Re YUM, today I sold all of it in all accounts as it broke 25 1/4 support. Good thing - my sell prices were above 25, and it looks like it's headed to 24 and beyond right now.
Why did I do this?
1. New lows rule - gotta abide by it.
2. The market has been very good at ferreting out info on this company. When the stock falls, reasons seem to emerge later. The market is all over anything to do with Ameriserve, and since Ameriserve represents a fairly significant risk - as evidenced by the $72 million charge that didn't resolve anything just last quarter - I am willing to let the market tell me a thing or two with this stock.
3. I've been in and around this stock for 2 1/2 years, and it is not doing what I thought it would. I recall one successful long-term investor who said he gives up after 3 years because no matter how right he thinks he is, he has never had reason to regret selling a go-nowhere stock at 3 years. I'm making it 2 1/2. This would be my second one, but I don't regret selling my first one - Deswell. It is possible that Clayton and Senior Housing may be the third and fourth, but there's a good year and a half on them yet.
Now, these are all technical reasons. My fundamental investment thesis, as I detailed it over 2 1/2 years ago, remains intact. The company has done all the right fundamental things that I thought it would do. But fundamental analysis is only a majority of my process, a process where unanimity is required. I wish I could get you up to speed, but there is really nothing blatantly new - except the market telling us something has gone wrong that we don't know about yet. Advertising turmoil, lack of organic growth, Ameriserve, Ameriserve, Ameriserve. Those are the likely culprits. I'll find out from the sidelines.
Mike |
