Here’s our Club Mailbag email [email protected] — so you send your questions directly to Jim Cramer and his team of analysts. We can’t offer personal investing advice. We will only consider more general questions about the investment process or stocks in the portfolio or related industries. This week’s question: I want to follow the Club’s advice to lock in profits, raise cash, and not get slaughtered, esp. given the run in the Super Six. But I’m unclear on how to formulate an exit and re-entry strategy, so I just let the shares run and I feel like a hog running towards slaughter! Once you’ve decided to raise cash, are there principles for the exit and re-entry that I should employ — Thanks, EF While we can’t provide individual investing advice, we can talk about some of the key considerations that help inform our decisions on taking profits and leaving room for future purchases. Taking profits 1. Why are you selling in the first place? The answer may be that the stock has run too far, too fast. In this scenario, it can be very tempting to let some go – and if you’re feeling piggish, you should probably do so. 2. You must also think: Why is the move taking place? Is stock up on no news? That could be more of a reason to sell. Or did the company just blow away the quarter and guide? That case might argue to hold on. A move on multiple expansion is unsustainable. But a move on higher-than-expected earnings is sustainable because the stock isn’t getting more expensive from a valuation perspective. That’s been the story with Nvidia over the past year. Example We kicked of 2024 trimming several big 2023 winners because we had been feeling greedy. Some of those trims proved prudent as the stocks subsequently pulled back while others kept running. However, we can’t let “woulda, shoulda, coulda” thinking and fear of missing the next leg higher cause us to lose our discipline. As noted at the time of the sale, discipline trumps conviction because as Jim…
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