Hi Timwvurx,
First off congratulations! Incredible returns over the last year and quite impressive.
Having said that, I have to offer caution here. Your accolades to this board are great and right on the button. Impressive community built here and one of the first places I go to read on the boards (except maybe the boards to which I am tickerguide!). It is an awesome place to come look for stock and portfolio advice. However, you need to understand that a large number of the stocks here are high flyers and very volatile and the last year has been great for them and it appears that you have leveraged them quite strongly.
If you read Saul’s knowledge base you will see that he talks about staying invested through thick and thin. Not panicking in bear markets where 50% reductions occur. I understand you are thinking about buying puts but you haven’t as of yet. Are you ready for a 50% reduction?
It is kind of interesting because your first post talked about starting on a strategy, show some initial profits and then get hit with big losses. Well I can’t help but feel like you are in the middle of that experience again. You just haven’t been hit yet. So I have a homework assignment for you, if you want to do it.
Take your entire portfolio and assume that every position goes down by 25% in a week. No trades, no fudging by saying you would get out, just roll up the numbers. I am guessing you might lose more than 50% of your equity. Maybe a bit more than 50%.
A 25% drop can happen, some goofball in power in North Korea could decide to push the button, or about 100 other scenarios I can think of. Not what I expect but where would you be… can you live with that? I guarantee you Saul understands the risk of a 25% reduction, he’s lived through it more than once and I believe it is why he doesn’t deal in options, that would be crazy with tha type of stocks he owns.
Now I am not telling you not to use options, i use options. I am telling you to understand the leverage you are using. If the answer to my question isn’t bad or at least one you can honestly live with, then okay.
And again congrats, the truth is even, if you went too far, you have won!!! Perhaps it is time to walk away from the table while you are ahead…or at least pull some money off the table, get some sleep and decide on what your next step should be.
Finally, this is not meant to offend. I apologize in advance if you have been offended. I mean only to offer advice I would want someone to tell me… good luck and congrats Again. It sounds like you have taken a big step towards your goals for both you and your family.
Good luck!
Respectfully
Randy