Wednesday, March 14, 2012

Another Bite Of Commerzbank AG (CBK.DE)




I took another small bite of Commerzbank AG (CBK.DE) on Monday, adding another 2,000 shares at €1.81 to the 2,000 I bought at €1.77 on March 7. In my notes for the Monday buy I scribbled, "Buying another 2,000 shares because this is the bottom!" Of course, soon after I clicked, Commerzbank dipped to just below €1.79 and I had to think of what The Renewable Man had said about my initial decision to get into Germany's second-biggest bank.

"Well, it's your money, Herr Bic. I don't like it, but if I were you I'd set a tight stop, maybe around €1.70. If you get stopped out, wait for it hit €1.35 or so and then start buying or wait until it climbs back above €2, whichever comes first."

He and I were talking last Thursday afternoon, shortly after the US market had opened. He told me the low-risk trade of the day was JinkoSolar Holding Co., Ltd. (NYSE: JKS), that I could make some real money on Jinko because "this pattern is played so often it's embarrassing. There's a very good chance we'll see it shoot right back up." I told The Renewable Man it was too risky in my opinion, and pulling up the chart of Jinko I said that it was moving back down.

"I know, and now I'm going to buy, and you should too," said The Renewable Man, hanging up.

I couldn't get myself to pull the trigger on Jinko as the share price bounced up and down. I passed. What happened? Well, Jinko is up somewhere around 20% since then, and that really pisses me off. What troubles me even more than that missed opportunity, is that I think my second Commerzbank buy was partly an anger buy, to prove to The Renewable Man that my thinking on Commerzbank is correct.

As of now, Commerzbank is trading at €1.95, meaning I'm up a good chunk of euro, 600 or so, whereas The Renewable Man is up thousands or likely tens of thousands, knowing him.

I made the amateur mistake of letting emotion kick me into a trade. I didn't pull the trigger on Jinko because I was unsure, and that is okay, but then hindsight got the best of me, and hindsight is always perfect, isn't it?

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