Rearranging the Deck Chairs on the Titanic
I seldom comment on my actual trades, but in a moment of stupidity* I did today on a discussion board. So I may as well repeat it here.
I got up very early today so I could shuffle some deck chairs around on the Titanic, otherwise known as my portfolio. FWIW which is zero, I sold half of my largest position, CVTX, and pumped that into GE and FACT plus I held some cash back to support selling Puts on LUK.
Another poster explained why he had sold all his shares in this post of the day and I thought we must be getting close to the bottom. Even if not, I like to stick to my knitting of selling fairly/overvalued companies and buying undervalued.
After posting I wondered where the deck chairs phrase originated. I’m still not positive, but did get a laugh out of this joke Stephen Colbert made on the 2006 White House Correspondents’ Dinner.
Some people say changing the cabinet around is like rearranging the deck chairs on the Titanic. That’s not true; this administration isn’t sinking. In fact, this administration is soaring; if anything, it’s like rearranging the deck chairs on the Hindenburg.
Some quick notes on my transactions. CVTX is up big time for me and fairly valued in an undervalued world. The CV Therapeutics board continue to reject Astellas Pharma’s $16 offer, without even discussing it with Astellas. I find it incredibly difficult to believe that CVT board is acting in my best interest. Astellas said it best in this statement
“We are disappointed that CV Therapeutics’ Board has rejected our all cash proposal and did not engage us in any discussions as part of their review of our proposal. We continue to believe that our proposal provides CV Therapeutics’ stockholders excellent immediate value that exceeds what the company could reasonably expect to deliver through their standalone strategy. We remain committed to a transaction with CV Therapeutics, and while our desire continues to be to work together to negotiate a mutually agreeable transaction, we are considering all the options that are available to us to move our offer forward.”
I outlined yesterday why I was looking at Facet, FACT, and have taken a starter position. I bought in with a double in mind. I’ve had a good look at their pipeline since posting and I did not buy for the pipeline. Their lead compound is for MS which is a notoriously hard to crack. The rest of the pipeline are early stage cancer compounds, which aren’t worth much. Who doesn’t have some early stage cancer compounds lying around!
I am skeptical of doubling down, so I quadrupled down on GE instead! Seriously I am not a fan of doubling down, but I only ever took a tiny position in GE to help me focus on the story. Which come to think of it I’m also not a fan of. Let’s see if breaking two rules cancels each other out or invites disaster.
In this absolutely brilliant post on a question and answer session with Warren Buffet, the following joking allusion to GE being undervalued made me dig deeper.
In a joking reference to being hard of hearing, Buffett said he recently told Charlie Munger: “Charlie, we should buy GE at 11.” No response. Moving closer, Buffett said once again, “Charlie, we should buy GE at 11.” Again, no response. Finally, Buffett moved up close and shouted in Charlie’s ear. “Charlie, we should buy GE at 11!”
Charlie turned to him and said, “For the third time, Warren, YES.”
Lastly, still on the rearranging the deck chairs theme I present to you my lunch. Mount Zero Olives, Meredith Goats Cheese and salad greens from my garden (rocket and two types of lettuce). I saw a naturopath yesterday and apparently I have a leaky gut. So it’s time for a change. She wouldn’t believe me that I seldom felt cold or tired and prescribed a boat load of nutrients plus a substantial change in my diet, hence the salad. Now I worried that I’m going to be a super charged, super heated, super freak. Fortunately I like most of the food she recommended, but come on I’m a guy and that is not lunch!
* I believe talking about your trades, even to friends, effects the trade. It adds an unnecessary psychological pressure, with absolutely no upside.
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