I got a stock tip from a friend of mine about a Canadian company that makes alternative energy powered water reclaimers.  They can even get water from the air.  Humidity is a measurement of how much water is in the air.  So that makes sense.  It is really what your dehumidifier does.  This should be a very marketable product globally.

I did some research on the company, and found out the head office is located in Peterborough Ontario.  Great.  That made it feel like I was supporting a local company.  That is also one of the reasons I normally only buy Canadian companies.  We have a lot of great innovative companies in this country.  Too bad more Canadians don’t know about them or support them.

Don’t expect the government to do it.  They wouldn’t know a good company if they fell over it.  Sorry.  That should be another post.

I figured that this was a good investment.  Maybe not over a couple of weeks, but over a year, it should be good.  Then I found out they are only listed in the United States.  On the OTC (Over The Counter) exchange.  Different, but what the heck.  The next day I called my broker and put in a Buy order.

While we were entering the data for the buy, the stock went up 2 cents.  That is over about 2 minutes.  My bid was accepted before I even got off the phone, so I was the proud new owner of Stock in Rainmaker Worldwide (RAKR).  By the end of the day the stock was up 5 cents.

I was excited.  Usually when I buy a stock, it goes down for the next few days.  My luck just took a little while to catch up this time.  I received an alert at lunch the next day, and it was down 32%. I had lost over $250.00.  (I should sell my services to Short Sellers.)

Trading for over 14 years teaches you that you should never panic, or celebrate, too soon.  When I first started, this would have freaked me out.  Now, my first thought was; should I buy more of the stock, and dollar cost average down?  I decided to wait and see what happened.  There was no down side to this.  If they went up, that was good.  If they went down, then I would get more shares for a lower price.  Also a plus.  By the end of the next day, the stock was almost back to where I had bought it.

Every stock will go up and down.  That is why you set sell levels.  Both profit and loss levels.  I have those levels notify me.  I then evaluate if I should sell or wait it out.  In this case, when I checked, there were no news releases or visible reasons for the stock to drop that much.

Checking the charts showed that there had been big drops followed by recoveries in the past.  It is a newer stock, listed on an exchange of volatile stocks.  I still believe in the company, so I am willing to take a chance.

If I had of set a permanent loss level of 10%, this stock would have sold automatically after coming down 10%.  With the speed of the drop, it may have sold for far more than the 10% loss. It would also have cost the sell commission.  I would still have lost money, so would have less money to buy the stock again at the lower price, and would still have had to pay a buy commission again.

Is there a fool proof system that never loses you money?  Absolutely NOT!  Regardless of what the web adds say.  Research your purchases before you buy them, monitor them constantly, set alerts, and check what is going on.  The saying “Buy The Rumor Sell The Fact” is to me misleading.  Whether you are buying or selling, research the FACTS!  Prices always move on Rumors.  But, Facts should dictate what you do with that rumor move.