This one was really difficult to pull the trigger on, floated around the idea for a while.
Mostly weight related - was at 5%, trimmed it back to 4%. Really just wanted to reduce a little bit going into earnings today. The way I see it is this: if the stock rips after earnings, cool, it'll just come up in weight a bit and all will be fine. If the stock drops, then I can add back what I need to in order to get back to the ~4% mark.
A little late on this post as I made the trade near the end of today's session but needed to leave right after, sorry about that.
There's been a lot of questions & discussions about trimming lately - when, why, how much? The correct answer? Couldn't tell you, but I can tell you what I did.
The main reason for trimming MU today was weight. I started the position at 1.5% and today it was at about 4.5% of my portfolio. So, I trimmed it back by 1% (~22% of the position) to ~3.5%. I'll likely cut it back further to 3%, I just didn't want to do it all at once.
The other reason is valuation and recent performance. RSI is at 81.8 today and the PE is around 50. The forward valuation still looks good and upward price targets have been rolling out, but we're well past the 20 PE that we were at when I built the position.
The final reason (and arguably most important) is psychology. I will always feel worse about "losing" gains that were guaranteed but unrealized, than I will about missing out on the potential for more gains. I've also felt myself begin to feel a bit greedy and glassy eyed in the recent euphoria of a seemingly endless sea of green, so I needed to press the sell button on something to keep greed in check and exercise discipline.
Have a great night!