Have you ever wanted to kick yourself because you sold a stock that just kept going up and up?
It happens to the best of us…
At Red Hot Penny Shares it happened with mining and construction and equipment company, Bell Equipment.
We bought the stock at 950c in September 2021 and sold it at 2421c in December 2023. Adding in the dividends we received I was very happy with a 169.58% gain.
By 17 July 2024, the stock hit R50.16… We could have made 442.73% in gains.
We thought the 169.58% gain at the time was stupendous. It turns out we hit the eject button way too early. Our reasoning at the time was sound. Bell blew past my target price of 1950c. And it was time to realise those profits and exit the position.
We even warned readers ‘the stock may continue higher’. However, we didn’t anticipate it more than doubling again this year!
Look, these things happen in small cap investing. Trust me: A too-early exit for a gain in the hundreds of per cent is WAY better than staying in a stock that loses you money.
But it doesn’t mean you can’t learn lessons from it.
Exit strategies are almost more important than picking what stocks to buy
Taking profits prematurely is annoying as hell, especially in this instance.
But we can tell you from experience it’s nowhere near as annoying as watching your profits blow away like sand in the wind because you held on too long…because you got emotionally attached to a trade that suddenly turns on you.
That happens a LOT with small caps.
For months on end, you’re winning. Then suddenly you’re pulling your hair and watching the stock plunge.
At Red Hot Penny Shares, we’ll give you guidelines on what we want out of a trade…the potential gains, and how long we want to be in that trade.
Our aim is to bring you actionable information on little known JSE listed penny stocks and small cap companies. Companies few people know about. We invest in these companies before they become mainstream news…
The great thing is there are hundreds of these small companies with great products, great stories, and great prospects. They are in virtually any kind of industry. But what they all have in common is that they are on the verge of something very good happening.
That’s what we’re looking for.
And right now, we believe the market is full of opportunity.
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