Both Noble Group and Wilmar have touched the 20% loss threshold that I would prescribe as a cut loss point. That would mean taking a hit of S$2,300 and add on to the string of losses. The sale would also free up about S$9,000 for me to play around with.
It is an agonising decision to make because at least 3-4 years back, both companies were the best stocks to have and helped investors make a lot of money during the run up in commodity prices. Noble Group is now faced with a succession issue and hard commodity prices have seen a slump in prices. Wilmar Group also faces a stockpile of crude palm oil and possible backlash over the recent haze furore.
Here is one scenario that stops me from selling: what if when we are in a full blown bull market and commodity stocks make a comeback? That would mean me losing out on a good deal now. the antidote to this thinking would be that if I were to cut loss now, the money could be used for a set of stocks that too could benefit from the upswing.
Then the new question arises: which stock? My colleague commented that I play very safe with money in the food stocks. I guess she is not wrong. Even then, not all food stocks are created the same. I guess I will have to do some research the coming weeks.