Harvest Health and Recreation Inc (HARV)

[JohnCM]

“The Reddit Hangover”

Mark this date down on your calendar, February 10th, 2021. This date marks the “blow off top”, the exuberant top”, the “frenzied froth”, the “bubble before bursting.” Typically, if you are participating in this type of upward move in your portfolio, you are drunk with greed. You are envisioning that trip to Rarotonga Island. The last thing you are going to do is sell! Are you crazy!? Why would I sell when my stocks are doing so well? I am a financial genius!

Well, this is exactly the time to sell. But, I am a big fan of “leveraging” in and out. Typically, I do not take 100% of the monies allocated to buy a stock or my entire position in a stock, and buy or sell it. Maybe 33 percent, depending? Maybe more, maybe less. If you are a frozen statue when the time is right to sell RSI 80 or buy RSI 20, take 10 or 20 percent and trade around your position. Get a feel for it.
Back to the “Reddit Rush.” When momentum, fan boys, greedy bastards, pump and dumpers control the market, they will push it north as hard and fast as they can.

What does this action have to do with each individual company’s prospects or the long term view of the sector of interest? Nothing. So, you react to what “the market is telling you.” On February 10th the market was telling you to sell 50% of your position, give or take. Trade around a core position. If your stock continued to spike, no worries, you still have your 50%. But if the bubble pops, you are not riding 100 percent of your position all the way back down. Poof! There goes your trip to Rarotonga.