Should I really care?
A week ago there was a passionate debate declaring that one should rarely, if ever, sell a stock one had already purchased, because you never know which will be a 10 bagger. One member of the board was scolded for selling a few bum stocks. I took the point of view that I don’t care if a stock I sold for cash to reinvest does well, as long as the stocks I’m holding do well. Now seven of my stocks, representing 61% of the total value of my portfolio, have reported so far. Their average gain in adjusted earnings per share over the year before was 58.8% - (ranging from a low of 33.8% to a high of 88.1%). This certainly far outdistances the S&P, the NASDAQ, or even the MF. And, as far as risk undertaken to achieve this growth, at least five of the seven stocks have PE’s in the range of 20 times earnings plus or minus (FB and CELG being the exceptions, and neither being a particularly risky company). Should I REALLY care if some stock I have SOLD also does well? Would that mean I have made bad decisions by selling and reinvesting my cash? I mean, really???
Here are the seven stocks that have reported, the earnings for the quarter this year and last, and the percent increase.
BOFI – 126/91 = 38.5%
CELG – 101/75.5 = 33.8%
FB - ---- 54/31 = 74.2%
INBK - - 32/19 = 68.4%
POL - - - 36/26 = 38.5%
SWKS – 126/67 = 88.1%
SYNA – 146/86 = 69.8%
Average gain = 58.8%
Saul