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Strategy Lab is MSN Money's stock-picking challenge. To learn more about the game -- and the contenders -- click here.
Though Strategy Lab isn't meant as a contest, most of us on the panel treat it that way to varying degrees. We want to remain true to our strategies, but we also want to win. That can be a difficult balancing act, especially given the confines of the Lab.
One concession I make to the Lab is timing. I would be inclined to hold certain stocks through a sell-off if I knew my time frame was 12 to 18 months. But the Lab round lasts only six months, so I'm not afforded that luxury.
Take American Eagle Outfitters (AEO, news, msgs), for instance. After Wednesday's close, the company posted weaker-than-expected same-store sales figures and lowered earnings guidance.
Given the strength of the company's management team, the history of consistent growth and solid financials, I would normally ride out the short-term retreat. Not now. I will close my entire position as of today's open, as I don't want to sit on an underperforming asset for any length of time.
Similarly, I'll unload Genentech (DNA, news, msgs) at the open. The overall tone of the market has improved, and the sour mood was one reason for buying the stock in the first place. Additionally, the stock just hasn't managed to sustain any upward momentum. Though valuations are relatively attractive and the pipeline solid, I can't afford to carry a stock going nowhere any longer.
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