The Only Permanence is Impermanence

2,504 views

I sold out of the remainder of my long-term WWE position back in early-March, discussed in this blog post, after my original bull long-term thesis in this post when the stock had an $8-handle back in 2012.

The stock is down a cool 45% this morning, nearly twenty points down from where I sold it (and it is only a $10 stock).

I, of course, had no sense that the stock would subsequently get shellacked to this extent after I sold it.

However, this type of price action is certainly a risk many investors/traders do not consider when their holdings may develop an unsustainably-steep trend (the rubber band snapping back effect).

All in all, there are two lessons worth noting from the WWE long-term investment:

  1. Even for investments, beyond trades, you should be consistently evaluating the original thesis for making your bet, including technicals. Here, the stock worked through an abnormally-steep angle of ascent and garnered a wildly bullish following along the way. Such an angle was simply too steep, abnormal, and, in effect, unhealthy to persist (see my post above where I sold the stock and outlined the technicals/sentiment). 
  2. The only permanence in life is impermanence–You should be willing to part with a long-term investment when you deem it to be objectively correct, regardless of the buy-and-hold-forever philosophy which has caused far more damage than many would care to admit.

14 Responses to “The Only Permanence is Impermanence”

  1. bernie cornfeld

    Copy….paste… Good words of wisdom. Thanks Chess

  2. Chess, you know I’ve watched all of this unfold, with great appreciation. Today’s event just adds to the legend of this trade. Absolutely epic!.

  3. there’s lot of shorts around ( sell volumes ) . makes case for an upcoming insane rally , also .

  4. This was a master class in real-time swing trading. Perfect entry, patience, and exit. Just a beautiful trade – congrats.

    Their dividend is attractive again today after the plunge, but there are a lot of trapped longs who may panic yet. Are you stalking another entry in this name any time soon?

    • Thank you, Burg. Much appreciated…I will let the dust settle into Memorial Day on this one most likely and take a look at it into the summer months. It has just seen a huge run-up and trapped many people. Best to let the mess sort itself out first.

  5. […] chess, “The only permanence in life is impermanence–You should be willing to part with a long-term investment when you deem it to be objectively correct, regardless of the buy-and-hold-forever philosophy which has caused far more damage than many would care to admit.”  (chessNwine) […]

  6. Well, buy and hold forever has worked for me. But then again ive been buying monthly and holding index funds for a long time and ive done just fine. Turn the markets into your own mini vegas and you will realize the house always wins.

  7. Is this what they mean by buy the dip?

Comments are closed.
Previous Posts by chessNwine

The Only Permanence is Impermanence

2,504 views

I sold out of the remainder of my long-term WWE position back in early-March, discussed in this blog post, after my original bull long-term thesis in this post when the stock had an $8-handle back in 2012.

The stock is down a cool 45% this morning, nearly twenty points down from where I sold it (and it is only a $10 stock).

I, of course, had no sense that the stock would subsequently get shellacked to this extent after I sold it.

However, this type of price action is certainly a risk many investors/traders do not consider when their holdings may develop an unsustainably-steep trend (the rubber band snapping back effect).

All in all, there are two lessons worth noting from the WWE long-term investment:

  1. Even for investments, beyond trades, you should be consistently evaluating the original thesis for making your bet, including technicals. Here, the stock worked through an abnormally-steep angle of ascent and garnered a wildly bullish following along the way. Such an angle was simply too steep, abnormal, and, in effect, unhealthy to persist (see my post above where I sold the stock and outlined the technicals/sentiment). 
  2. The only permanence in life is impermanence–You should be willing to part with a long-term investment when you deem it to be objectively correct, regardless of the buy-and-hold-forever philosophy which has caused far more damage than many would care to admit.

14 Responses to “The Only Permanence is Impermanence”

  1. bernie cornfeld

    Copy….paste… Good words of wisdom. Thanks Chess

  2. Chess, you know I’ve watched all of this unfold, with great appreciation. Today’s event just adds to the legend of this trade. Absolutely epic!.

  3. there’s lot of shorts around ( sell volumes ) . makes case for an upcoming insane rally , also .

  4. This was a master class in real-time swing trading. Perfect entry, patience, and exit. Just a beautiful trade – congrats.

    Their dividend is attractive again today after the plunge, but there are a lot of trapped longs who may panic yet. Are you stalking another entry in this name any time soon?

    • Thank you, Burg. Much appreciated…I will let the dust settle into Memorial Day on this one most likely and take a look at it into the summer months. It has just seen a huge run-up and trapped many people. Best to let the mess sort itself out first.

  5. […] chess, “The only permanence in life is impermanence–You should be willing to part with a long-term investment when you deem it to be objectively correct, regardless of the buy-and-hold-forever philosophy which has caused far more damage than many would care to admit.”  (chessNwine) […]

  6. Well, buy and hold forever has worked for me. But then again ive been buying monthly and holding index funds for a long time and ive done just fine. Turn the markets into your own mini vegas and you will realize the house always wins.

  7. Is this what they mean by buy the dip?

Comments are closed.