Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
John,

Cramer's approach also lets your miss the multibaggers that go several x. I keep a large portfolio just to trap these ones. If you do an extended analysis you will see why having multibaggers is critical to achieving >15% returns on a regular basis.

I too sold energy and metal stocks in an opportunistic manner but after holding for 3-5 years with 2-3x gains. I had PDS for last 3 years having purchased is from $25 down to $15. I did not sell it. In retrospect, I should have. But I didn't sell it for several reasons: high yield, low valuation even at $27 unlike other oil and steel stocks and depressed nat gas prices. So yes, you win some and not all. It is important to have a selling strategy based only on a serious mismatch in share prices and the share potential like Bill did with IPHS (other than a classic issues such as need and change in investment thesis). I got rid of GRMN at $102 having purchased it at $35. At $102, with a very high PE ratio, with cell phone competition heating up and with NVT acquisition by NOK, it did not make sense to me to hold it. (I did repurchase GRMN (a much smaller quantity) at $65 and finally sold it at $36 after coming to a conclusion that the original investment thesis was lost upon me and not because of the loss.)

I purchased AMZN from $50 down to below 30 and have never sold it. Even when it was at $102. Right now I am still at 3x gains with AMZN at $80+. Similarly with CTRP, ATVI and many others. It is true that my gains in NVDA, and many others have been decimated to 40% loss from a 40% profit. I am still keeping most of them. I even lost 80% on stocks such as CCRT (SA) which I finaly sold based on their latest review. But when I do the math it was still worth to hold, other than the reasons I stated earlier, just to hit upon those multibaggers. The best proof is the scorecard of SA and HG, the long running TMF newsletters. Remove a handful of multibaggers and see what happens to the scorecard.

Over the long run, you can see that multibaggers end up dominating the portfolio, if you let them. That is why Cramer's portfolios have anaemic returns despite all his brilliance.

Anurag
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.