Monday, April 4, 2016

Smith & Wesson Lesson

Every once in awhile I like to check up on a stock I used to own.

Smith & Wesson is a company I owned a few years ago and purchased when it was trading at $10.  I sold when after about a year the stock hit $17(June 2014) and I felt it was overvalued.  Coincidentally the market agreed with me and I nailed a top.  Believe me that does not happen very often for myself, and I'm not ashamed one bit. Not to long after the stock was trading around $10 again.


Visit StockCharts.com to see more great charts.At the beginning of 2015 I thought about taking another position. But alas I let it slip my mind and put funds to use in other ideas. As one can see from the chart what a nice investment that would have been. Yesterday the stock was downgraded by not just one, but three separate analysts.  The shares took a huge hit. Yes the shares got away from themselves as evidenced by the chart action. The long term view is completely different until someone invents an entirely new type of firearm.

Either way the whole point of this is to learn from past experiences.  Yes I should have bought when I knew the company was undervalued again at $10. The other key item to point out is that staying invested would have done me just fine too. Though yesterday's move would have put the hurt on.

That's the key to success. Staying the course is sometimes the most widely overlooked piece of investment advice.  Once you find a good company it's best to stick with that stock for the long haul.


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