To say that the month of October 2012 was a difficult month for the market would be an understatement. One of my own priorities for this model is conservation of principal, and I am very loss averse. This sometimes has resulted in me walking away from positions that later rebounded, but I do not wish to be holding on to positions as profits and value evaporate.
During the month, I parted company with Apple (AAPL). I still like Apple, and I am sure I will be looking for a re-entry into this position, but I try to avoid depending on emotions, and rather let the stock performance dictate my own actions.
On October 1, I purchased shares of Barrett Business Services (BBSI) but sold these shares on October 9th as the market weakened. This particular stock reported strong earnings on October 23rd and the stock rebounded.
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Ecolab (ECL) became a holding in this model on October 15th. The company services healthcare, foodservice, industrial and energy products with cleaning supplies.
Towards the end of the month, I closed out another favorite holding of mine as the stock showed weakness -- Hibbett (HIBB) was sold October 26th. International Business Machines (IBM) was sold on October 18th, Interxion Holding NV (INXN) was sold October 25th, Lancaster (LANC) was sold on October 22nd, SolarWinds (SWI) was sold on October 18th, Transdigm (TDG) was sold October 23, and TJ Maxx (TJX) was sold October 25.
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The other stock that was acquired during the month was eBay (EBAY), added to the model October 26th.
At the end of October, the Buy and Hold Model had positions in Cardtronics (CATM), Colgate (CL), Disney (DIS), eBay (EBAY), Ecolab (ECL), FleetCor Technologies (FLT), General Electric (GE), Lumber Liquidators (LL), PetSmart (PETM), SBA Communications (SBAC), The Fresh Market (TFM), and Visa (V). In addition the model had a growing holding in cash.
I offer my own thoughts and prayers to all who might have been hit by the destructive Sandy. I am afraid that financial markets may yet be hit by the effects of the real perfect storm, as well as the growing clouds of the Financial Perfect Storm, as budget sequestration, the expiring Bush tax cuts, and the debt ceiling all seem to be taking direct aim at Wall Street.
With that in mind, I remain cautiously optimistic into 2013 -- after we get through this storm both literally and figuratively.
The investments discussed are held in client accounts as of October 31, 2012. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or that investment decisions we make in the future will be profitable.
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Robert has over 40 years of investment experience and is a full-time optical surgeon. He uses his expertise in the…