Seemingly there is nothing going on at my blog. Yeah I didn’t write for more than week, but it doesn’t mean I am not developing my blog. First of all I added a new section – trading. I thought a lot how should I name it, because it is not strictly for trading. I decided to make a simple table with performance of companies over last 7 days, 1 month, 1 quarter and 1 year. I think this is useful to monitor which high quality stocks dropped and might be a good investment idea. I hope you will like it and within next months I think I will add many other useful features.
For now performance of my small performance is quite good. Both WMT and ADM are well performing (on average 14% up + dividends) and I am wondering what should I do. On one hand trend is your friend and I see no reason to liquidate positions (my investment horizon is very long). Moreover share price is still below last year highs, so I see some upside potential. On the other hand relatively to other shares these two are performing quite well. Would I buy WMT/ADM at current price? No, rather not as it is 14% above my investable level (level when I see low risk to return ratio). But valuation is not super high, dividend yield decent (nothing special, but higher than for S&P500). And finally if I sell WMT/ADM where should I invest my money?
So, by now I will not sell them, but I see I need to create opposite metrics to investable level, namely take profit level. Then with such levels managing my position should be so much easier and I shouldn’t be biased by current events. I think that Wal-Mart shouldn’t be traded with multiples higher than 10 times EBITDA, or pay dividend yield lower than S&P500 etc. On the other hand Dividend Aristocrats are long term growing companies and maybe taking profit only when shares are at all-time highs is a good idea… definitely I should think about it.
As this concerns only positions in my portfolio (take profit level is not useful for companies I don’t have) I will think about updating investable level and creating take-profit level when analyzing next quarterly results. I think it is important to monitor my investments and I plan to do it regularly.