Ahead of the Buffett Curve
I like to review my share sales after three months. No particular reason for three months, it’s a quarter, it’s both long enough and not too long. Today I’m going to make a tiny exception and review my Moody’s sales four days early. Back in April I sold MCO at $28+, today it closed at $26.52, 7.5% lower than when I sold. Meanwhile the S&P 500 is up 11.3%. Wait a second while I pat myself on the back… What I feel even more chuffed about is Warren Buffett now selling down Berkshire’s stake in MCO. Talk about confirmation bias overload. As John Hempton at Bronte Capital points out Buffet is a fantastic seller of stocks.
I normally focus on absolute performance first and relative performance second, but when it comes to my share sale reviews I reverse that. The relative performance is what counts. I find this often saves me from both unwarranted self flagellation and praise.
Take Netflix as an example. I sold Netflix back in February only to see it move ever higher for the next two months and despite a pull back it was 10% higher at my three month review. Fortunately the S&P and Nasdaq were up respectively 17% and 20% so I was able to leave my cat-o-nine-tails in the draw that day. For people who’ve been reading for a couple months I’m still not ready to talk about Leucadia, but I assure you my back has almost healed.
On a less self congratulatory note I was ahead of the Macquarie (MQG) curve today. Selling 40% of our holding in MQG an hour or so before the trading halt. The price movement before the halt indicates that some people had more than an suspicion that there’s good news afoot. After opening at $39.89 MQG had moved up to $41.10 by 2.26pm, a healthy 3% gain for the day. Then five minutes later $41.66, two minutes later $42.04. MQG requested a trading halt at 2.37pm with the price at $41.80. Still as MQG force fed me the shares for $26.60 six weeks ago I won’t be complaining.
I’m currently eyeing up a couple companies which appear to have a better risk/reward profile than MQG and which I can actually understand. There’s also yet another SPP that I may be taking up. These Australian companies are sucking me dry, still you won’t hear me complaining about it like so many other commentators seem to be. Suck it up guys, if you portfolio is so large that $15k bites are too small for you bother with then you’ve really got nothing to complain about have you. Take the lambo out for a spin, have a cry into your Crystal and suck it up.