Back to the humiliation.
Is there anything harder in stock investing than deciding when to sell? Either you have a winner, and would like to be "prudent" and take some profits, even though you risk giving up on even greater profits. Or you're stuck with a loser, and "prudence" calls for cutting your losses, though that entails buying high and selling low, a surefire way not to make money.
And, sure, they are just pieces of paper, but you love these stocks. You don't want to abandon them when they've been so good to you, or are going through some hard times.
Or maybe that's just me.
Disclaimer - these are determined from sell point to current or buyout. Some of these stocks have dipped in between those two points, in which case I missed an opportunity to dollar-cost-average (DCA) a way into even bigger gains.
Here are my worst stock sells ever:
Stock: Kos Pharmaceuticals (KOSP)
Sale Date/Price: January 2006 @ $49.56
Buyout Date/Price: November 2006 @ $78.00
% Gain (Annualized % Gain): 57% (35%)
Divesting Idea: I had watched KOSP fall nearly 37% from its high, and panicked, selling at a slight profit. After all, Kos was just a one-trick pony (cholesterol drugs).
What Happened Instead: That one-trick pony was coveted by Abbott Labs, which bought them out less than a year after I sold.
Stock: Sanderson Farms (SAFM)
Sale Date/Price: January 2006 @ $26.90
Current Price: $44
% Gain (Annualized % Gain): 64% (41%)
Divesting Idea: Another unbearable price fall (45% from its high), and right around the time of the bird-flu epidemic. I decided that my position was too small and didn't want to add to it, so I exited completely.
What Happened Instead: The bird-flu scare passed, chicken prices went up again, and the stock rebounded nicely. Too bad I was chicken s#!t when it came to buying low on this stock.
Stock: Corning (GLW)
Sale Date/Price: June 2006 @ $19.30
Current Price: $26
% Gain (Annualized % Gain): 32% (36%)
Divesting Idea: I had a great run, but the stock had fallen 35% from its high, and there were reports of falling demand and increasing supply of flat-panel glass. I wanted to lock in my profits.
What Happened Instead: Prudence didn't pay off here, as demand for glass snapped back, and the stock recovered.
Stock: Constellation Brands (STZ)
Sale Date/Price: March 2007 @ $19.16
Current Price: $24
% Gain (Annualized % Gain): 25% (112%)
Divesting Idea: There was a supposed grape glut, and Constellation was aggressively buying up vineyards and racking up debt. The stock fell 38% from its high, and I decided to lock in a decent 33% gain.
What Happened Instead: It's an unfolding story, but it seems the glut was false, wine consumption is up, and/or Constellation is integrating its acquisitions quite well.
Stock: AmeriCredit (ACF)
Sale Date/Price: March 2007 @ $20.89
Current Price: $27
% Gain (Annualized % Gain): 28% (143%)
Divesting Idea: I had held this sub-prime auto lender for nearly four years and was up 117% (23% annualized), but seeing what was happening to sub-prime home lenders (e.g. New Century) at the time, I panicked and sold.
What Happened Instead: The sub-prime crisis was limited to housing (at least so far), and the stock bounced back to near its previous high.
And, the "winner" for my worst stock sell ever:
Stock: Mossimo (MOSS)
Sale Date/Price: May 2005 @ $4.25
Buyout Date/Price: April 2006 @ $8.50
% Gain (Annualized % Gain): 100% (41%)
Divesting Idea: I decided that MOSS was too small and illiquid and was being ignored by the market, and gave up on it.
What Happened Instead: Evidently, the founder of the company agreed with my assessment and announced he was buying the company and taking it private. Shortly thereafter, Cherokee offered a sweetened takeover bid, which was accepted.
Tomorrow, I'll look at my best stock sells ever.
