DT – I wish you great prosperity in your path forward, and yes if the opportunities do present themselves, then there is nothing worse than not having the funds to deploy.

My typical experience, was that I had already blow much of my wad when crazy pullbacks reached ridiculous levels, and had to throw a smaller amount of funds at an opportunity than I wanted to, or I’d need to sell something I liked and believed still had potential, for something I liked more and thought may have more or a different kind of potential.

However, once one has a solid allocation in the sectors they think will do well, and then experiences big percentage gains in a certain area or areas of one’s portfolio, then it is a nice strategy to trim off part of the winnings (10%-30%) and move them over to the sidelines for opportunistic events.

Historically, I’ve been good at trimming winnings, but then usually felt in a rush to reinvest them, only keeping 2% – 8% funds available on the side. This cost me a few different times, and I told myself, when going through the pandemic correction last spring, that the next time I have nice swing-trade returns and trim the winnings, that I’m going to move more profits over to the sidelines and not immediately redeploy them. I started growing that pool of sideline money last summer, as the PM mining stocks were starting to get frothy. Next I added to that pool with some of the profitable swing trades as they presented themselves for the balance of the year, as well as storing some in more royalty companies. In addition, I kept the remaining tax loss sales transacted in Nov & Dec mostly to the side without reinvesting them.

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Even though I had done better, there was a voice of concern in the back of my mind, that maybe I was still too exposed to the resource stocks in my trading account, and that while I was feeling good for having tripled and almost quadrupled my account value coming out of the mid-March sector lows, I felt like it would be a shame to see those returns erased if there was some crazy geopolitical or economic event that crashed all the markets.

I woke up late on the 4th of January, after a bad night of sleep, and tossed and turned at night and in the morning about potentially taking on more risk than I was comfortable with. I rolled out of bed and just decided, “today I’m going through and trimming the fat.” My biggest criteria was if I had multi-baggers in names, even if I really liked them, then I made a handwritten list to the side. I then went through and quickly glanced at a 5 year, 2 year, 1 year, and 6 month chart, and if it seemed pretty overbought, I trimmed. Next I went through companies that were flat and had been and reviewed their websites for any news or catalysts that may move the needle, and if it was too stagnant trimmed a bit of those back as well and reduced the position sizes slightly.

Now, I did find a few positions I wanted to add to, so I did spend some of those funds and rebalanced the weightings inside my portfolio, but a lot of it, I moved to the sidelines.

I popped on the KER on Jan 4th and posted this:

>> On January 4, 2021 at 11:34 am, Excelsior says:

“I pulled profits in about a dozen Gold & Silver positions this morning, just for the short term. My account has been ratcheting higher and higher, and I didn’t sleep well last night as a result. I raised tens of thousands of dollars today and am going to go take a nap. 🙂”

“This is just a short term move to raise some funds, and I’ll likely buy most of those positions back if we see a dip later in the week.”

[update: I still haven’t purchased all those positions back yet, but did add to a half dozen of them over the last week]

Next on the 6th in a discussion with David I mentioned:

> On January 6, 2021 at 3:38 am, Excelsior says:

“Regardless, if you’ve had been runs in certain miners, there is nothing wrong with taking a few profitable chips off the table in such uncertain times. I did the same in stocks I felt were getting a bit too far ahead of themselves, but left most of the core positions on to ride higher if the metals keep breaking out, and if the US dollar keeps weakening.”

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Even after all that trimming in 2020 and 2021, I still have the largest allocation to the resource stocks that I’ve ever had in all my years trading, but this time as we sail into unknown and turbulent waters, I’ve still got 12% of funds on the sidelines (and had 18%, but did deploy the first 1/3 of the sideline pool over the last 2 weeks).

I still have dry powder stored to the side, but the lighter is in my pocket and not in my hand at present. I’m waiting for a breakout or breakdown before doing too much more, but will still swing trade an individual stock or start a position if a new company pops on my radar.

You said it best: “When the panic hits this time I will be waiting.”

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