I have a stock, Mechel (MTL), which is a Russian mining company. This morning, I checked the quote, only to see it down 18%. I immediately went to look for news to determine the reason for the severe drop. After going to Yahoo, I discovered a news story that stated the Russian Prime Minister reprimanded the company for selling steel prices for double the amount in Russia than in other international markets. Prime Minister Putin said a probe would be opened to investigate the claims of excessive price hikes. Posts on message boards seem to indicate that this could be a death sentence to MTL considering what Putin has done to other companies in Russia that he has aggressively gone after in the past.
After trying to digest the news, I waited as I struggled with selling my position. I thought maybe this is a temporary situation. I didn't want to realize an 18% loss. I was unwilling to part with this company, but internally I knew that I had to. Now the stock was down 20% to $28.42. I had to do something. Finally, I put in a order to sell my entire position. This was an agonizing trade to execute. Even as I write this post, I can still feel the anxiety. But, this was the right thing to do.
Investing in the stock market can be rewarding, however, sometimes one has to make tough decisions. There are times you will have to admit you were wrong about a particular company. Other times, external circumstances will cause you to sell your position. This is not easy, however, its an necessary part of managing your online trading account.
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