More Feedback June 30, 1997February 3, 2017 INVESTING 102 “I found your Investing 101 article interesting. My questions is: Once I have bought a stock, how do I place an automatic sell at a certain price?” Regards, K4Group It’s called a LIMIT order (if the stock’s now $30 and you want to get at least $40 for it) or a STOP-LOSS order (if it’s $30 and you want to sell if it ever trades at $20). In the first example, you instruct your broker to “sell at $40 or better,” either “for the day,” if you’re crazy enough to think it might actually jump to 40 by the close of trading that day, or “good-til-canceled,” if you just want to put the order in and forget about it. Long after you forgot all about this, your phone might ring with word that “you sold 200 WHATEVER at 40.” (And two days later you might then read in the paper that someone had announced an offer to acquire WHATEVER at $56, which could explain why it had been inching up to 40 on swirling rumors. Oops.) In the second example, you instruct your broker to “place a stop-loss at $20.” The instant it trades there, he then places an order to sell your shares — “at the market” — which might mean that you get $20, but quite possibly a bit less. (If a stock has been falling and you put in a sell order, you’re certainly not going to push the stock up.) If you own a lot of stock in a thinly traded issue, this makes little sense, because your sell order — 5,000 shares in a little over-the-counter stock that’s falling and often trades only 2,000 shares all day — could be executed at “distress” prices, with the market makers taking advantage of you. PEROT — PEROT! — THAT’S HIS NAME! I dissed what’s-his-name a little recently (not yet having heard that giant sucking sound he had predicted with such certainty), and several of you made some good points in return. Jim Strickland: “I didn’t vote for Ross Perot but I did agree with a lot he said. I believe someone like him airing the ‘common man’ concerns helps prod the established politicians. I think Clinton has acted as Republican as he has because of people like Perot and Gingrich.” This is undoubtedly true. But bear in mind that long before Perot or Gingrich surfaced, then Governor Clinton was co-founding and helping to lead the Democratic Leadership Council (DLC), a group of progressive democrats who were already criticized by the left-wing of the party as being too “Republican.” Indeed, it may be the discipline of the bond market, and Clinton’s appreciation of the need to appease it if the economy and jobs were ever to get growing again, that prodded him more than Perot or Gingrich. Ronnie Pickus: “Since 1992, we have all come to realize the disaster that might have been if ‘what was his name?’ had actually been elected. To his credit, however, he should be remembered as a catalyst for changing SOME of the ‘politics as usual’ that preceded the 1992 elections. Since that time, some politicians have (hopefully) realized that there exists a LARGE body of disenfranchised people who, if they were to actually vote, might actually elect someone like what’s his name. After that, there would be real changes. (Nothing would get done, of course, with all the vetoes, filibusters, etc., but there would be changes — which might be fun to watch if it didn’t have the serious implications that it does.) Well, there’s always the year 2000.” Tomorrow: Important Definitions