Should I sell this position?
 

I own a couple hundred shares of EXC. I acquired it a while back in Jan of 2004 when it was $33 a share, since then it has had a 2:1 split (at $61 a share) and the current share price is just over $73. I sold about 1/5-1/4 of my position back in last June so I've already gotten back about half of my investment.

I'm going to graduate school next fall and it will cost about 20k to finish my masters. Currently I could sell the rest of this stock and have school paid for. Or I was thinking that I could take out bank loans (can I do that?) and keep my position until I have to start paying back the loans ~2 years.

Our household income during this time (with me not working) will not be able to cover school + living expenses so paying monthly isn't an option and I doubt with this type of investment that I will get any type of student loans. Which is why I was thinking that I should either sell the stock and pay for school completely or take out as many loans as possible and keep as much of the stock for as long as possible.

Sorry if I ramble....I'm very confused [img]/images/graemlins/confused.gif[/img]

Re: Should I sell this position?
 

I am not an expert in investing but if the stock has gained so much and you will probably need the money soon, why not sell it while you're way ahead on your initial investment? You can then pat yourself on the back knowing you made a great deal. Why risk a sudden fall?

Re: Should I sell this position?
 

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I am not an expert in investing but if the stock has gained so much and you will probably need the money soon, why not sell it while you're way ahead on your initial investment? You can then pat yourself on the back knowing you made a great deal. Why risk a sudden fall?

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That's true and that's part of the reason that I'm leaning towards sell, but then again I'm having a hard time justifying the sell because they have done EXTREMELY well for the last 4 years + the dividends are great. I'm also wondering because they might have another split soon.

Re: Should I sell this position?
 

What will the split do for you?

Re: Should I sell this position?
 

Personally I'd get rid of this ASAP just b/c it doesn't look like a very attractive investment @ current prices. You should still try to get gov't loans @ 4-5% to pay for grad school if you can though.

I dont know much about the company to be honest but
P/E is kind of high
growth aspects don't look great
high dividend/ payout rate also confirms they don't have a good/efficient use for the earnings...

"large" dividend isn't necessarily a good thing

Re: Should I sell this position?
 

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Personally I'd get rid of this ASAP just b/c it doesn't look like a very attractive investment @ current prices. You should still try to get gov't loans @ 4-5% to pay for grad school if you can though.

I dont know much about the company to be honest but
P/E is kind of high
growth aspects don't look great
high dividend/ payout rate also confirms they don't have a good/efficient use for the earnings...

"large" dividend isn't necessarily a good thing

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This is the type of info I was looking for, I know very little about stocks and am unsure of when it would be best to sell.

So if I do sell, and manage to get the student loans what would be the best way to invest the 20k until I have to start paying the loans back?

Re: Should I sell this position?
 

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What will the split do for you?

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more shares = more dividend payout

Re: Should I sell this position?
 

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I'm going to graduate school next fall and it will cost about 20k to finish my masters. Currently I could sell the rest of this stock and have school paid for. Or I was thinking that I could take out bank loans (can I do that?) and keep my position until I have to start paying back the loans ~2 years.


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Spoken like someone who's never seen the stock market go down.

Do not take out loans and assume you will be able to use investment $$ to pay them off when they come down. Bad, bad idea. If you are insistent, at least sell and dump the $$ in an S&P Index Fund or something a little more stable. Even then, though..not completely safe if you're banking on using that money to pay off loans, but it's safer then leaving it all in one stock.

Re: Should I sell this position?
 

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I'm going to graduate school next fall and it will cost about 20k to finish my masters. Currently I could sell the rest of this stock and have school paid for. Or I was thinking that I could take out bank loans (can I do that?) and keep my position until I have to start paying back the loans ~2 years.


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Spoken like someone who's never seen the stock market go down.

Do not take out loans and assume you will be able to use investment $$ to pay them off when they come down. Bad, bad idea. If you are insistent, at least sell and dump the $$ in an S&P Index Fund or something a little more stable. Even then, though..not completely safe if you're banking on using that money to pay off loans, but it's safer then leaving it all in one stock.

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Yeah, I'm young and naive sometimes...I think I'm going to take your guys advice and sell it off. I'll only take the loans if I can get them at less a 5% interest rate. I'll probably throw the $ into a savings account till I need it, unless I know for sure I won't need it for the 2 years then I like the idea of the S&P Index Fund or a CD.

Re: Should I sell this position?
 

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more shares = more dividend payout

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Ummm, I hope you are joking with this statement. The same dividend pie is being passed out, but instead of getting 1 piece, you get 2 pieces that were half the size of your original piece. This will sound harsh, but if you truly thought that you will get a larger dividend payout after the split, sell this stock tomorrow. You have a lot to learn about investing and got reall lucky with this one.

Anyway, I think you should sell. Student loans rates are at 6.8% now, mandated by recent law changes. I believe that being debt free is better than hoping the stock continues the upward trend.

Re: Should I sell this position?
 

http://img243.imageshack.us/img243/7...c042007ei8.jpg

Re: Should I sell this position?
 

