Wednesday, July 9, 2008

Sold WFR, NVDA; Bought More ACE

I sold two stocks today, for a pretty lousy reason: I was sick and tired of seeing their ticker symbols in my portfolio. They also do not pay dividends, have been declining in value for months, and had become insignificant holdings percentage-wise. But mostly....just sick and tired.

WFR has fallen 26% from where I bought in November, and 43% from its high in December. It has been plagued by not only a market rotation out of solar stocks, but also by underperformance as compared to its peers.

NVDA has fallen 60% from where I bought in October, including a disastrous 31% decline on July 3rd after significantly lowering revenue guidance for its upcoming quarter. It warned despite the overall PC market being, by all indications, healthy.

These stocks are both solidly in "value-trap" territory- meaning they should have been sold several percentage points ago.

With the proceeds from these long-overdue sales, I added some more Ace Limited (ACE). Reinsurance is nice and boring, which is just what is needed right now. Plus, some knucklehead at Citi downgraded the stock because they are planning to reincorporate in Switzerland (from Bermuda), and therefore are subject to being dropped from American-based indices. Somebody should tell him that a) the stock will be picked up by international indices, and more importantly, b) being added or dropped from an index is a one-time event, which has no bearing on long-term stock performance. Thanks for saving me a couple of bucks per share, Mr. Analyst.