Apple Inc (AAPL)

[KVW]

I'm not sure I agree with you that my having a goal affected my trade on AAPL.

Of all the stocks I own, I follow AAPL the closest. This "I'm in love with the company" probably has caused me to hold through earnings.

On the other hand, I'm still convince (even after two slightly down days) that AAPL will break $25 soon. The fundamentals are just too good and the overall market is with us. And, we now have a few analysts upgrades (something that people often dismiss but can be a powerful short term stimulus to stock price).

If I had to do it over, I would sell one third before earnings. I had entered the order to do so, but couldn't pull the trigger. But, I wasn't thinking of my eventual goal when I will be able to retire. In fact, I liquidated everything but two stocks to reduce my risk (I felt the two stocks I kept weren't at a good sell point yet - when they are, I will be in cash again). I am still short of my goal, but there comes a time when you make so much money in a few short weeks, that you want to take the profits and start over.

Of course, unlike Linda, I'm not in that much of a hurry to get to my end goal. Linda seems desperate and I worry about her ending up on perpetual margin and getting wiped out. I don't know her trading style, but she did say she received some margin calls a few weeks ago. This means that as her stocks grow, she is buying more, maxing out the margin (or coming close).

As you know from Elliot Wave, stocks, even those that keep going up, tend to retrace around 60% of the gains from time to time. If Linda is highly margined, these retracements can have a devastating affect on the value in her account. The worst thing about margin is that when you start getting margin calls, you have no choice but to sell when things are low. As long as your stocks are rising, no one forces you to sell (and Linda seems to be increasing her leverage). But, when things retrace (as they always do), you are forced to take losses.

Anyway, enough on the evils of margin. If you are going on margin, make sure you aren't maximally margined (that you have a cushion if the stocks retrace their recent gains) or make sure it is a very temporary situation because you think things are surging and you will get out if things retrace.

Kevin