Sell. You are concentrating risk unnecessarily.

Re: Should I sell this position?
 

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Sell. You are concentrating risk unnecessarily.

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gull, can you quantify his risk?

Re: Should I sell this position?
 

Instead of selling, why don't you just use a trailing stop as an exit. The stock is clearly in an uptrend so let your profits run.

You can insert trailing stops behind recent levels of support or a multiple of the average true range.

Re: Should I sell this position?
 

jz,

There is an objective/subjective conflict here.

Objectively:
The stock is in a huge uptrend, in a a recently uptrending industry- nuclear. EXC is the nation's leading nuclear plant operator. You have huge gains. Selling now requires that you judge how high it can go. Since you cannot know, you are best served by riding the trend. That means holding until the trend changes. Price is quite aways away from ANY kind of reverse of the long-term trend in this stock.

Subjective:
You describe your situation. Looking at this in isolation, it is easy to rationalize selling for a long list of good, subjective reasons.

It's not all of nothing. It's not hold-all or sell-all.

One way to ride the trend is to simply institute a plan to sell off x% every y weeks or months. For example sell 25% of the current position every 6 weeks.

In theory you can never be totally out the the stock with this approach.This allows you to meet both of your goals-- funding current expenses and continuing to participate in the uptrend.

EXC is really trending very strong recently.

Re: Should I sell this position?
 

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What will the split do for you?

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more shares = more dividend payout

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How so?

Re: Should I sell this position?
 

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What will the split do for you?

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more shares = more dividend payout

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How so?

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Hmm...looks like I was wrong about this one. No worries, thanks for explaining that one Big.

Re: Should I sell this position?
 

[ QUOTE ]
jz,

There is an objective/subjective conflict here.

Objectively:
The stock is in a huge uptrend, in a a recently uptrending industry- nuclear. EXC is the nation's leading nuclear plant operator. You have huge gains. Selling now requires that you judge how high it can go. Since you cannot know, you are best served by riding the trend. That means holding until the trend changes. Price is quite aways away from ANY kind of reverse of the long-term trend in this stock.

Subjective:
You describe your situation. Looking at this in isolation, it is easy to rationalize selling for a long list of good, subjective reasons.

It's not all of nothing. It's not hold-all or sell-all.

One way to ride the trend is to simply institute a plan to sell off x% every y weeks or months. For example sell 25% of the current position every 6 weeks.

In theory you can never be totally out the the stock with this approach.This allows you to meet both of your goals-- funding current expenses and continuing to participate in the uptrend.

EXC is really trending very strong recently.

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Another great post and maybe a really good idea in there. I like the idea of selling off this stock in maybe 20-25% chunks every couple of weeks and then reinvesting it into a S&P Index Fund thus diversifying my holdings. Maybe in the end I could hold on to the last 10-25% since I don't believe that this stock is done growing.

Re: Should I sell this position?
 

Yes.

You might decide to sell 20% of the current position now, subjectively, because you need the cash and EXC just hit an all-time high, etc.

....then 20% of the (new smaller) current position either periodically, or when you know you need it. Look at your calendar and check for the key expense-events over the next year.

This stock has a beautiful chart, and price/volume action !

From my point of view, EXC's price action seems to be saying (in part) that running nuclear power plants is a growing and profitable business ... and that maybe very few people recognize the huge potential for huge growth right now.

Competitors can't just show up and tout expertise in this area. EXC has a kind of leadership lock here.

And suddenly, high-profile Green people LOVE nukes. And EXC? There is also a connection with Barack Obama here...they are IL-based and back Obama for President. These nuke and political details are somewhat off-topic but might help explain the run-up in EXC in part.




See also:
http://www.ecolo.org/media/articles/...p-24-05-04.htm

Bio:
http://en.wikipedia.org/wiki/James_Lovelock

Re: Should I sell this position?
 

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) Sorry if I ramble....I'm very confused [img]/images/graemlins/confused.gif[/img]

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Let me get this straight: You make 400% on your money in the stock market and you're confused? Yeeeesh.

Re: Should I sell this position?
 

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) Sorry if I ramble....I'm very confused [img]/images/graemlins/confused.gif[/img]

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Let me get this straight: You make 400% on your money in the stock market and you're confused? Yeeeesh.

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lol yeah i know I'm in quite the predicament. Anyways, I 'm selling 33% of my holdings tomorrow since it hit another all time high today. I will sell the remaining 67% over the next 2 months. Thanks for the advice guys, you all have been most helpful.

Re: Should I sell this position?
 

EPS is only growing at 10% per year (last 10 years) while your stock is growing at ~29% per year since 2002. I would consider it overvalued at the current time (cursory look). Set a trailing stop and enjoy your gains.

Re: Should I sell this position?
 

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EPS is only growing at 10% per year (last 10 years) while your stock is growing at ~29% per year since 2002. I would consider it overvalued at the current time (cursory look). Set a trailing stop and enjoy your gains.

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That's what I'm going to do with the other 67%. I have the trailing stop at $70 a share currently. But I'm hoping that I won't need it [img]/images/graemlins/wink.gif[/img]