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When to cut losses?

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

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Question asked

When to cut losses?

James,

I think I may have potentially purchased some of the most underperforming stocks on the ASX200. Having lost 10% paper profit in just the last fortnight, could you please provide some words of advice/wisdom. I certainly intend to hold & possibly add to some positions whilst looking to add BHP, MFG, & BOQ to my Portfolio i.e. Air New Zealand, Beach Energy Limited, Insurance Australia Group, Lendlease Group, Pointsbet Holdings, Scentre Gr, Tesserent Limited, Westpac Banking Corp, Westgold Resources & Woodside Petroleum,

With sincere thanks

Bernie

Answer

Hi Bernie,

The last month was also a tough one for  some of MM’s holdings with the likes of Energy & Financials declining by 9.45% & 7.56% respectively, but we believe the aggressive stock and sector rotation will be ongoing into 2022 as well as a hopeful assault on fresh highs. Hence if we are correct a number of stocks in both of our portfolios will provide more optimum exit opportunities.

However I can see you are holding a number of stocks that MM has indeed bought and then sold, remember if the reason for the trade (purchase) has gone then its usually best to sell.

We like and hold BHP, MFG, BOQ & PBH, we don’t own the others. Tesserent (TNT) is interesting at current levels and as a speccy  play we believe it has some potential. We are bullish on Oil with Santos our preferred exposure however we also like WPL, Scentre Group (SCG) we’re 50/50 on and we hold CBA rather than Westpac. We sold out of BPT, LLC & IAG – BPT a long time ago.

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Westpac Bank (WBC)
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