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No. of Recommendations: 1
Even if you bought it for $50 in 1998, your annualized return has been just 8%. If you bought it at the peak, it's been 10 years and you just broke even.

The Gardner brothers have taught me that to make money with great companies like AMZN one must buy them regularly at best opportunities. AMZN is one company where one can make money at all prices. I purchased AMZN between $15 and $60 over the last 5 years. When I purchased it at its lows, it was considered a very risk deal. The P/E was very high. I purchased it half a dozen times. My average price is ~25. Today it trades at $117. In less than 5 years by returns have been ~4x-5x. Looking at one price point is not the right way to invest, IMHO.

MELI is no doubt a great business, and looking back, I think I got a little too cute with it. When I sold it, people were coping with massive losses and I knew a bad quarter was coming due to currency exposure. So I sold because there were better near-term opportunities elsewhere (and if you reallocated your proceeds into my next pick -- CMFO -- you've done quite well).

FWIW, my thinking: It is not about being successful in rolling the money into another high flying stock. It is about buying into a great promise and having a sense of ownership of that business. Otherwise, I consider it trading and not investing. Trading is not a dirty word as long as the strategy is identified. I like TMF1000's approach of having a small trading position ride over a much larger investing position. There can be infinite other successful approaches. I have chosen the one where I invest into great businesses many times over time and occassionally trade with a small amount of money. So what to do if the investment position rises to untargeted heights? I prefer to leave it alone if it is a great business as I have done with AMZN and have reaped rich benefits so far. But if the business does not appear to me as a great one (a decade long horizon), I don't mind selling it. Maybe even this is a bad approach. For the last one year, I have been buying 2 positions: investment position and a much smaller trading position. The trading position is like a nicotine patch for me. It help me deal with my emotions.

Anurag
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