Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Buy and Hold or Fold?

If it were only that easy. Buy and hold until retirement. Not if you bought Nortel (NT.TO) when it was at C$124.50. The rebound from the low of 67 cents to $4-5 won't be paying for too many rounds of golf if you bought at the peak.

I don't watch TV at home but I was out at Calgary's new "Home of the Blues", The Shamrock Hotel. Does every city have a "Home of the Blues"?, our old one was condemned last week. The CBC had a long feature on Nortel, they were interviewing consultants and academics from business schools. Fortunately the sound was off. I'm sure everyone is up on the gory details. If not head over to the water cooler and say "How about that Nortel?" and you'll be up to speed in no time.

In my opinion what matters is this:
Nortel announced terrible news and the stock price didn't plummet. Could things get worse? Probably not (unless you work for them).

The Nortel chart has a double bottom pattern (like Southern Cross Resources). Technical analysis would tell you sell if the price goes below the bottom of the "W". The price could still go lower so make sure you have an exit strategy. You can never be to careful out there.

I have been lax on my ass covering.