OT
I feel I need to explain to people why I sold a stock like MRVC with all it's exciting potential still ahead of it, and why I stopped posting. This was primarily a personal decision.
Sector's Odyssey
To understand why I sold, you first have to understand the position I was in. I had been in MRVC since early 1997. MRVC was already a large part of my portfolio at the time of the 8/27/98 warning and price plunge to $6. At that point, I had a big decision to make - sell MRVC at $6, take my losses and move on, or load up the truck.
Was the market right, or was I right?
Had I been wrong to like MRVC at $19? I needed more information, so I went to the annual meeting in October 1998, met Noam, took the facilities tour and looked closely at the situation. I came back convinced that I had made the right decision, and that MRVC was a terrific value at $6.
Making the big bet.
OK. It was time to load up the truck. I bought 2 « times more shares than I previously had (ending up with just over a quadruple) at $6 over the next few weeks. Significantly, as I will discuss later, these shares were all in a R/O IRA. MRVC had already been a large portion of my portfolio BEFORE the quadrupling at $6, which skewed it heavily. Think how lopsided my portfolio became when MRVC was $120 and rising.
The big decision.
I have always viewed myself as a "value" investor - aggressive maybe and willing to make gutsy moves, but always where I perceived value. After the Q4 earnings announcement, the merger with FOCI (but not until Q2), the exiting of their switching business, and the new products not yet contributing, left me feeling "uneasy" about the next few months - even with all the potential and good news coming.
So when MRVC began taking off like a rocket, I kept feeling even more uneasy - especially because almost ALL my portfolio value was in MRVC! In addition, the numbers had reached "critical mass" for my retirement goals. The combination gave some sleepless nights.
I could continue to roll the dice with MRVC, or listen to the siren call of retirement financial freedom for my family, RIGHT THERE. The brass ring was RIGHT THERE, GO FOR IT. I grabbed it, selling first calls at $108 (bad move), then shares at $118, $128, $144, and $150. Every time I sold, MRVC went higher, so I sold more.
Feeling depressed.
I had done it! A secure financial future sitting in cash. BIG PROBLEM - it was almost ALL in IRAs and I am not near 59 «. All I had to do was reallocate it conservatively, figure out how to tap the IRAs (it turns out this is easy and INTERESTING, so I will discuss this in a separate post) and I had it made. Instead of euphoria though, I felt depressed (talk about human nature), why - because MRVC KEPT GOING UP AND ISSUING GOOD NEWS - with me OUT. I got so disgusted, I totally ignored all things MRVC until the past few days.
Locusts and Honey
While I was wandering around feeling depressed with an almost all cash position, (action withdrawal?) I got interested in one little stock in particular (more on this later) and in the biotechs, which I started researching. I made a couple quick trades in CYTO (one was VERY nice) while I was reading threads and trying to learn this area.
Suddenly the Nasdaq started correcting, especially in the biotechs. MRVC also started falling, but was still way out of range. Then the biotechs entered what I hope is a capitulation phase, and MRVC plunged too. I bought more CYTO at $13 « ( too early as it turned out). Then yesterday CEGE hit levels almost irresistible to me. At $29 it was trading basically at a cash (+stock) level. I bought a good chunk. Today it dropped even further, so I bought more. CYTO dropped more too - so I bought more. MRVC dropped further - like a rock, so I reentered also.
So much for my cash position and secure retirement! <g>
Next up.
Next, for all you rich MRVCites, I'll do an OT post on what I found on tapping IRAs early. I also want to do an OT post on an interesting little stock I found with exciting potential for large long term appreciation and some parallels (in some ways) to MRVC.
I still haven't read the MRVC threads for weeks, and probably won't be able to catch up (especially with the NCAA going on) until this weekend.
For now I'm just glad to be back! |
