New Holland (NH) is a wonderful example of my style. The stock did not hit me over the head until it got to $10, despite several folks buying it quite a bit higher. I bought it then for a few points and sold it because I got uncomfortable about something. I bought it back again at an average cost of $9 and sold it at $17.
One thing I have learned in 35 years of investing is, to paraphrase Buffett, there will always be another "pitch". I have usually found that if I buy before a stock is screaming "buy me" I make a mistake. Waiting means I miss a lot of stocks (like CAV at 3 3/4 last week, which might not see that price again). But so what. I am waiting with some interest on EBSC.
When I buy, I think I have a potential 50+% in one year which, since I have no compunction about buying a stock like CAV, I need to offset the volatility of lower quality stocks/companies and the fact that I am a poor seller - despite being pretty accurate on NH (thanks to responding properly to specific news).
When stocks are screaming "sell me" I too often ignore it as I generally look to hold it for a 2-3 year time period and much higher prices. That keeps me in a stock like CCUR which I bought under 2 a couple of years ago and is now 7, but has also gotten me into trouble on some cyclical stock round trips (either because the business was cyclical/changing, like the electronics distributors, or the stock price tended to have wide swings around fair valuation, which I did not pay enough attention to, like the ECM stocks).
I believe in concentration, no more than 10-15 stocks, as I do not believe I can properly manage any more than that number of companies.
Proper management for me means reading everything public on the company that I can find including the filings, the threads, as well as talking with mgmt. In my opinion, if I couldn't write an analyst report I don't know the company well enough. |
