I'm not sure what is happening here. I had expected to see some sort of pullback towards the close but instead it finished on the high of the day. Bodes well for next week imo!
I have been wondering about top slicing a few, as nothing ever rises in a straight line. Question is, will it drop enough to make it worth the risk, or will it start heading up again? Add in the complicating factor that the ASX doesn't open until 1am UK time here and it's probably easier for me to do nothing
There was a useful post on the UK BlueShare forum recently on assessing the level of downside risk/the merits of top-slicing etc. It related to another share (coincidentially named Sirius, LSE:SXX), but seems applicable to MOD too so I have copied below for info:
"The oft quoted suggestion to have "no more than 10% of any one share in your portfolio" is I think too simplistic. If you simply do that, you are unlikely to ever make any money. You may as well just put it all in one or more tracker funds, and with less ongoing transactional costs.
The more considered way perhaps of interpreting this advice is to allocate no more than 10% (I would go so far as 15%) of '
downside risk' to any one shareholding. So, as the downside risk to a share/company diminishes you should feel free to hold
more of it proportionately. In the present instance, Sirius'downside risk has diminished whilst the (long term) upside targeted gain remains as incredibly large as ever.
Likewise the "rule" that once a share has doubled in value you should sell half and then let the rest "ride free" I have found is not entirely helpful. In one or two cases where a share has doubled and I sold half, I have found that this leads to a curious sense of detachment which discourages continued close monitoring of its risk profile changes and may lead ultimately to less (or significantly less) profits than you might otherwise have enjoyed if the share drops precipitously without and because your not having kept a close and continous evaluation of its future propects. If it still has future prospects, better to sell a % less than half, say 25%, and that way you still have improved compounding profits and still a keen interest in it but yet also a 'buffer' of the realised profits that allows you a larger unexpected fall before you get to the (worst case) scenario that you just sell and end up breakeven with your original stake.
You might also want to consider these sayings: "Run your winners" and "Be greedy when others are fearful".(!)
My investments are by no means perfect, but I have found that like many proverbs these are actually very true
but only when qualified with the right subclause -- ie. when you have assessed the downside risk vs the upside potential.
"
