The Price Of Cowardice

I wanted to share two related experiences last week. They do not reflect well on me, but if nothing else, I am known for being open and honest, so we might as well continue that tradition.

Let’s begin with this beauty:

I came into the day short HPQ. I want to say at the outset this was a rational decision. In fact, the chart was pretty damn gorgeous. However, between sessions, rumors flew around that XRX wanted to buy HPQ, so the stock exploded higher.

I was, of course, unhappy about this. The stock was up about 14%, and it was utterly unclear if there was a deal, what the price would be, and so forth. In pre-marketing trading, the stock kept lunging higher, and – – – simply stated – – I wanted the pain to stop, so I decided to GTFO out of HPQ ASAP. I wanted nothing to do with it anymore. So I covered at about the spot where that arrow is drawn.

You can probably guess what happened next. Within moments of my covering in a panic, the stock started slipping lower, and it never stopped falling. And it’s not because the rumors were denied. In fact, XRX made it quite clear they had made the offer, and HPQ said they were considering it. But I covered at just about the worst price of the day. It went on to keep sinking on Thursday and Friday, in spite of the market vomiting to lifetime highs.

So that sucked.

Since God figured I hadn’t been mentally beaten quite yet, it was time for more fun. After Thursday’s close, Stamps.com (STMP) came out with earnings, and – – yep – – it exploded higher and – – yep – – I was short. Sounds like I must have broken a mirror recently, doesn’t it?

With the memory of HPQ fresh in my head, and my anger at myself for being a completely limp-wristed ghey-boy and covering, I kept telling myself: don’t do it again, don’t do it again, don’t do it again. But I kept having visions of a 18% pop becoming 20%, 30%, 50%, God knows what. Thus, I did something I hardly ever do, which is entered an after-hours order and got out where the arrow is. Again, to stop the pain.

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