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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (36393)	1/6/2010 1:15:34 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78729

EKS. "Investing": I just wonder if the buying is the science of it and the selling is the art of it. I've not found a magic bullet for selling, if it exists. One thing is, I don't use any mechanical means for selling (whereas I sometimes do for buys). That is, I don't use trailing stops. I consider these a crutch for avoiding decision making. And illogical imo for anyone who calls themselves an investor to be using stops when they make their buys. ===================== Disappointed my turnover is so much higher than I expected. The ravaging market of the late '08 through part of '09 led me to make more portfolio changes than I wanted or expected. My portfolio turnover might be 12-18 months now vs. what I had expected (33% or 3 years). Portfolios consist of growth and value stocks. Entering into a value investment, I'm figuring I should/will/must sell if/when the stock approaches fair/full value. Which often seems to be within 1-2 to 2.5 years. I agree that turnarounds in fortune for some of these companies take several years, although of course as prospects appear brighter, the stocks anticipate (sometimes) and move higher (sometimes). For growth stocks, I have no preset idea of time frame: For a stock like Nestle, for example, I'm guessing except for dividends, I might not ever make any money from the stock. (A somewhat disconcerting idea for me.) I'm just figuring it'll keep cranking out chocolate (and soon pizzas) ,and the stock will just be in the portfolio when I die. (At a much higher value than at my purchase prices though. -g-) I'm with you on the utilities (and preferreds). What're the prospects for these to go higher? Yields have come down. If stocks are sold though, where to place the proceeds? Talking here about a substantial part of my portfolio, so just buying a few shares of something else isn't going to do it. I am stuck. Like you, "I am tempted to continue to hold and only peel off shares as I find other value opportunities." What helps me hold utes is this: If people are looking to beat the S&P 500 for a benchmark, well the utilities (utility indexes) have consistently bested the S&P over the past ten years. (Pretty sure, but I'm going from memory here, so this should be confirmed.) In other words, in past, just holding utilities has not been a bad thing to have been doing. Nice link to Templeton stuff. I'll have to get back to it. Little busy now. --- As I buy in stages, I also like to sell in stages. Selling 40% of my remaining shares today of FMX @49.63 (In 11/'04 @ 14-15). P/bk (29), p/sales (11.7), p/e (20), all very high. Company often rumored to be a takeover candidate. These kinds of numbers though seem to be, if not shouting, at least signaling a sell. To me, anyway.

To: E_K_S who wrote (36393)	1/7/2010 2:06:46 AM
From: Spekulatius	Respond to of 78729

My portfolio turnover rate has tremendously increased since early 2008. My average holding period is about 3-5 month. embarrassing really but I benefited quite a bit from the volatility. Lately it has been detrimental to my return, buy and hold worked great since the March lows. Overall i found that the portfolios I have churned the most, performed the best, so i do not really have an incentive to change my method other than it's a pretty tough way to make money. Currently I am more than 10% above Y2007 peak levels, if I had not sold a single share since March 2009, my portfolio would probably 20-30% higher. C'est la vie. That said, i do hold stocks that I bought in Y2002/2003 still (Nestle and BMW). BMW was a dud and did a roundtrip but Nestle has done quite well. I bought some more Nestle near last years low in both my IRA and taxable and sold of he taxable position but kept the one in my taxable account. I think about keeping that one forever.