The Buy and Hold model remains committed to identifying investments that represent good value and opportunity for capital appreciation. However, I continue to balance these goals with my own aversion to losses. In a volatile market this sometimes leads to short-term purchases that are unloaded as the stock or the market heads south.
For the month of September I added a new position to this model, Barrett Business Services (BBSI), but it became a victim of market volatility and I sold it shortly after the purchase to avoid a potential loss. Similarly, I attempted to edge back into Church and Dwight (CHD) this month but again found my revisit a little premature and unloaded this purchase to limit a possible loss.
Other stocks sold on weakness included Liquidity Services (LQDT), and Skyworks Solutions (SWKS) both of them, even though they have promising long-term ‘stories’ appeared to be developing into losing positions. On the other had, I also sold a small portion of my Lumber Liquidators (LL) position at a gain to reduce my growing exposure to that holding and lock in a small amount of profit as well.
IBM (IBM) was purchased on 9/11/12 at $202.81. FleetCor (FLT) was purchased on 9/12/12 at a cost of $44.00. Interxion Holdings (INXN) was purchased 9/20/12 at cost of $21.40, and Lancaster Colony (LANC),was purchased 9/17/12 at a cost of $72.85.
In managing this model, I continue to search for the very best of companies to own while I am still willing to sell any individual holding that fails to perform.
This fall will be a very big challenge for this portfolio and for the entire stock market in general. It is unnecessary to remind anyone of the peril of multiple challenges including the unknown of the upcoming national elections, the “fiscal cliff” in Congress, the debt ceiling challenge and the general problems facing the global economy especially in Euro-based nations.
It is my hope that the United States will continue to demonstrate greater resiliency than other economies worldwide and that the market will continue to climb this growing wall of worry. In the meantime, I shall try to be as nimble as possible to avoid peril by unloading equities that fail to live up to my own expectations.
Some of the investments discussed are held in client accounts as of September 30, 2012. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or that investment decisions we make in the future will be profitable.
