Colt Telecom Group Plc (COLT)

Company. "COLT is the leading provider of high bandwidth voice, data and advanced telecommunication solutions to business and government customers in Europe. We operate advanced metropolitan area networks in all the major business centres in Europe, linked by our fully owned and managed IP network, the COLT EuroLAN." (company website)

Buy. Colt had been climbing steadily since bottoming out at $2 in early April. At the end of July it broke smartly through the $5.00 barrier, and I bought on the first up day after the shake-out. What's interesting is that I could have waited almost two weeks and still bought at about the same price. Of course, that's easy to say looking back.

In mid-August, COLT jumped to the $6 level and was looking very much like a winner. All the more so at the beginning of September when it reached an intra-day high of $7.49. And therein lies my tale of woe.

Sell. The market has been in a sour mood so far this month, as is often the case historically, and COLT was no exception. After the brilliant leap on 2-Sep it began a steady decline. My hope was renewed again on Friday and again on Monday when it showed signs of recovery. But then the picture turned ugly: the -DI indicator got about the +DI indicator (more sellers than buyers) and the Chaikin oscillator dipped below zero.

I was inclined to think the market might just have 9/11 jitters and hold tight. But when the market brightened this morning but Colt continued its downward slide, I put in a protective stop-limit order at $5.75.

My entire stake in COLT sold at $5.76 which I found interesting, since it was a penny over my limit — not that there's anything wrong with that!

And now to the tale of woe. To help me with my decision-making I keep a spreadsheet of all my buys that looks like this:

The spreadsheet, updated every day after the market close, lets me see where each stock stands at a glance. Each time a stock closes at a new high, an alert price (5% below the highest close to date) and a stop-loss price (8% below) are automatically calculated. The cells turn green, yellow, or red to give visual cues about new highs, watch-outs, or bail-outs.

Alas, I did not take an electronic copy of my spreadsheet with me while traveling over the Labor Day holiday, and I failed to enter COLT's new high close when I got home. If I had done so, the spreadsheet would have alerted me to sell at $6.62 for a net gain of 23% instead of the paltry 6.8% I got by selling at $5.76. In short, this little oversight cost me nearly $1000! Yikes!

The good news is that COLT's price has pulled back only to the 50-day moving average. If it doesn't go below that, there is a good chance for additional gains. Perhaps I'll buy some more if/when the price recovers and the indicators turn around.