John, there is no simple answer. Everything is odds/probabilities. When we buy fundamentally sound companies over fundamentally weak…fundamentally cheap over fundamentally expensive, we better our odds of success. But, with any one stock, we never know which will be our loser or gainer.
For instance, in your CHL example…you made money there when we did not. Yet in other examples, we made more for holding on longer. It can go either way and ahead of time, you’ll never know. All we know is that we’ve got a great statistical edge that shows up over long periods of time because of how picky we are in what we invest in and how we invest in them. I wish I had a better answer for you, but that’s really it.
Only if something is very fundamentally sound and has retraced a significant percentage from where you sold it and its at/near major moving averages, etc. would it be worth re-entries.
If the stock becomes fundamentally weak or carries increased risks, then we would not do re-entries (RIG, USO, LPL, as examples).
But if you keep hitting singles and not worrying about home runs, you’ll build a great portfolio over time. Swinging for the fences is what gets people in trouble. Also, the biggest thing is your entries and making all averaging downs that come your way. I expound upon that in this week’s video (released today, one day early since I’m on the road tomorrow). Hope that helps.