I recently read a quote by Barton Biggs (via The Big Picture) recommending that one “Keep an investment diary and re-read it from time to time but particularly at moments when there is tremendous exuberance and also panic. We are in a very emotional business, and any wisdom we can extract from our own experience is very valuable.”
As a small step in that direction, I am going to outline my individual equity positions (as opposed to index fund, mutual fund, commodities, bond, or cash holdings) in an effort to understand why I am in a position and when I want to get out.
GM – General Motors Company – I got into GM in February 2011 as I felt that I missed the boat on the emergence from bankruptcy and was simply looking to buy the dip. It opened at $35/share and hit nearly $39/share before I jumped in at $33/share. The stock instantly went against me and has seen resistance around $20/share. I still believe in the company and their products, but have no idea why I am still in this trade.
CLCT – Collectors Universe – I got into CLCT in May 2011 as I was intrigued by the coin grading business and realized that CLCT pays a healthy dividend. I got in at $14/share and it is still running $14/share. During the past year it has paid a dividend of $0.325/share quarterly and I have maintained my position and collected a 9.2% return in dividends. I will stay in this trade and would like to increase my position.
PSS - Collective Brands – I got into PSS in August 2011 because my family shops at Payless and I am a big fan of Saucony running shoes. I got in at $13/share and the trade immediately went in my favor. I am still in this trade as it is a winner with solid long term prospects.
GRPN – Groupon Inc. – I got into GRPN with the IPO pop in November 2011 at $28/share and added shares in April 2012 at $15/share as the position immediately went against me. My family uses GRPN products and the business model seems simple enough. I still see long term value here, but am having a hard time holding on at $7/share. I want to wait out two earnings cycles and am considering increasing my position.
MRK – Merck & Co. Inc. – I got into MRK in January of 2012 as I am a believer in healthcare and transportation and have always been a fan of MRK. I got in at $39/share and the stock has just kind of held steady. It has paid a quarterly dividend of $0.42/share and that has netted me a 2.2% return in addition to some recent price appreciation based on some new product development. I will stay in this trade, but am hesitant to increase my position.
EL – Lauder Estee Cos. Inc. – I got into EL in May 2012 after reading an article about the marketing of Clinique brand products. I got in at $56/share and the stock has moved against me. It is currently running $53/share. I still believe in the product line and am cautiously optimistic about the beauty brand. I feel that these simple pleasures are important to people in times of economic uncertainty. I will stay in this trade, but am hesitant to increase my position.