Tom, what do you mean by "core trader?"—M. B.
Thomas E Garrity: A core trader buys a large position in a particular stock usually at a time when the stock is outside the purviews of institutions and fellow investors. Because of the stock's obscurity, the trader can buy very substantial amounts of the stock. This is strategically important to the investment outcome because when you have a lot of shares, you can hold onto a core position while selling shares as the stock proceeds upwards in price. In this manner, two primary investment goals are achieved: Selling shares allows you to reduce your loss exposure in any given position as well as break even level (plus the advantage of taking profits), and you retain the bulk of the position for longer term appreciation. Being a core trader eliminates those all too common occurrences brought on by not carving out profits or selling out of a position too early.
Thomas Garrity Small Cap Investment Specialist, Analyst and Editor of Cabot Small-Cap Confidential
Tom Garrity is analyst and editor of the limited-subscription newsletter, Cabot Small-Cap Confidential. A lifelong investor, Tom has been a stockbroker, stock analyst, venture capitalist, and portfolio manager. His long career and varied experiences taught Tom to make investments only when the odds of winning significantly outweigh the risks. He applies this philosophy to every stock he recommends in Cabot Small-Cap Confidential.
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