Upside/downside – Taking Positions
Dear MM, Thank you for your really excellent service! When you initiate a buy, are you guided by any general rule of thumb with regards to upside/downside - i.e. if the perceived upside/downside is +10%/-10%, you'd say - not worth getting out of bed for. However, if it is +20%/-10%, you'd say 'yes', worth it. What is x and y in +x%/-y% at initiation. Also, what is +x%/-y% when there is an 'Active' indication next to the stock? To make this real, I have been kicking myself that I did not get into GMG and WHC. They are up 67% and 24% respectively. They are still denoted 'Active'. Does this mean that in your view its OK to be buying in at these levels - i.e. the risk/reward still justifies buying (though I note in yesterday's note you are considering taking some profit off GMG). Thanks!