Let me first be clear, I am in no way calling Robert Freedland stupid. But hey, the title caught your attention didnt it 
I have never claimed to be an investing genius, mogul, guru, whatever you call those people that sit at the penthouses of skyscrapers and invest hundreds of millions in the stock market. I am a regular reader of SeekingAlpha.com - a financial website about investing, ETFs, stock market and a ton of valuable articles and columns. But sometimes, even the an amateur investor like myself asks the question “WTF?!?!”
That was the exact reaction, actually the only word I could think off when I read an article by Robert Freedland, who supposedly is also an amateur investor, but has quite an impressive background.
Robert Freedland is a medical professional by trade and an amateur investor who has been blogging on Stock Pick Bob’s Advice since 2003. He has been investing in the stock market for 40 years, having made his first purchase at the age of 13 of five shares of Global Marine in September 1967. He enjoys sharing his philosophy and perspective on investing, both by blogging and podcasting.
So, Mr. Freedland, as it appears has about 35 years of investing experience more than I - and in today’s column, he writes “Visa: Why I Sold All of My Shares.” Just last week, I explained why Visa stock is an excellent investment, but I guess my lowly reasons weren’t good enough.
Let’s explore the wisdom, or lack thereof, of Robert’s journey in-and-out of his Visa stocks. It all began on May 29th when:
On May 29, 2008, after a partial sale of Copart (CPRT) on a gain, I purchased 70 shares of Visa (V) at a cost basis of $86.03.
Excellent Mr. Freedland. You saw the potential in Visa as an investment - long term I hope? But wait…what’s this? Pressure to sell??? on June 11th, he reports that
…Visa shares were selling off…
When they passed my 8% loss level, I initiated a sale and sold all 70 shares at $78.99. This worked out to a loss of $7.04 or 8.2% since purchase.
So let’s do the math. $7.04 per share loss, equals to 70 (yes, that’s all he bought!) X $7.04 = a whopping $492.80. For someone who has invested in the market for 40 years, you must know something others don’t if you’re selling off and willing to take a $500 loss on a company like Visa.
This is probably one of the worse columns I have read on SeekingAlpha.com - albeit the worse advice to investors everywhere! There’s no logical or rational reasoning behind this 8% selloff. If it was a speculative or questionable investment, then the 8% would make more sense. But even then, big companies like Google have declined more than 8% or lesser news.
Oh, by the way, Robert also states that
Without anything fundamentally wrong with the stock, but with my own sale of shares, VISA (V) IS RATED A HOLD.
So why the sell off???? Are you mad? Are you a genius? Or are you simply confused with your investments?
Feel free to waste 2 minutes of your life on his article here.
5 Comments
WTF Derek.
Investing is complex. You can focus in on an individual stock and go for it, or you can have a broader view and view individual stocks as vehicles for possible gain.
As an investor, it is imperative to limit losses. You can choose to do it however you would like, but I choose to limit my own losses to 8% levels.
Thus, when my Visa stock dipped to an 8% loss, I sold it.
Yes.
Sold it.
I dropped my “rating” to a hold BECAUSE I sold it. It wouldn’t be ethical to leave it at a “buy” after I had personally sold it would it? And yet, like you say, the fundamentals hadn’t changed, just a dip in the stock price.
So that is why I changed the rating to a “hold”.
I regret that you feel that your wisdom doesn’t entail considering the management of your entire portfolio.
My trading rules require it.
I don’t fall in love with any stock. I don’t use my intuition, I don’t use my hunch. I use my brain.
I treat all of my holdings the same way.
I sell them quickly if they dip after an initial purchase, or I sell them partially and slowly after they appreciate.
I would invite you to participate (if you don’t already) over at Covestor.com and share with the world your own performance on all of your trades. And your rationale.
I would also like to encourage you to read through my blog so that you can understand my own thinking about stocks before you dismiss me as a wasted 2 minutes of your time.
If you own Visa (V) then I wish you well. I do believe the outlook for this stock may well be excellent. But my own personal trading rules over-ride my instinct, my gut, my intuition, and my love for any investment.
I do not believe I shall have the very best record. I am just looking to do better than just random chance.
Thanks for the WTF.
Robert Freedland
I hardly call Visa a random chance. And it’s a little contradictory that you would say “I do believe the outlook for this stock may well be excellent.” - and then “I am just looking to do better than just random chance.”
Limit losses is prudent when it comes to day trading. But investing is entirely different than trading. Your actions appear to be more trading then investing.
What made me most uncomfortable with your column is the potential of misleading beginners to think that it’s an investing advice - but in reality - you were day-trading the Visa stock.
I’m glad you are able to stick to your guns, but on Visa?
If Visa has such an excellent future, when why sell it on the dip, instead of averaging down? There’s definitely a huge difference between being in love with a stock and investing in opportunities.
“I would invite you to participate (if you don’t already) over at Covestor.com and share with the world your own performance on all of your trades. And your rationale.” - I just might
And when I say “wasted 2 minutes” - as someone who prefers to average down on dips, especially with a stock like Visa, I think that’s a fair assessment - on a personal level. However, I did find your article entertaining because SeekingAlpha.com published it - so it must have had some sort of investing logic to flip Visa in such a short time frame.
Don’t you think you have guaranteed your losses by selling on such temporary dips, but I do wish you well in future trades.
I totally get your 8% rule, and at some level, respect it since that’s the magic number that many investors follow. But, I still like following Warren Buffet’s investing principles - especially when he says to “understand the company you invest in” and “long term approach.”
So, “WTF” might have been harsh - but that gets my point across right?
And, if it’s worth anything, I get your point as well.
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