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MRVL- The Trade That Turned Into an Investment That Turned Ugly
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One of my most important rules is to never let a trade turn into an investment. This always happens when I have a trade that I expect to hold onto for 1-3 days but goes the opposite direction that I expect it too.
I bought MRVL because of the iPhone hype, they make the chip that allows the phone to hop in and out of wifi networks. I still believe that this is an EXTREMELY important technology and all phones will have it in the coming months. What I didn't realize (but do now) was how closely MRVL follows the markets. If the market is up so is MRVL and visa versa.
I have never seen a tech stock that acts this way because most tech companies are off in lala land. But since MRVL is a child of the tech boom (year 2000), it seems to trade with the rest of the sectors.
I bought in 100 shares of MRVL at $19.36 on 7/23/07.
It had gone from $16 to $20 over the last 3 months when it had a nice little pullback. I saw this as profit taking and a good buying opportunity. What I wasn't expecting was for the market to turn on me the way it did. MRVL followed it all the way down to $16.50 where I sold out of fear at $16.62
It recently popped back up to the 18 range (that what always happens when i sell out of fear). Looking back I never should have held this stock more than a few days in the first place. When I noticed that it wasn't going the direction I anticipated (which was pretty quickly) I should have sold and never looked back.
Looks like another loss to write off. |
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This site is not just a place for me to speak my mind, my goal is for these posts to be a catalyst for conversation. If I have stimulated some thoughts/ideas please be sure to contribute below. Dont be shy =)
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