Reluctantly, I’m selling Nestle out of Jubak’s Picks
This is a tough one.
Nestle (NSRGY) has hit the $69 target price—and then a bit–I set when I added the shares to my Jubak’s Picks portfolio http://jubakpicks.com/the-jubak-picks/ on September 21, 2012 at $63.75. The stock traded at $70.35 as of 1:45 p.m. New York time on February 6. That’s a 10.3% gain on this position in a little less than 5 months.
In my January 25 post on trading strategies for a momentum market I noted that it’s important to keep notes in your trading diary on how aggressive you think your assumptions were when you set an initial target price for a stock and I used Nestle as an example http://jubakpicks.com/2013/01/25/todays-market-is-ruled-by-two-different-types-of-momentum-heres-how-to-navigate/ . My original assumptions, I felt then, were pretty aggressive back in September. That suggests to me that I shouldn’t just go ahead and raise the target price just to keep this position.
This says, “sell” to me here.
The only caveat is that Nestle pays its 3% dividend just once a year a few days after the annual meeting. In 2013 that meeting is scheduled for April 11. So selling now means you give up a year’s dividend.
The decision on sell now or wait until April 15 or so comes down to how you read the risk in the current market. Frankly EuroZone politics make me nervous right now—with Berlusconi closing the gap before Italian elections on February 24 and 25, and a slush-fund scandal in Spain moving to the courts and a special prosecutor. (The “optimists” on Spanish markets say that since the Spanish courts operate at glacial speed, the move to the courts is actually a positive development. Although I respect that judgment, I find it slight support for Spain’s markets.)
My call is to sell Nestle now and take my profit so I’m selling the shares out of Jubak’s Picks today. If your read on European markets is more positive than mine, you’re likely to decide to hold on for the dividend.
Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/, may or may not now own positions in any stock mentioned in this post. The fund did not own shares of Nestle as of the end of September. For a full list of the stocks in the fund as of the end of September see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/
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Perhaps there is a typo on the return on Nestle. Should be way more than 1.03%.
Actually, your profit was not 1.03%. Move the decimal out one place — it’s 10.3%. Congrats!
Well for once you didn’t lose your, er, buttocks.
Oh, I’m so sorry!
YOU don’t invest in your own portfolio, do you, Jimmy boy?
Wise choice!
mwp2634,
Can’t make you happy it seems. If I lose money, you’re unhappy. If I make money, you’re unhappy.
To clarify the only important point in your comment, I have all my personal money in my mutual fund. I moved out of individual stocks when I started the fund. I’ve changed the wording in the disclaimer to clarify that.
n and ken–yes, there is a decimal point error and the gain is north of 10%. Simple typo that neither spell check on my eyeballs picked up. Thanks for the catch
YOU don’t invest in your own portfolio, do you, Jimmy boy?
Wise choice!
—
If you don’t like the product, don’t use it . . . heavens knows there are plenty of other choices. If you lost money here, who do think has the real responsibility for that? And I don’t know where the name calling fits in, at all.
To hold or not to hold…that is the question. It depends on where the S&P is in April…or should I say March. 1550 or above…Sell! We’ll be due for a correction if we make it that far. You might want to read the tea leaves for yourself.
Jim,
Been recently going through the articles on this site and definitely see that the information here is informative.
I and a few others have asked a few questions earlier such as – updates on some stocks in your portfolio that are now priced at near your purchase price or are now lower than that, would it be prudent to purchase some more to lower average cost etc. For new people, does this provide an opportunity to get the stocks in your portfolio?
However, you seem to respond more often to mwp2634′s comments. You were right in one article to point that this user has never provided either a basis for his negative reviews nor has the user (in all the articles that I’ve seen so far) provided any analysis other than the fact that you do not invest in your portfolio but have everything in your mutual fund.
So my question is why would you respond to mwp2634 (and just get upset) when you can respond to questions like mine which actually pertains to the portfolio?