Three simple rules for investing in MannKind or any stock.
1. Do research and due diligence on investment. Know as much as you can about product, management team, past experience and commitment to bring product to market. Study all the detail going back as far as you can the information on MannKind it is there In this case you have history of Founder and the fact he kept putting cash back into the company. Listen to past shareholder meetings and read annual reports. Who else is invested in the stock? What institutional investors are in it.
2. Invest what your comfort level might be. How long can you be? What happens it you lose your investment? Can you deal with the gyrations of ups and downs. Do you understand what it says in a company prospectus statement. If you lose your investment can you sleep at night ? If you can't deal with the + or - then stick with blue chips or ETF funds.
Buy shares on momentum but up and down as long as you know why it's moving in either direction.
3. Plan your exit plan from a stock. Is this something you want to hold long term or short term. When I invested in MannKind my view was it was a minimum of a 36 month investment as I saw and reviewed their history and thought the risk/ reward was inline with a long term hold.
I have lost a few that I should have gotten out of and won on many that should have been losers. I have ridden many stocks down to the single digits only to see them rise up to the three digit numbers. My horizon is not one year or five years but over 10 to 30 years. Look at the history of the Dow over the last 50 years and in 5 year segments. Quality investments have gyrations but do deliver long term. I have watched investors who are in their 80's and 90's who still invest and stick to these rules.
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