Eric:
I understand where you at; selling for a long term investor is always a difficult decision. What I've learned is to rely upon one's gut, but also be fully informed as to where the industry and technology is headed. What I'm getting at is have a vision that you are well-grounded in.
For example, I hold many ORCL shares as a core holding of my portfolio. I've held 2/3 of the share I now own since an initial investment in May 1990. The lion's share of the other 1/3 I added when the stock got slammed at year end 1998, IMHO unfairly. But nothing in life is fair, as we know, but such distortions in "fairness," particularly when it comes to investing, create opportunities.
Despite the naysayers pundits pooh-poohing ORCL's fortunes going forward, I just didn't see it that way. I saw Ellison as a man of vision & whose vision I agreed with - ie. the migration of computing from the desktop back to the network, or more particularly, the Internet. Moreover, I didn't necessarily agree that the database biz was flattening as Rick Sherlund of GS claimed, which was in stark contrast to the view held by ORCL's execs. I asked myself who knows really what's going on in database, the industry analyst who sit in an ivory tower, or the execs down in the trenches who deal with the customer on a day-to-day basis. Finally, I rationalized that ORCL's dominance in database uniquely positioned the company to swiftly and convincingly move into new markets such as what we see today in the areas of CRM, B2B exchanges, and ASPs. The bottom line to all of this is too have a vision, particularly when contemplating the decision to sell a long term investment.
As I stated above, I understand where you're at; I've been there myself. My most recent sells have been T, DELL, SIII, KR and Fidelity Select Healthcare MF. I don't regret any of them. As to one I didn't sell, BRKb, I'm glad I didn't despite its terrible performance over the past two years.
As I see it, the market that we're in right now will pretty much trade sideways for the next 4-5 months taking us through the summer and into fall. If you wish to sell, IMHO, you will have sufficient opportunity to jump back in when the fundamentals of high techs, particularly B2Bs and telecom/network infrastructure companies like AFCI, improve going forward as evidence of the demand for their products show up in the financials, and projections of continued growth are seen with more clarity. However, some investors may seize this lull in the demand for tech stocks to accumulate & increase their positions in front of renewed demand for these stocks in the fall. So, as a long term investor, you might be buying here; as a short term investor, you might be selling a portion thinking you can put your capital to better use over the next few months.
But in your decision to sell, I would recommend that you also decide where to allocate that capital. Do you put it in cash? Do you invest in a beaten down old economy stocks that presents "value?" Do you look to overseas markets? IMHO, I would weigh the alternative use of my capital against the decision to sell a long term investment. In short, know what you're going to do with your money before you sell, and be convinced that the returns outweigh the commensurate risks of having your capital deployed elsewhere.
JMO. |
