10.30.06
Shares of Mittal Steel (MT) Sold at $41.91
On January 18, 2006, I purchased a whopping 25 shares of Mittal Steel (MT) for $27.92. My target price was a zealous $40.
After going through various ups and downs with the company, I decided to put a 5% trailing stop loss when the stock neared the high 39s. I tightened it to 4% shortly thereafter.
After a drop over the weekend, the stock sold at $41.91 this morning.
My gain was 50.1%, or a gain of $349.75. However, I will be heavily taxed due to my buying it in January.
I bought this stock when getting back into investing after a very long lay-off. It was obviously a great purchase, and definitely entertaining to watch the dramatic news as Mittal bought Arcelor Steel in hostile fashion (my style).
I will continue to watch MT. If it cycles again, you can be assured that I’ll buy it under $30. The steel industry is fun to follow, as it consolidates and the players become bigger and more efficient. Lakshmi Mittal is a total badass, and I have no problem investing in him, possibly for the long-term next time.
As you can see from the chart, I learned my lesson earlier on. Regardless of the amount of money, a 50% gain is nothing to laugh about. Hell, a 20% gain is nothing to laugh about. I could have re-bought at my original position with way more stock and sold it again. Thus, I learned to use the trailing stop loss to stop my greed.
My future strategies will be to invest in solid companies that are currently disliked by the mainstream — a contrarian view that I love, right out of Benjamin Graham’s arsenal. I will continue to be greedy, but only on the buying side. If a stock isn’t cheap enough for me to buy, then I won’t do it. I will greedily lower my buying price. But for selling, I will be smart and take my gains if they’re big while I can.
Charting software used is Charter, from my good man Frank over at www.technicator.net
Related posts:
Uncle Anthony said,
11.18.06 at 10:04 am
Good pick. Sounds like you did your homework. At your age the aggressive approach is sound, but be careful of the greed. Sounds like you passed over the fear. The IRS will be happy to hear from you (especially with a short term gain). The hate stocks I have done well in are the tobacco stocks i.e MO, CG, and RAI. Over 100% gains in 3 years, plus a hefty dividend that keeps being increased every year.