Club buy/sell limit setting
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Club buy/sell limit setting Hello. During our investment club meeting today we discussed how to make better trades by predefining buy/sell orders for our stock portfolio. We meet monthly and this low frequency means we usually don't take advantage of market timing or anticipate opportunities well. I would like to hear a discussion in the cafe about how other clubs deal with predefined buy/sell orders and how they may set the limits (what formulas or algorithms they may use). We use Schwab for trades and any specific experience with how to set up Schwab trading account would be helpful. Thanks Norm C Blizard Sr Partner SCS Investment Club Columbus IN The simple answer is: We have never in the 25 years of existence of my club dealt with predefined buy/sell orders. Susan of Bower City Investors What good is the warmth of summer without the cold of winter to give it sweetness.
Our club toyed with stop loss orders and similar briefly. We decided that since we can make pitches, motions and votes via online (email) communications, we would accommodate decision-making outside of the monthly meetings via email. This allows for more context and discussion. Alicia Steel Magnolias Investment Club
What do you mean by a predefined buy/sell? We have on occasion set a limit price for a buy or sell but did not use a formula or algorithm to arrive at the price. We used the SSG to find a buy price. If the price was close to the low end of the hold range, then we set a limit price that was at the high end of the buy range.
On January 10, 2020 at 3:35 PM "Norm C Blizard via bivio.com" <user*36041900001@bivio.com> wrote: My original Club [Stockfarmers Investment Club] took a position in ISRG [in I believe 2003]at under $50 a share. The stock did well and when it passed $200 a share I started getting nervous. I convinced my partners to place a trailing stop order at 10 0r 12% below the current price. The stock continued to go up and up and up and reached $393 a share then proceeded to drop like a stone, our trailing stop kicked us out at better than $360 a share what's not to like? ISRG fell below $200 a share and I could never convince my partners to buy back in [but I did]! Since then it has done well, today it reached a high of $616 a share after a 3 for one stock split in 2017 but pulled back under $600 at the close. If we still had those original shares at under $50 a share our position would be worth about $1800.00 a share. Len Douglass From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Alicia Peycelon via bivio.com Our club toyed with stop loss orders and similar briefly. We decided that since we can make pitches, motions and votes via online (email) communications, we would accommodate decision-making outside of the monthly meetings via email. This allows for more context and discussion. Alicia Steel Magnolias Investment Club On Fri, Jan 10, 2020 at 5:21 PM Susan Maciolek via bivio.com <user*29631800001@bivio.com> wrote:
Gee, Len---pat yourself on the back! How do I subscribe to the Douglas Newsletter?
Mike L in Northern California
On January 10, 2020 at 6:18 PM "Leonard E. Douglass via bivio.com" <user*20291800001@bivio.com> wrote: I think what was meant (by the proponent) was setting limit price in Schwab trading platform for a stock buy or sell which would kick in without further 'user' intervention. I would be interested in how SSG can be used to arrive at a buy price. How do you determine a sell price? Thanks Norm From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of MARTHA RHODE via bivio.com What do you mean by a predefined buy/sell? We have on occasion set a limit price for a buy or sell but did not use a formula or algorithm to arrive at the price. We used the SSG to find a buy price. If the price was close to the low end of the hold range, then we set a limit price that was at the high end of the buy range.
My ignorance is a terrible thing. I presume the "SSG" is a "stock selection guide." There used to be one we used when we used the "Better Investing" service, but I do not know where such a guide is available now. Please advise. Peter Dunkelberger Sumner Stock Selectors Investment Club
Here is where you will find the SSG and many webinars to help you improve your skills. Bob
We typically will have a few limit orders in the portfolio at any given time, almost always sell orders, and typically based on a combination of an SSG analysis along with club consensus. But the general club philosophy has been to stay away from trying to "timing the market" - if we think the position is poor, we exit and move to something else. Which does raise another question: how much movement are clubs having with their portfolio in a given year? I looked back over the last few years and we typically will move out of about 1/3 of the positions we hold (turnover of .36) with the other 2/3's as longer-term holds. How does this compare to others? From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of MICHAEL LEANA via bivio.com Gee, Len---pat yourself on the back! How do I subscribe to the Douglas Newsletter? Mike L in Northern California
Thanks Robert. Peter
On 2020-01-11 07:56, Norm C Blizard via bivio.com wrote: > I think what was meant (by the proponent) was setting limit price in > Schwab trading platform for a stock buy or sell which would kick in > without further ‘user’ intervention. I would be interested in how > SSG can be used to arrive at a buy price. How do you determine a sell > price? > > Thanks Norm > > FROM: club_cafe@bivio.com <club_cafe@bivio.com> ON BEHALF OF MARTHA > RHODE via bivio.com > SENT: Friday, January 10, 2020 5:39 PM > TO: club_cafe@bivio.com > SUBJECT: Re: [club_cafe] Club buy/sell limit setting > > What do you mean by a predefined buy/sell? We have on occasion set a > limit price for a buy or sell but did not use a formula or algorithm > to arrive at the price. We used the SSG to find a buy price. If the > price was close to the low end of the hold range, then we set a limit > price that was at the high end of the buy range. > >> On January 10, 2020 at 3:35 PM "Norm C Blizard via bivio.com" >> <user*36041900001@bivio.com> wrote: >> >> Hello. During our investment club meeting today we discussed how to >> make better trades by predefining buy/sell orders for our stock >> portfolio. We meet monthly and this low frequency means we usually >> don’t take advantage of market timing or anticipate opportunities >> well. I would like to hear a discussion in the café about how other >> clubs deal with predefined buy/sell orders and how they may set the >> limits (what formulas or algorithms they may use). We use Schwab >> for trades and any specific experience with how to set up Schwab >> trading account would be helpful. >> >> Thanks >> >> Norm C Blizard >> >> Sr Partner >> >> SCS Investment Club >> >> Columbus IN One concept could be to sell cash secured puts (options). Let's say your SSG says you have a great company but would like to buy it at a lower price. If the current price was $35 but you would like to buy it at $30 then you could sell a put option with a strike price of $30. If the price does pullback to $30 or less by the expiration date of your option then you would be assigned the stock at $30. Your cost basis would be $30 minus the premium you received for the option you sold. You would need to have the cash in your brokerage to be able to buy 100 shares per option contract (cash secured). If the stock does not pullback then you get to keep the premium you received from selling the put. You can now sell another cash secured put and bring in more premium. I know options are not for everyone but selling cash secured puts is an interesting concept to use for overvalued stock. Of course once you own the stock then another interesting concept would be to sell covered calls to bring in more income. - Barry Our bylaws state that all buys and sells must be placed Monday Morning following the Saturday Meeting Sent from my iPhone On Jan 10, 2020, at 5:22 PM, Susan Maciolek via bivio.com <user*29631800001@bivio.com> wrote:
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