Long post: Busting on Grommitt, and net-net reflections
Grommit - you ought to be ashamed of yourself for gaming the system to get 10,000. Thats like buying a stock with $20 of net-net value for $13. Speaking of that...Blair is working, and it is still a net-net, with improving fundamentals.
You can still buy that net-net $20 and a profitable business for less than $17, and now it has "momentum" (ggg - I don't know what ggg means, but Paul says it, so I guess it is cool.) The stock has improving fundamentals, a new CEO and an internet kicker.
I went back over the net-nets I have actually purchased over the last three years. I was surprised there were only eleven - I've probably looked at and rejected ten times that number - and that doesn't include the one that I had a limit order on, gave up when it didn't get filled, and then it got taken over two months later for a 50% gain. I have not taken a loss in any of them - and that doesn't mean I am holding losers - EBSC is the only one I am down on that I am still holding. With some the gains were small, but six of them I took away 40-50% within six months. And now I find myself down 10% in Elder Beerman. I can't even remember being down in a net-net for any length of time - I was a little early on FIT, and then doubled down at 10 1/8 which was nice. A little early on Blair and doubled down below 13 which was very nice. Either Elder-Beerman is a screaming buy now or my run is going to end. (I believe I once said I had never lost money on a real estate stock. That changed very soon after I said that. By that logic, EBSC is a short.)
Anyway, regarding Elder Beerman, I think it was Jeff who asked how to avoid these mistakes. Mistakes? We've owned it for what, two months? I'm down 10%, you're down at most 25%. The concept most central to value investing is being forgotten. It begins with a P and ends with -atience. Relax. Nothing has changed except the price, unless your research uncovers something - I'd love to hear it. If I didn't already own EBSC I'd be buying it now. And if SNH and CMH weren't trading at 8 and change, I'd be buying more EBSC.
Regarding past net-nets I disclosed ownership in -
WTBK - sold for a negligible profit - probably still a buy but I needed marginable securitites to back internet shorts.
MAXS - I wouldn't buy it above 8 1/4.
LKI - I'm out above 9, but below 8 it looks attractive. No longer a net-net. Things have deteriorated. I'm not buying.
EBSC - in at 5 1/8, keeping the faith
FIT - still a buy - I'm looking for 15-20. Nice dividend.
BL - still a buy at 16 1/2, I'd sell at 19-25 depending on how things look.
J - I sold my cost and am holding the rest on the chance something really bizarre happens. Rumors of some internet thing. Play money now. No way I'd buy it above 9. |
