Today we're going to talk about how Oprah Winfrey avoided a $40 million-dollar loss in the Weight Watchers stock.
Oprah Winfrey, as you know, owns a fairly big stake in Weight Watchers. Last year, or the year before, she made news… owning 10% of Weight Watchers, as she’s the spokesperson.
Today I saw an article that said,
"Oprah Winfrey avoided at least a $40 million-dollar loss after unloading a bunch of her Weight Watchers shares at a perfect time.”
And when you read this you're wondering, "Okay. Did she know something that nobody else knows?"
Now, first of all, what happened to Weight Watchers stock?
Weight Watchers was down 35% because they had disappointing earnings. Things aren’t going really well for the company.
So, down 35% and then you read this article where it says, "Oprah Winfrey got out at the perfect time."
So, what happened? Did she get out yesterday or did she get out here at the high?
Let's take a look at this
If you go to the article from Market Insider, you’ll see that Oprah sold shares in March 2018.
So, was this really the perfect time? Let's go back here. The article says she dumped shares in March of 2018 and the article also claims it was the perfect time. Was it really?
Apparently not, because after she did this, the stock went up for quite a while. The stock went up from $68 to $100.
As you can see here, clearly from the article, she sold it before the stock went further up.
She did not sell at the perfect time. She could have sold later. So why didn't she?
Well, because she also didn't know much more than we do. I mean, even though she owns a large amount of shares in this stock here, she just got out at some point because she thought it's no longer a good idea.
What do I know, right? However, it wasn't the perfect time.
This is what I wanted to make sure that you understand…
When you sell a stock, there is never "the perfect exit," as this article claims.
You're either exiting too early or you're exiting too late.
So, what did Oprah Winfrey do? She exited probably a little bit too early.
The stock continued to go up and it went up from $60 to $100, 30%-50%. You could say, "Oh my gosh, she left 50% of the money on the table."
We all have to get used to it.
You will never be able to sell at the top and buy at the bottom.
This is why I like to use a stop loss and a profit target. I know this before I enter a trade.
When I exit, knowing that there is never the perfect time, I just don't look at the stock anymore.
See, there are so many stocks to trade, and this is why I use my software…
The PowerX Analyzer
…to find the very best stocks to trade. This way, I'm trading different stocks every single day, and I'm not getting married to the stock.
Otherwise, I'll probably kick myself in the butt if I got out at $79 or $80 and it went all the way up to $100. Then you see, oh my gosh, it's going down and then it keeps plummeting.
By the way, if you use the PowerX Strategy that you now know from me, we only want to buy a stock if we see that the RSI is above 50, the Stochastic is about 50, and the MACD is above it's moving average.
With Weight Watchers, the RSI and the stochastic have been below 50 for quite a while. So, this means that the stock is more likely to go down.
Now admittedly, the MACD is above its moving average. 2 out of the 3 indicators said it's more likely for the stock to go down.
So, what do you do?
You Stay on the sidelines until you get a clear signal.
The time to buy Weight Watchers, if you want to go back in time, is whenever you see that the RSI is above 50, and the Stochastic is about 50, and the MACD is above 50.
This is when it’s a good time to buy.
What's the point of this story here?
The point of the story is whenever you see in the press that Oprah Winfrey or somebody sold the shares at a perfect time, keep in mind, there is no such thing as a perfect time.
You're either exiting too early or you're exiting too late. And this is why I like to know when to exit before I even enter a stock.
Hope this helps. If it does, it would really mean the world to me if you would give me a like or comment and say, "Hey, great blog." Really would appreciate your feedback.