Marathon Digital ($MARA) is running a marathon…and leading by a mile! – December 22, 2023
This is Dan with FITZ IN FIVE. I want to follow up with Marathon ( NASDAQ: MARA ), which I have been doing for a while.
Our first entry on this thing was clear back at 12.10, and since that time the stock has been running higher. It got stopped out on some of the position here; we bought it at 16.17 and had just kept running the stock all the way up.
Just a couple of days ago, on Wednesday, I suggested booking some partial profits, just because we were up about 50 percent on this last trade here, but hanging on to some as well. We are up 10.25 percent just today. From Wednesday we sold at 24.00-25.00, very close to the high end of the day, since that time it is up another 12.4 percent
Were we wrong in selling some, not all, you don’t take it all off the table, but were we wrong in booking some profits down here? I’ll say no because you want to be selling into strength. My feeling has been, over the last several years, that selling the entire amount is, essentially, deciding to pick the top.
You are selling the entire amount saying, “Okay, this is the top right here so I have got to get out.” I find that you wind up leaving money on the table. Because more often than not, the price will just continue to go because that is the way the momentum goes.
My feeling is, as the trade gets more and more mature the way to be booking profits, ultimately, is to be doing it with stops. So the only way you are out of a trade completely is if the stock comes down to below where you think it should be and if the stock is still going to act if you consider it still acting well.
Losses are a different deal, you don’t keep lowering your stops or anything like you would be raising your stops on a stock that is moving higher. On that, you have got to have a stop in place and it has to be resolute. You can’t fart around with this stuff and just hope that the stock is going to come back.
On profits, you want to let the market take you out of your ultimate position, of your last position. The rest of the time all you are doing is, you are booking some gains, which just drops the cost basis in your original trade. Over time you are seeing that you’ve got a monster return on this.
If I just did the math that way, I’m not going to do it in my head here, if we made a 50 percent return on half of our trade, then let’s say we only took half of that position, and that was our complete trade. Then from that point, we subtract the money that we made from our cost basis in the second half of the trade.
And so you didn’t get a 50 percent return, you’ve got way more than that, I don’t know, 75 percent, 80 percent, just by taking part of your profits at a really, really big percentage, and then deducting that amount that you made from your original cost basis. I think this is a great way of trading, hopefully, you do too.
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