NEW YORK ( TheStreet) -- For whatever reason, many of us have trouble taking profits. You get into a stock, it runs and then some strange psychology stops you from selling out of fear of leaving money on the table.
Of course, you'll have some stocks that you literally hang onto forever, but I have learned that you really have to let some of the winners go, all the way or in part. If you don't, you risk eating away at some of your gains or, in the worst-case scenario, watching a winner turn into a loser in the blink of an eye.
While I'm no longer long EXPE, way back in March of 2011 over at Seeking Alpha, I suggested hopping into the EXPE January 2013 $20 call options when they traded for about $5.00. The stock ended up nearly 15% at $52.39 in afterhours trading Thursday. At some point, however, you've got to stop pressing your luck. Unless you've really done a ton of homework on the stock and consider it one you'll pass on to your great grandkids, taking profits makes a ton of sense. It's even more difficult to unload a winner if you have a personal connection to it or there's a great story that accompanies the rise. For many investors, Whole Foods Market (WFM - Get Report) could fit both bills, while Sprint (S) represents a great story as a turnaround play. WFM data by YCharts
Sadly, I own Nokia (NOK), not Sprint. If NOK even comes close to popping 70% in three months, I will sell at least a portion of my remaining shares in a heartbeat. It can be difficult to sell a stock that you perceive to be in the middle of a turnaround, but, remember, one quarter does not make a turnaround. And even if it does, it will not last forever, particularly in the competitive space Sprint runs in.
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