People seem to be tiring of this thread, so I’ll shorten the write-ups and reflections, and wrap it up quickly. Some of the themes are repeats of #s 7-9 anyway. But… Quickly… Before I start… If I’m talking about repeating themes, does that mean I’m making the same mistakes over and over again?
Well… Yes and no. If I make a mistake in '05 and again, in '06, I’m going to be gentle with myself about it. If I make the same mistake again in '15, less so. I talked about having bought two stocks yesterday. I am completely up-to-date with my reading on those stocks and don’t anticipate falling behind (beyond temporarily - I do like to take vacations). I have a pretty good sense of how they intend to grow their business and reward shareholders. So I don’t think I’m still making the same mistakes illustrated in previous posts. My picks from here on out won’t all be winners. But I hope I can look back at them a decade hence and say that I was employing good processes that periodically led to a bad outcome.
I’ll have to disagree with the group - at least for now - regarding diversification. I’m not comfortable with a very concentrated portfolio, and I’m not going there. Yet. I anticipate that my portfolio will be more concentrated by decade’s end than it is today, But I don’t think it’ll ever be as concentrated as some here advocate. I appreciate your intent to help and I intellectually understand the points you’re making. But I have to run with what works for me. My process continues to evolve, so I should “never say never”. But there’s a chasm between “my portfolio” and “concentrated”. It’ll take me a while to design a bridge. I’ll leave the rocket-powered motorcycle to Evel Kinevel! https://en.wikipedia.org/wiki/Evel_Knievel
INVN (2014) - I bought into the TMF hype with this one. I think that I failed to see two important things. The company was insisting on making a premium product with premium pricing, but the market wanted something cheaper and good-enough. Also, there was a CEO transition, and the incoming leader wasn’t nearly as good as the departing founder.
WFM (2013) - I’d like to think my choice of Whole Foods was bad outcome rather than bad process - many TMF analysts have been lower-ase-f fooled by this one. There’s a quote attributed to Buffett that when a great management team tries to manage a business in a lousy industry, it is usually the industry’s reputation that comes out unscathed. But Mackey & Co had dodged that bullet for decades.
NUAN (2009) - An investment in the leading voice-recognition software producer in 2009 SHOULD HAVE lead to profits today. However, the long-time CEO has made himself rich at shareholder expense and used acquisition to cobble together an unwieldy mess. That CEO is stepping down, and I’ll probably let this small position sit a while while I learn more about the incoming leaders.
DNR (2010) - These guys inject carbon dioxide into oil wells whose production has peaked to improve well output. It sounded like a smart idea to me, but I guess I didn’t really research the feasibility well enough. My timing was also bad, as it wasn’t too long before oil prices were in decline. This is in a taxable account waiting to shelter a capital gain.
GES (2010) - From now on (actually, from a few years ago on), I’ll stay away from fashion stocks. Honest! I will! See also: COH. This is also in a taxable account. (Excuse my political incorrectness, but…) Each year, I review the annual report. The color pages are easy on the eyes. The black and white pages are kind of the opposite.
MYRX (2007 + 2008) - Actually, I bought Myriad Genetics (MYGN), a company engaged in genetic testing that rates people’s proclivity towards serious subtypes or breast and prostate cancer (and some others). The company also had a biotech arm that - at one point - had a promising Alzheimer’s medicine. Myriad spun out the biotech arm to shareholders as MYRX. Over time, the drugs failed and not much is left of MYRX. It is still publicly-traded, but my shares are worth less than what my brokerage charges to make a trade (and I’m not using an expensive broker). Earlier this year, I sold my MYGN to make room for a company that I thought better represented the future of personalized medicine than MYGN did, but that’s a story for another day.
I hope you all have found at least some of this exercise helpful. There seem to have been a lot of posts in the threads I started, but the topics always seemed to veer off from the points I was trying to make. That’s OK. This is your board as much as it is mine, and you should take the threads where they best serve you.
Thanks, best wishes, and Happy New Year,
TMFDatabaseBob (long: DNR, GES, INVN, MYRX, NUAN, WFM)
See what a “Coverage Fool” does here: http://www.fool.com/community/community-team.aspx
See my holdings here: http://my.fool.com/profile/TMFDatabasebob/info.aspx
Peace on Earth