Monday, August 04, 2014

Biggest Enemy of Successful Investing

The Man In The Mirror

It is so difficult when investing to maintain conviction in the face of a decline stock price.  GTAT in the month of July dropped 30%.  When your largest holding drops like that, every day you think about selling it. You wonder whether people know something you do not know.  Tons of rumors:

Apple Might Not Use Sapphire, Short GT Advanced Technologies
Apple Supply Cuts Are Killing GT Advanced
GT Advanced Technologies Down Sharply On iPhone Production Concerns
GT-Apple accord questioned
GT Advanced faces bearish play

Toss in the fact that the CEO has been selling:

Insiders Are Selling at GT Advanced Technologies: What Should Investors Do?

And it is easy to lose conviction. Luckily I did not and it looks like the stocks should bounce nicely tomorrow on re-iterated guidance:

GTA Surges 13%: '14 Rev View Lower, EPS View Higher

Now I was not "brave". I did increase my share holdings by 28% during the drop - sadly nowhere near the bottom (I bought at $16.58).  But at least I held me shares.  I also bought back my call options, so if GTAT spikes above $22 in September, the gains are all mine.

So today was a solid day, I was virtually even with the markets. Tomorrow has the chance to be very good as I suspect GTAT could benefit from a short squeeze (40% of the available shares are shorted).  I hate to give advice, but readers might want to get in tonight or first thing tomorrow as 40% short is a lot of covering. Please do your own analysis as this type of play is always risky.


John Carney said...


Heading into your third year and looking at your MFI excellent returns, I would be interested in when do you start to believe?

The question is what % are you trusting in MFI and when do you increase your dollar percentage?

Marsh_Gerda said...


I do believe in MFI, though I do not expect to continue to outperform at my current level. My overall portfolio is pretty evenly split 25% in cash/dividend/discretionary and MFI.

I do not have an answer on when I would longer MFI, the other pieces are hanging in there as well. I may just make my dividend portfolio more MFI-like. For example, I am considering TNH, which was top 20 in my MFI list last week as a dividend pick. GPS is on many MFI screens as is TIME.

John Carney said...

I am 75% Permanent Portfolio for now as the low interest rate world has created a number of distortions.

Also this market has run for a long time.

I almost jumped yesterday to buy HRB and CSCO but guess I play along for a while on paper.

Thanks for this Blog and all of your work and persistence!

John Carney said...


If you look at the following link and excel spreadsheet you will see about 15 MFI stocks that make the list to be Champions or Contenders.