Pacific Ethanol (PEIX) Blows It Out

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My first public note was on PEIX – you can read it here. Following their blow-out earnings last night (which I fully expected as detailed in the model you can find in that note), the stock has shot up from sub-$4 to over $12, a multi-bagger in just 8 weeks. So today I received a question about what to do with the stock at these levels. My response is simple:

Throughout all my years of investing I’ve found that the big money was never made in the buying or the selling. The big money was made in the sitting.

– Jesse Livermore

Put a X% trailing stop loss and let it ride (where X is equal to your drawdown tolerance).

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