People are goofy. It never ceases to amaze.
I sold most of my GLH stock yesterday, and put out an advisory on Twitter saying so. Because that’s what the responsible person does in my position. If I tell you I bought some, I have to tell you when I sell some.
And, of course, the basement dwellers on the Stockhouse bullboards threw a party. Short sellers reveled in their ‘I told you so’ routines and long holders bitched about betrayal and weak hands.
They’re both wrong. I didn’t say I’m out of GLH, just that I’ve sold stock, and I didn’t say I sold because the company is crap, I specifically and deliberately said I sold because of ‘downward pressure on stock’ and ‘regulatory uncertainty.’
In other words, the market, and the regulators, are making life difficult for the company right now. And if anyone disagrees with that assessment, be they fan of the company or foe, I don’t know what to make of your outlook on the world because both situations are undeniably true.
I’ve been riding GLH for a long time and have long believed in the company enough to tie my reputation to it, as well as my personal finances. And the company, unfortunately, has taken a long ride downwards in terms of stock price, due to a variety of factors, some unforeseen, some goofy, some out of their control.
That happens sometimes. A good business gets a few loud naysayers, and early hands take a timeout while they wait for a few good financial results to get the thing buoyant, which drives it down more, which messes up a financing a bit, which drives more downward pressure.
So yesterday, with the company still under selling pressure from anonymous sellers, and with upcoming results likely to show the company is not yet break even (though far closer to it than previously seen), I’ve a feeling it’s going to be strained for a bit. So I took a break.
That’s not to say I won’t be back in. In fact, just a few weeks back I wrote about how I’d dropped out for a day, only to get back in the next day when it shed 10% and looked too good a deal to resist.
I think GLH’s business model is worthy. I think it will, in time, show itself to have been a smart play, as I’ve said all the way along. What happens between now and then covers a lot of ground, and I’ve no doubt I’ll own it again.
Maybe tomorrow. Maybe next week. Maybe the day after the upcoming results.
And maybe I’ll miss a big jump in the meantime and hate myself forever, or maybe I’ll get all my shares back at a 1/3 discount.
But the recent acquisition was costly and involves a company that, for regulatory reasons, can’t say much about its potential. Which hurts the stock. And the recent balls-up by the Oregon legislature, when they accidentally made the industry illegal for a month, didn’t help. So I’m stepping back a little and watching for a good reentry point.
Naysayers can dance around that any way they like, but smart investing doesn’t mean you’re black on a company or you’re white on a company, it means you figure out your long term beliefs on their likely success, take a long look at what the market is doing -right now- and decide if now’s a good entry point or a good exit.
And both of those should be temporary positions.
I think Bombardier is a total piece of crap company that only survives because lazy institutions buy it out of habit and some misplaced Canadian nationalism. But if it dropped to $0.25 tomorrow, I’d sure as hell buy a chunk in the belief it’d rise the following day. Would that make me a Bombardier homer or a smart investor? Answers on a postcard, thanks.
Buying and selling is not loving and hating. You’re not betraying your team doing one or the other. Your only master is your bank balance, and if the market is acting retarded when it comes to GLH, it’s smart to save your coins and wait until that sickness clears.
I think it will clear. But a few things need to shake out first, and I know the company is working hard to make that happen. In the meantime, I’m keeping that cash liquid and watching intently.
And, unfortunately, 140 characters on Twitter aren’t enough to say all of the above.
Watchlist.
–Chris Parry
http://www.twitter.com/chrisparry