My broad market portfolio did well in absolute terms in April but trailed the S&P 500 for the month by a little; I’m still leading the S&P 500 for the years by a decent margin.? Some of it boiled down to selling ABN Amro too soon, and hanging onto Barclays and Royal Bank of Scotland.? I followed my ordinary valuation rules that have protected me well in the past; they will protect me well in the future as well.? You can’t win them all, but you can reduce risk.? That’s why on Monday, I trimmed my postions in Vishay Intertechnology, Valero, and Bronco Drilling.? They have run; time to trim.
Today’s action in two stocks impressed me: Liz Claiborne, and Fresh Del Monte.? One down a lot, and the other up a lot.? I have owned both in the recent past, and sold them due to over valuation and possible accounting difficulties, respectively.? This is why it’s not wise to pat yourself on the back too much when you miss a mistake by selling early, or kick yourself too hard for missing a winner by selling too soon.? These things happen, and “woulda, coulda, shoulda” just confuses matters.? No one gets out at the top and in at the bottom.? Just do your best, and follow your plan.? Nothing will ever be optimal, but things can often be very good.
Full disclosure: long VLO, VSH, BRNC, BCS, RBSPF
Thats too bad, Valero went up $1.75 today. A solid company with good fundamentals, bad sell.
Derek
Derek, no, it’s a good sell. I retained over 80% of my VLO stock. My rebalancing discipline adds about 2-4%/yr to my returns on average. That it does not do so on one stock for one day matters little to me. I made money on the balance, and that’s enough for me. If one has to sell all at the peak, and buy all at the bottom, one will never win in the market. My disciplines enable me to make money most of the time. I don’t care about one day. If you care about one day, go listen to daytraders. That’s not me.
Hey, great blog, keep up the good work! I was wondering if you ever short in your portfolio.
Best,
DGS
p.s. I find I frequently have trouble connecting to your site and it is frequently slow; maybe consider switching servers?
DGS, I tend not to short unless I find something materially awry in the accounting that few others know. That isn’t often. I tend to adjust risk levels by industry selection, cheapness, accounting integrity, asset allocation, etc. Under most conditions, it is easier to make money and control risk by being long.
As for my web hosting, I probably use the site more than any, and the delays sometimes irritate me as well. If I get a few more complaints, I will look into switching, but in general, Netfirms.com has a good reputation for hosting.