Retailer NXT (Next) dropped 4.1% to 4779p at around 10am today. Its earnings release is tomorrow. The market is clearly expecting bad news. The market could be wrong, of course.
Its Stockopedia stock rank was the lowest in my portfolio. NXT had released some disappointing trading statements. Thanks to Stockopedia’s excellent webcast on profit warnings, I learned that the best strategy for dealing with big gap downs on bad statements is to sell. Take your losses, and move on. It’s not infallible of course, no strategy ever is, but statistically it is the better decision. If I had sold out on 24 March 2016, straight after the disappointing statement, I could have sold at around 5655p. That is far better than the price I realised of 4933p. Not to mention the fact that I was holding onto dead weight all that time.
It is a share that I am interested in watching right now, as I disposed of it late last year: 29 December, to be exact. I had decided that it was a sell candidate. Normally, I would have been patient and waited until the new year, but I realised that the timing may be more critical.
I was scanning the internet to see what kind of xmas the retailers had. I could not find much, actually, but there was a lot of mentions about how well online retailers were doing.
Sometimes you just get into situations where time is of the essence and you have to decide to pull the trigger, or not pull the trigger, and bear the consequences accordingly.
NXT could still do very well, so I will update my blog tomorrow with the result. Let us see.
Oh, and a happy new year to you all. And as ever, stay safe out there.