HELP..HELP….I Bought Office Depot – Do Not Know What to Do
I thought to share this story. I had an urgent call looking for advice on his purchase of Office Depot Stock. I explained him I am not a Jim Cramer, rather I teach people how to trade. I explained I was in the markets since 1994 and that one needs a trading plan. This man was frantic. He purchased $300,000 worth of Office Depot as he thought it was cheap and could only go higher. He gave me all the fundamental reasons however he had no exit plan or concept of risk. He bought the stock twice. Once lower than the second. He simply did not know what to do.
I explained him…that he should only buy when the stock market is healthy ( which it is not) and discussed with him how he could determine this. Next he should try to buy the strongest stocks in the strongest sectors. This was very foreign to him.
The worst thing happened to this gentleman. Office Depot stock rebounded and he was rewarded without having a trading plan or following one. He had no sense of risk management. This will only reinforce his reckless investing.
Trade with a plan. Know when to exit with a profit or loss.