There are many things to like about BE Aerospace (BEAV).  That is why I recently added it to my portfolio.  Things like the great recent quarterly result, and the "5-Yr Restated" financials from Morningstar.com. 

But this blog is not about a love-fest of stocks.  It is about building a portfolio of terrific stocks of terrific companies and then managing that portfolio of stocks in response to the vagaries of the market--the bullish and bearish influences that bear down upon each of us.

Recently I have modified my trading strategy to acknowledge that there are times that are so terribly negative that naively replacing stocks on 8% losses and continuing to maintain the same size of positions only allows a certain compounding of losses.

To deal with the negative environment that drives me down to under 5 positions (my minimum), I have chosen to do two things: to reduce my replacement size of a position being replaced to maintain that minimum to 1/2 of the average size of the remaining positions, and to allow each stock to dip to a 16% loss (instead of an 8% loss) to hopefully avoid unnecessarily replacing stocks that are victim of the increased volatility we are all observing.

Directly to the point, my BE Aerospace (BEAV) stock hit a 16% loss this morning, and I sold my 215 shares at $9.4154.  I had just purchased these shares 10/27/08 at $11.23, thus I had a loss of $(1.81) or (16.15)% since purchase.

With my holdings now down to 4, I have another "permission slip" in my pocket to purchase a new position to make 5, however, I am not in a big hurry to do anything.  After having burnt my fingers over and over in this treacherous market, the nickel feels rather cool in my pocket.  

Doesn't appear to be burning a hole at all this time!