Reevaluting Facet Biotech (FACT)
Posted on | September 22, 2009 | No Comments
Earlier in the month I discussed a non chroma portfolio sale of Facet Biotech (FACT) because I thought it exemplified some of the non traditional techniques I apply to my value investing ideas. But this stock is one that keeps on giving. There are more lessons for the beginning investor.
I sold for $15.34 earlier this month, but today it closed at $17.18. Did I make a mistake and sell too soon? If you apply 20-20 hind sight. I definitely sold too early. But if you have a plan and you execute it the answer would be no. I believed that Biogen’s offer of $14.50 had prompted speculators to bid up the stock to over $15.00. Since that was a price more than I could justify based on a Graham analysis or management, which I was not all that keen on, it seemed I had done well enough and I sold. The subsequent rise in the stock price is not something I had anyway of predicting or evaluating. Is based on speculative ideas about what Biogen will eventually pay for Facet. I am not saying that the people who have bid of the stock are wrong. I simply don’t know. And the beauty is that I don’t know. And when you know you don’t know something, “Run away!” to quote Monty Python. If you understand the ins and outs of why this stock should be at over $17.00 instead at $15,00 this would be a good stock to own. But if you have no idea why anyone would this much for the company, you should have sold when I did.
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