Editor’s note: This article was first published in August 2013, and the portfolio holdings and views it describes reflect that time. Several stocks named later collapsed: Gowex went bankrupt in 2014, Abengoa entered pre-insolvency in 2015 and Banco Popular was resolved and sold to Banco Santander for one euro in 2017. This is the author’s personal trading diary from August 2013, kept as a historical record; it is not investment advice. Several of the companies mentioned later collapsed: Gowex went bankrupt in 2014 after admitting that its accounts had been falsified, Banco Popular was resolved in 2017 and Abengoa went through insolvency proceedings from 2015 onwards.
Although I recommended some stocks for the long term, given a few pieces that don’t fit in the markets I have taken the risk of locking in profits on some of our stocks in case anything happens. Why spoil a juicy return? So, just in case…
On Banco Sabadell, Banco Popular and Abengoa I placed trailing stop-losses in case of sharp corrections, and in the case of Popular and Sabadell, the shares were sold today after both stocks fell sharply (-5.51% for Sabadell and -3.91% for Popular). Abengoa B is still rising for now, but it has a 3% trailing stop-loss. As you can see, I’m applying one of the pieces of advice I usually give: “Don’t sell rising stocks. Let the market sell them for you.”
I’m keeping my biggest exposure in Ezentis and Gowex, and a small block of shares in Deoleo.
New purchase
I have invested part of the profits in a biopharmaceutical company, Navidea Biopharmaceuticals, with a long-term view. Although it did not report good results in the first half of 2013, I believe it could be very successful with Lymphoseek, a recently approved drug that is already starting to be marketed and that promises good results against some types of cancer, as well as a drug for Alzheimer’s disease. There are also rumours that another of the company’s drugs could be approved soon. We will study this company in depth later on.
After studying the company’s accounts and reports, I believe it is worth taking the risk at $2.82 a share.
This week I will also be studying some of the hardest-hit companies on the Mercado Continuo (Spain’s continuous trading market) to see whether any of them might be worth it.
Why did I sell the rest of the shares?
Since I know some of you will ask why I sold Popular and Sabadell when I recommended them for the long term, I’ll take the opportunity to answer.
With Popular, I have been sitting on gains since the capital increase, and I was lucky enough to buy the rights at one of the lowest levels, so I think it’s too much profit to put at risk. As you know, I don’t trust such a bullish market in a country that is a complete mess any way you look at it, with plenty of dangers lurking. And it’s practically the same story with Sabadell. That doesn’t mean I’m not planning to put them back in the portfolio if they fall to a good buying level again.
And then there’s that blasted ego. Honestly, I’d like to beat the index and some big funds for the third year running, to show once again that you make more money by investing in the least recommended stocks at the very moment people are advising you against them.
Featured image: Kippelboy, CC BY-SA 3.0, via Wikimedia Commons.
