Investing Regret
Posted on | April 27, 2010 | No Comments
I had a dose of Investing regret the other day. I have posted about my terrific gain on HAST for the 80-20 portfolio. Right after I sold it at $7.17/share, the price dipped. But then it soared. Then it had a spectacular rise to over $9.00/share. I was, of course, bummed that I had not gone for the ride, but I nevertheless felt good about my decision to sell. The point of the 80-20 portfolio was to remove emotion and other behavioral traps that might reduce my investing gains. That might sound contradictory, but it is not. I stated that my selling strategy would be to sell on a 50% gain. Once I had achieved a 57% gain, I sold. My goal had been achieved and the continued rise of the stock was not part of my investment process. Moreover, I could no longer safely keep the stock in my portfolio because I had no investment thesis that supported keeping it. I am not saying there wasn’t an investment thesis that supported it, just that I don’t have one. Moreover I am testing an investment strategy in this portfolio, so had I kept the stock it would have been as product of emotion, not of sound investing practice.
Today as the market dropped over 2%, HAST dropped over 17% to exactly the price sold at last week. Regret comes and goes. I have moved on to other investment prospects.
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