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<< Rambus did go up 17 7/16 per share yesterday.
What is your philosophy about selling? I am thinking that I could sell it now and make a nice profit and buy it back when, and if, it drops. Any thoughts? >>

Good question, Arlene.

If you KNOW it's going to drop, you should sell it. But who knows? Think how you would feel if it just kept going up and you missed the further gain. I sold CMGI for a quick $50 gain in January, then watched in horror as it went up $75 per share IN THE NEXT TWO DAYS. If you sell now, you will also be responsible for paying taxes on short-term capital gains, which are treated just like your salary. Plus you pay commissions every time you trade, which adds up.

It really comes down to the question of whether you want to be an investor or a trader. Selling this soon would be trading. It is speculation to buy a stock and hope it goes up in the near term (or sell it and hope it goes down) - many unpredictable factors affect price day-to-day. Unless you want to pay attention on a daily basis, you are better off taking advantage of the upward bias of the stock market, which has historically yielded an average annual return of over 10%. Pick above-average companies and hold them long term, and you will beat that.

Part of the fun of investing, and bulletin boards like this, is putting forward ideas for debate. Arlene, why don't you post a list of stocks for discussion. Rambus is a good start - what else do you like.


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