Sell a stock after 50% gain, but it may rise far higher

The Ticker

November 06, 1998|By Julius Westheimer

WANT TO TAKE a quick profit after the recent rally? " 'You never go broke taking a profit' is the worst advice ever given," says Dick Davis Digest.

"You'll never go broke, but you'll never get rich, either. If you sell stocks after they rise 50 percent, you'll never own ones that go up 500 or 5,000 percent. Don't pull your flowers and water your weeds."

Need more spendable cash? "Good income investments are those that provide more reward than risk," says Income Digest.

The article selects electric utility stocks, Treasury "strips" created by bond houses which separately sell the interest coupons and the 30-year bonds stripped of them and tax-free municipal bonds. "Even lower-bracket investors should like tax-frees because they now yield 90-95 percent of comparable Treasury yields."

"Our X-Ray Indicator just flashed a major buy signal," says Cabot Market Letter. "You ask, 'How can you turn bullish when the world news is so negative?' Answer is, 'A bull market climbs a wall of worries.' Negatives include Japan's yen debacle, Russia's ruble collapse, Brazil's financial woes, etc. But these negatives have been fully discounted. The drop from Dow Jones intraday 9,350 in July to around 7,500 last month discounted lots of bad news."

Pub Date: 11/06/98

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