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

To: Paul Senior who wrote (49673)	10/7/2012 11:21:40 AM
From: Jurgis Bekepuris	1 Recommendation Respond to of 78753

I only haphazardly follow the stocks of both losers and winners that I sell. My interest usually is not why I lost or won, that's pretty clear at the time of the sale. My interest afterwards for both categories is whether I can reenter the position at better price and/or the business has changed for better. I probably should track my losses as well as my gains and try to figure out why they happened. I don't do that (yet?). My feeling is that gains are either due to macro reversal (bought at panic, sold at "risk on") or due to business improvement (or market acknowledging that business is not as bad as expected). Losses are usually due to raising cash (or switching to another stock) during the panic/downturn times when most positions are cheap and whatever I sell is more expensive later on. Another source of losses is when the business is as bad as market expected or even worse and decline continues. I definitely lose some gains due to selling great businesses at high prices that subsequently run up even more due to great execution (GOOG, AAPL, ISRG, MA). It is tough for me to hold forever overpriced stocks though. Regarding changes in last couple years: - I also raised cash to ~20-25% and keeping it there. However, I think this is part of widespread value investor underperformance in 2011 and this year. So far my performance in 2011 and this year are below market. - I am holding oil/oil service stocks. However, I am beginning to think that oil/oil service stocks should be bought mostly during the panic oil price crashes. Most of my buys during the elevated oil price periods did not yield good returns, even though the stocks looked cheap. - I've bought tons of prefs during 2009 crash. I have sold most of them and have very little portfolio remaining in fixed income. I don't think this positively or negatively impacted my recent performance. I don't think yields are attractive right now. IMHO, if one looks for yield with good future, one should buy rental RE. - I've been moving from Buffettology valuation to E/EV to DCF valuation. Not sure yet if this has a significant effect to results.

To: Paul Senior who wrote (49673)	10/7/2012 1:50:09 PM
From: Sergio H	Read Replies (1) \| Respond to of 78753

Paul, how about discussing the metrics at the time of sale, regardless if its a winner or loser just as you do when starting a new position? It would be interesting to note if the metrics that led to the purchase have changed and if these metrics have affected the stock price or was the price change simply due to the market tide. Did the stock's previous record of increased book value change direction? Has the ROE or ROA that you found attractive changed? Is the debt position now unattractive? Thanks for your consideration.