: stop and give some thought to your actions before taking them. Maybe ping another trader or take a second look at recent news about the company or the current charts. I'm not telling anyone I think they should sit on their hands for hours, but give it a few minutes if you're feeling charged up or emotional.

This morning, I stepped away from my desk for a total of 20 minutes. The tweet that kicked selling into gear hit the stream ONE minute after I left my desk. I come back to a market that was essentially flat to down over 1%. Rather than firing off buy or sell buttons, I took a few minutes to read through the news and ping two trading buddies. They were much more level-headed than the PnL on my screen.

The only action I've taken is to put in a few of those "dream" flash crash day only buy orders well below current prices. Trade Desk (TTD) at $195. Village Farms (VFF) at $9. Apple (AAPL) at $172.50. Disney (DIS) at $105. Pinterest (PINS) at $25. StoneCo (STNE) at $24. Sea Ltd (SE) at $24. Orders like those on 15 names I would like to own. My chances of getting filled are virtually zero, but this is the perfect day for that. Most days the chances are somewhere in the 0.00001%; however, today, I'd say they are more 0.0001%. Note, those odds are made up, but you get the gist.

No need to force anything today. If you see something you love, then take a nibble, but big bites aren't on the menu for me today.

(Apple and Disney are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AAPL or DIS? Learn more now.)

At the time of publication, Timothy Collins was Long VFF, PINS.