Chroma Investing

Value Investing for beginning & small time investors and the value investing strategies of Graham & Klarman

Mistakes in Investing

As yesterdays post on TGAL shows you, we all make mistakes in investing. The question isn’t whether we will make mistakes but how we respond to the mistakes we make. My response was to sell by position in TGAL this morning. Yesterday’s press release with Q3 financials changed my valuation of the company substantially, from one having a comfortable margin of safety, to one with none. Given that TGAL was also losing money made selling at a loss a cinch. I sold at $1.20/share plus $4.95 commission for a loss of $85. Be clear. I am not saying the stock will continue to go down. But the valuation proposition changes so much that it no longer looked like a good investment. When that happens, even if it is only after a matter of days. I sell. I am not in market to hope a company recovers. I am about preservation of capital first, then appreciation of capital. The important thing is to move on.

Tegal (TGAL) barely a NCAV stock – Do Not Buy

On Tuesday I bought 1400 shares of Tegal Corp (TGAL) for $1.25/share plus a $4.95 commission for a total investment of $1754.95. Subsequent to my purchase of their shares, the company has issued a press release which outlines their 2009 Q3 results, with dramatically different assent situation that Q2. I will review this situation as it currently exists and not as it existed when I bought it. I no longer recommend this stock. This is a good example of what can happen to a Net Net stock. They are volatile and valuations can change dramatically.

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