It’s that time to reflect upon results through September 30th, and actions taken. But first, I want to point out a link that GauchoChris shared with his post of results through September. Take a moment and read post #6808 that he titled “The invisible workers.” I printed that and mailed to both of my kids. Thank you, Chris for sharing your knowledge, experience, and where you are currently in terms of investing strategies. The more young people that we can encourage in getting involved in planning their own financial independence – the better off they will be. I wonder where I would be today, if I had known just a bit of what I know about investing 40 years ago.
My portfolio’s results through September: +26.9%
S&P: +12.5%
Actions for the month of September:
Sold Blackline (BL). I’m trying to streamline my portfolio.
Sold Costco (COST). I owned Costco for 8 years, and it was time to say farewell.
Sold FactSet Research Systems (FDS). I want to reduce the number of stocks that I am following.
Sold 7% my Netflix (NFLX) shares. I felt that one in my heart! Even with the sale, they managed to represent 22% of my total portfolio. I purchased the stock in 2008.
Bought Nutanix (NTNX). I follow them on LinkedIn, and there is a lot of buzz about the company.
Question for the fine folks on this board. I manage to do a reasonably good job at identifying growth companies, and I will make the first investment. But I don’t do well in making subsequent investments. How do you manage to make the follow up buy? Do you follow the stock price, and any news/quarterly reports? What works for you?
My thanks to all of you (Cowboys AND Cowgirls!)
TracyK
Thanks for your reviews and input into pooling our collective wisdom.
Question for the fine folks on this board. I manage to do a reasonably good job at identifying growth companies, and I will make the first investment. But I don’t do well in making subsequent investments. How do you manage to make the follow up buy? Do you follow the stock price, and any news/quarterly reports? What works for you?
That’s an interesting question. Usually I worry about what to invest in/when and what to exit and when but what to add to, when and how is not something I have a mechanised approach to.
What I would say and this is partly a shift in investing style and partly a learning from hard lessons is that in olden times I would be more in value investing mode so typically I might see something of perceived value and add on drops in the share price. Now with a growth investing agenda I might identify and make a first purchase and add not on drops but as the share price breaks out or achieves an upward trajectory.
I might make additions to growth stocks if the share price drops but usually if that is also accompanied with a de-risking insight - for instance I love investing when an earnings report demonstrates business performance, removes uncertainty and risk yet the share price drops back.
2 examples of this working for me have been Ali Baba and Micron.
I entered when they were bombed out and looking like good growth prospects, I added when fundamentals and earnings accelerated yet when there was a pull back in the SP but I also added when the share price broke out from old highs or from under key resistance levels.
In terms of amounts I might start with a 0.5-1% investment and add 0.5-1% at a time (usually a function of cash availability constraints unless an opportunity also times with an exit opportunity).
With that said, I am not advocating this as the right approach or even as a conscious strategy but merely sharing what I have had a tendency to do.
I just erased a fairly lengthy reply post about CASH (MetaFinancial Group), then fortunately took a second glance at your post…, determined that you meant ‘cash’, not CASH Yes, I see the ($$)now.
Oh well. I’ll have to do without your insight into CASH–post loss of H&R Block business.
Thanks for your post. I seem to have exited ABMD too soon.
Just so happens I’ve been thinking about the question you asked. As I learned more throughout the years, the way I view stock buying changed quite a bit. Now I don’t pay attention to the stock price that much. Instead, I look at the market cap, potential and risks, and decide on what percentage of my portfolio do I feel comfortable owning the stock.
For example, recently MTCH came to my attention due to articles I read and best buy recommendations from The Fool. Initially, I purchased 1% based on the original recommendation, and held it for about a year. Then came the latest earnings report, which the stock price acted favorably towards, so I felt it warrants a 2% position. Then I saw the best buy now rec talking about how it’s not expensive in this market based on PE and growth rate, I bumped it up a bit more. Lately, after thinking about how it’s the leader in its industry without a strong competitor and how fast Tinder is growing, I bumped it up to 4%. I feel pretty comfortable with its weight in my portfolio now. Another way to think about it is if I can own just 25 stocks (100% / 4%), would MTCH make the cut, the answer is yes.
NFLX is another example. On the high level, I felt it can grow to be a 120 ~ 150 billion market cap company back when it was around 30 billion, so I just increased the percentage along the way as I see proof its business is strengthening and believe more and more about its business model. A lot of times the latter purchase prices are significantly higher than before, but I didn’t really care, as I felt the company can grow to be significantly larger.
TracyK, I hope you were at least fortunate enough to sell FactSet after its recent bump in price. I had been eyeing the exits after holding it for a year of flat results, but was encouraged by its recent news.
Yes, I see the ($$)now.