Sold 1/2 of the Teva Pharmaceutical (TEVA) position today at $51.95. The Downside Exit was set at $51.86, based upon the low on 12/9/10. I have no desire to let the full position potentially fill the gap created on 12/9/10.
This is a 1.56% gain (includes commissions & fees) for the position purchased 11/1/10 at $51.02.
Fortunately TEVA reported initial results from the two-year Phase III ALLEGRO study, which demonstrated that relapsing-remitting multiple sclerosis (MS) patients treated with 0.6 mg daily oral laquinimod experienced a statistically significant reduction in annualized relapse rate compared to placebo. (http://finance.yahoo.com/news/Teva-Announces-Successful-bw-3125688861.html?x=0&.v=1)
While I’m happy about the gain, this is a perfect example of a lack of discipline (Principle # 2). There should have been a tight Downside Exit along with the purchase of the position in case the price goes differently than expected (Principle # 3). I did not do this in this case and I got away with it. That may be the worst possible outcome because it may make me think I can get away with it in the future. That’s a bad belief system that in the past has lead me to greater losses.