I bought DirecTV Group (DTV) in 2005 at $15.50. This afternoon I sold half of my stake at $31.00. The shares ended the day slightly under $31.00. Long-time Controlled Greed readers know I sell half of any position when it doubles, so that's what happened today.
DTV clocked in at about 10% of portfolio assets at the end of Q3. It remains a significant position for me. And when we recall that DTV is a huge part of one of the Liberty Media tracking stocks, it is even larger. (I hold all three Liberty Media tracking stocks and consider them a single position.)
This move adds to my cash (20% of portfolio assets at end of Q3). My cash in my brokerage account is a US Treasury money market fund. Which means it earns nothing. I'd like to put it to work -- but not much looks cheap right now. I'll have to see how much longer that remains the case.
After holding something for 4 years does it make sense to
sell it just because it has doubled? If the company
was undervalued orginally and if management has increased
its value, wouldn't you want to revisit what the company
is now worth? In the same vein maybe some companies are
worth less after the recent disruption because they will
be impacted more...
Posted by: NJ | November 24, 2009 at 03:40 PM
@NJ: A 100% gain in 4 years is a nice return on an annual basis, and taking profits makes perfect sense to me. I'm well aware this may strike some as overly conservative.
Posted by: John | November 25, 2009 at 01:05 PM