Best of two bad choices

[straightflush]

I have spent the past few months reading basic persomal investing books. Nothing too complicated. Most of these books advocated buying index funds until you were sure of stocks to buy, so this became my plan.

Fast forward to about a month ago, my best friend starts telling me about all the stocks he bought. Not me I say, although I certainly can take risk, I just don't know enough to be buying individual stocks. About a week ago, after hearing all the time about his new stock picks and how everything is making awesome returns, I decide to buy a few.

I decided, since it's my last year in school. I have some savings just sitting in money market, why not just buy a few stocks that look decent and who cares if they go up or down. So, I buy HNP, this seems like a sure winner. Everyone knows China isn't going to be stopping growth anthing soon. Next I buy SPKL. This was the biggest mistake as I did minimal research and went off of some advice that wasn't backed my facts. My last pick has been EXM, which I still think will be a good company.

Anyway, if you look at these stocks, all of them have dropped a lot in the past week (since I've owned them.) As of right now I know I'm not going to buy anymore stocks for a long time, if ever. My question is, should I continue to hold on to these stocks despite the huge daily drops, or should I get out before I lose any more money.

[Jimbo]

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My question is, should I continue to hold on to these stocks despite the huge daily drops, or should I get out before I lose any more money.

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why not just buy a few stocks that look decent and who cares if they go up or down.

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Asked and answered within your own post.

Jimbo

[ItalianFX]

If you're not going to care, then why do it at all?

You say you don't care when you really do, and why would you not care when it is your money that you worked for?

Put your money in some index funds or a savings account and do some research. Or, put it into an investment account and do full research and then put your money in. It really isn't whether your research is right or wrong, it's how much time you put into it to know whether you are right or wrong.

[ahnuld]

i think you define the speculator that graham talks about.

you dont seem able to handle the loss, and I think those stocks are overvalued. Id sell and take the hit.

[gonebroke2]

sell them all.

[straightflush]

Ok, I still think I am able to handle the loss. I was just trying to get a feel for what people thought of the specific stocks I picked. I'm still planning on holding for a while, since I feel like that's my best option at this point.

I bought into these companies with the feeling they were going to make money in the long run. I still feel that way and I have no new knowledge that makes me think differently, so I'm not going to sell. Is this a justified way of looking at things?

[ItalianFX]

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I bought into these companies with the feeling they were going to make money in the long run. I still feel that way and I have no new knowledge that makes me think differently, so I'm not going to sell. Is this a justified way of looking at things?

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Didn't you say you didn't really research these? How can you know what new knowledge is if you don't know what old knowledge is?

Otherwise, yes, it is justified, but only if you know.