President’s Club founder Fabrice Taylor, CFA

Fabrice Taylor, editor of the President’s Club newsletter, shared some smart small-cap selling strategies in the May 26 edition of his influential newsletter. The following is edited slightly to remove company names and for brevity.

“I am constantly reminding investors to TAKE PROFITS. We invest in some riskier names, and we do much better than the average person. But we nonetheless fly close to the sun, and we always will on these riskier names. There is simply no way to make big returns without taking risks. So when you’re up, take profits. ”

“And when you’re up as much as 120% in a month as we were… it’s sheer folly not to sell. Even if you’re up 50% in a month, you should take profits. Even 30%!”

“That’s the same return as you’d get from buying the index for 4 years on average. If you make that in a month take a profit.”

“Remember that your job as an investor in smaller names is to generate cash, not paper gains, not bragging rights, not good feelings. Cash, cash, cash.”

“The riskier a stock – and a small company with no earnings is a risky company – the more imperative it is to take a profit.”

“So on smaller riskier names don’t wait for an email saying sell. If we do that the first people who get it will crush the stock price and the rest of subscribers won’t make a profit. So we won’t do that. Take full or partial profits as you see fit.”

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