Did You Bank 265% On Our Free Recommendation?
If youre new to our website, then I must let you know you missed an epic stock pick in February. Sorry about that. But trust me when I say weve got more where that came from.
The best part about this one
It was free. Yep, thats right, no charge.
Every so often, we write up a sector or a market condition that we feel is ripe for trading. And seven weeks ago, it was the shipping industry. More specifically, I recommended a Greek shipping company, NewLead Holdings (NEWL).
Let me show you how this trade made over 265% in just seven weeks
Back near the end of February, the EuroZone finally reached a sovereign debt deal to save Greece. Bond holders took a massive haircut, etc etc If you want to read the article, check it out here.
Basically, I called out one of the Greek shipping companies that had been leveled by the social and economic upheaval experienced in Greece. In addition, the valuations on NEWL looked compelling.
I recommended the stock when it was trading at $1.42. After holding shares for roughly seven weeks, NEWL nearly tripled in value!
Take a look at the chart below
As you can see, shares eclipsed the $5.20 mark on 4/11/12 giving investors a 265% gain from the date of my trade recommendation.
Sure, you could have called that trade a whopping loser if you looked at it in early March. Back then, shares retested the $0.50 support level (underlined in blue above). It was down some 65%!
And that brings me to an important point
If youre buying a volatile penny stock for a mid-long term return, then you should be comfortable with your account balance fluctuating in the process.
That was exactly the case with this trade.
Trust me when I say it wasnt easy when I checked my account and saw the damage shares of NEWL had done. But it was only a paper loss.
Nothing had been truly lost and the battle was far from over.
Timing a trade like this within a day or two would be nearly impossible, so some downside was to be expected. Really, if someone tells you they could have timed this trade that close, feel free to laugh in their face. And then ask to see their crystal ball
After we published the article, I picked up some shares locking in a $1.40 price.
And when I saw the massive price spike on Wednesday last week, I put in my limit order at $5.00. Once it hit, I had locked in some sweet gains!
Am I a psychic? Nope
A genius? Well, Id like to think so, but my wife would argue otherwise.
No what I did was identify a trade with great potential.
More importantly, I executed and locked in a profit! I only did so when I felt shares were being traded at a premium. While some investors may have jumped ship after the collapse in March, those who held on were clearly rewarded.
Of course, Ive already been asked
If you held your shares when theyd lost so much, why didnt you keep holding NEWL for even bigger gains? Why not hold longer?
Well, theres an old saying that youve probably heard Bulls make money, Bears make money, but pigs get slaughtered!
Any trading pro knows you dont see 250% gains over a seven-week period very often at least not the ones telling you the truth.
Listen there are plenty of triple-digit returns out there happening all the time. The trick is to lock in your profits when you can and move on to the next trade.
This way, you wont be the guy saying, I woulda, shoulda, coulda to your buddies.
Editors Note: If youd like to see triple digit returns in your portfolio, our in-house penny stock guru, Gordon Lewis, has picked over a dozen straight winners! Discover his secret to picking winning penny stocks
Until next time,
Brian Walker
Category: Investing in Penny Stocks
