Pain Trade
Categories: Trading
You lost money. It hurt. You invested at $37 a share, and now the stock is at $23. It's coming up on the one-year anniversary of when you bought it. To defease and realize short-term gains you had during the year, you really should sell soon to realize a short-term tax loss rather than a long-term one. The shorter-term loss is more valuable. You also want to buy their competitor, who simply executed way better and now trades at only a 2x earnings premium. You think it should trade at more like a 10x earnings premium.
So...it's painful. But you make the trade, realize the losses, get reinvested, and hopefully live to fight again.
