Mad Mail:

Follow up from previous viewer question...

Innophos Holdings Inc (IPHS)

Jim:    Before we get into Mad Mail lets do some housekeeping… the other day Keith in Florida asked about Innophos Holdings… Innophos makes things like specialty acids, phosphoric acid, also fertilizers for the industrial, pharmaceutical and food verticals… very complicated little company… but does have a good yield of 4.6%, which my balance sheet analysis says can be covered… like any chemical company out there, it has been hurt by the world economy… but it looks like they are doing things right, cutting costs, retooling plants, cutting the bottle necks… I find it an intriguing story, here is what I am going to do, on May 5th it reports… I am going to take another look, because you asked me to check into it, and I found myself very intrigued… but I cannot get ahead of that quarter, that will determine how I feel about it.

Mad Mail:

General Question...

Q:     Dear Jim,
Love your show. In the current volatile market, can you guide us in the use of stop losses or sells and trailing stops, whether in a dollar amount or percentage? Also, is the strategy different when applied to investment vs. speculative stock?
Michael

Jim:    Okay, in Real Money, the book, my old handbook for my hedge fund, I specifically said do not put these stops in… because you are going to get an execution price that is not good enough, if you are going to trade stocks, okay, you need to be focused on the stocks… you can’t just put some stop loss in… if you are going to invest, that is different, you can check once a week… but if you are going to trade, you have to be there… and don’t use stop losses… because you will end up with a bad price… also, no market orders, that is another thing that you can’t do… trading requires some time, and I do not ever want to make it sound like it is an easy thing to do on this show.