Why I Sold off "Long Term" Positions in May 2010
I feel the need to explain, for the record since nobody reads me, why I sold a bunch of my stocks in May 2010, given that I picked everything originally as long-term picks. There are two reasons, really:
1) I bought my first house, and while I did not need the money in my stock accounts to fund my down-payment, I decided that I wanted to hold a larger cash position as a percentage of my funds left over; I wanted to be sure I had six months of living expenses in the bank, in cash, even after I purchased the house (not including 401K money);
2) that is only half of the analysis of course, as I had to choose which stocks to sell. I chose to sell two categories of stocks -- the stocks I thought were the riskiest/most volatile in my portfolio, and the stocks that I thought had the highest probability of being at their fair value or above it. This caused me to sell cyclical stocks like MEOH and AAUK, and caused me to sell stocks in smaller companies like CCF, and caused me to sell stock in companies like ITRN, which I had originally purchased at the market lows at around $8/share, but which I thought at $14 - $15/share was at least at fair value, if not above it, and CCL, which I think was a mistake ever to label a long-term investment, because it does not meet my criteria for non-debt-fueled cash flow growth, and is simply not a strong enough company, although I made a lot of money on it, since I purchased it at a market low and sold it at or near a short term high of $40/share. If there is any company whose stock I now regret selling, it is EBAY, because I do still think the company's shares are undervalued.