Housekeeping: rejected, sold and forgotten
Some weeks ago, there was a very good post over at Barel Karsan. I think he hit exactly the right spot here:
Some time after you’ve purchased a stock, you probably have a pretty good idea as to whether you made a good decision or not. This is because you likely follow the stocks you have purchased fairly closely. This feedback mechanism allows you to fine-tune your stock purchase criteria so that you don’t make the same mistakes again. But often, some of the best lessons to be learned come from the stocks you didn’t buy, but considered buying!
I would even add to this, that one should also still try to follow the stocks one has sold in order to find out if the selling decision has added value or not.
So I built up two tracking lists. The first list consists of the stocks which were in the portfolio at one pint in time but sold. I want to track the relative perfomance of the stock and the benchmark since the sale.
Tracking list stocks sold
| Stock | Date | Sale price | Current | Perf | Perf BM | Delta |
|---|---|---|---|---|---|---|
| Ensco | 23.02.11 | 53.12 | 56.5 | 6.4% | -5.0% | -11.4% |
| Sysco | 08.04.11 | 28.0 | 29.8 | 6.3% | -6.7% | -12.9% |
| Apogee | 19.05.11 | 9.4 | 13.0 | 38.1% | -7.3% | -45.4% |
| ENI | 13.07.11 | 15.7 | 17.6 | 12.3% | -5.6% | -17.9% |
| Tesco | 15.07.11 | 403.0 | 314.1 | -22.0% | -4.5% | 17.5% |
| Tsakos | 20.07.11 | 9.3 | 6.6 | -28.7% | -4.8% | 23.8% |
| DEGI International | 09.08.11 | 27.8 | 29.8 | 7.4% | 14.9% | 7.5% |
| CS Euroreal | 09.08.11 | 51.9 | 41.6 | -19.8% | 14.9% | 34.7% |
| Axa Immoinvest | 09.08.11 | 37.3 | 27.6 | -26.0% | 14.9% | 40.9% |
| Pargesa | 17.08.11 | 63.9 | 66.5 | 4.0% | 12.8% | 8.9% |
| Medtronic | 17.08.11 | 32.2 | 38.1 | 18.4% | 12.8% | -5.6% |
| Beneton | 17.08.11 | 4.6 | 4.6 | -0.3% | 12.8% | 13.1% |
| Noble | 17.08.11 | 31.64 | 39.1 | 23.5% | 12.8% | -10.7% |
| Bijou | 31.08.11 | 63.5 | 70.6 | 11.1% | 13.9% | 2.8% |
| RWE | 27.09.11 | 27.8 | 35.2 | 26.5% | 19.2% | -7.3% |
| Einhell | 02.11.11 | 32.3 | 33.0 | 2.1% | 14.2% | 12.1% |
| Microsoft | 09.12.11 | 25.1 | 32.0 | 27.4% | 13.4% | -14.0% |
| Frosta | 03.01.12 | 16.7 | 18.0 | 7.7% | 9.7% | 1.9% |
| Westag | 03.01.12 | 18.3 | 17.1 | -6.7% | 9.7% | 16.3% |
| Magyar | 24.02.12 | 2.0 | 1.9 | -5.6% | -0.3% | 5.3% |
| KSB vz | 15.02.12 | 439.9 | 435.9 | -0.9% | 0.9% | 1.8% |
| Autostrada | 06.03.12 | 6.3 | 5.9 | -6.3% | 3.4% | 9.7% |
| Avg | 4.7% |
A negative delta means the stock has outperformed since I have sold it, positive delta means the benchamrk has performed better. On avarage one can see that the sell decisions added value, outperforming the benchmark based on this simple measure by ~4.7%.
Analysed but rejected stocks
| Stock | Date | Sale price | Current | Perf | Perf BM | Delta |
|---|---|---|---|---|---|---|
| Ameron | 10.03.11 | 69.8 | 85.0 | 21.8% | -4.0% | -25.8% |
| UPM | 16.11.11 | 8.2 | 10.4 | 27.5% | 14.8% | -12.7% |
| Home Retail | 30.08.11 | 122.5 | 104.1 | -15.0% | 17.1% | 32.2% |
| Hewlett Packard | 22.08.11 | 24.5 | 24.6 | 0.8% | 21.5% | 20.7% |
| Delta Lloyd | 15.04.11 | 17.7 | 13.4 | -24.3% | -5.3% | 19.0% |
| Esso SAF | 06.12.11 | 63.4 | 75.5 | 19.1% | 12.2% | -6.9% |
| April | 05.01.12 | 11.5 | 15.7 | 37.2% | 11.5% | -25.7% |
| Creston | 03.02.12 | 49.8 | 60.0 | 20.6% | 0.4% | -20.2% |
| Nintendo | 10.02.12 | 10830.0 | 11380.0 | 5.1% | 1.8% | -3.3% |
| Lingotes | 24.02.12 | 3.0 | 3.0 | 0.0% | -0.3% | -0.3% |
| Colefax | 08.03.12 | 223.0 | 223.0 | 0.0% | 0.0% | 0.0% |
| Avg | -2.1% |
Here, the rejected stocks have performed on average better than the benchmark. Of course I can not say if they performed better than the portfolio, but it tells me that my “filtering” at least throws out interesting stocks even if I do not finally buy them.
In parallel I try to keep a record why I sold them and why I didn’t buy them, but in theory I can search in my blog as well. This is by the wy one of the really nice things about blogging.
Summary: I think it is a great exercise to look at “past” stocks and keep an eye on them. There might be the time when they become interesting again and “refreshing” old knowledge is much easier than starting from the beginning.
value and opportunity 
#nate,
this is something interesting. I thought about adding “tracking” shares as well.
On the other hand I only manage to closely follow a limited amount of shares (25-30 in my case).
mmi
This is an excellent exercise, I try to do it quarterly and the results are somewhat surprising. Usually there will be a company that has shot up, and I usually didn’t love the company, but didn’t hate it either. I need to get better at researching “neutral” feeling stocks.
I think this is the reason some investors advocate buying a small tracking positions. Just a few shares so you start to follow the news.