Eileen's picks

The whys of some sells

Rating: 1.55 not yet rated(11 votes)    Vote:

You are logged in as | Logout

The rules of the contest dictated a couple of the sales I've made, and reading the very comprehensive post of REITS Investor glang led me to another.

My first experience with the SELL WIZARD came when my exchange-traded funds grew more quickly than I expected. Because Marketocracy mutual funds go out of compliance if they have more than 25% of assets in exchange-traded funds, I watch that along with my asset type and sector diversification numbers.

When my ETF number exceeded 25%, I looked for which to sell. The total amount to sell was dictated by getting back to 20% of the total, which meant selling $53,500. First to go was all of UDN because its potential to generate gains is too low to justify it occupying valuable "space".
Being $20,000 over plan in small cap stocks made selling down that amount of PYH the next move. The balance was to have come from what has become my heavily over-weighted mid cap area.

Numerous attempts to sell $30,000 worth of IWP have been foiled by problems Marketocracy is having. Thankfully, they are exempting those of us whose ETFs won't sell from being penalized for non-compliance, because this is the third week when IWP simply won't sell. An odd feeling to know I'm shackled to it even though the system I use would only generate relatively small sells and buys after the original purchase anyway because IWP is a core holding.

As I mentioned at the beginning of the competition, I have been using a portion of my holding in Brookfield Asset Management (BAM) to represent the asset category of real estate. Reading George's post here and more on the Marketocracy forum helped me feel more comfortable with real estate and REITS, and I've been following some of the REITS George recommends since early September.

SL Green Realty Corporation rose to the top for me.

Morningstar rates it Growth A+, Profitability A, Financial Health A+. MSN's Stock Scouter says
Pro -- Earnings growth in the past year has accelerated moderately compared to earnings growth in the past three years. Positive The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe. Very positive for a medium- to large-sized company like SLG Con -- The price-to-earnings multiple is higher than the average for all stocks in the StockScouter universe. Negative Shares are being heavily sold by financial institutions. Neutral for a large company like SLG

Today I decided I had thought about it enough. When I saw that BAM as making a nice move up, I sold $60,000 worth of it (the current allocation for real estate in my portfolio) for what would be a tax loss to 4.33% in an actual trust account.

Because SLG is already below what it's traded for during any time in the last year, I looked at the two year picture to see what it might pull back to if it's hit by whatever happens with the Fed next week or with October tax loss selling. I find Yahoo Finances advanced charts especially useful for this purpose. I decided on a target purchase price of $98 a share.

My intention is to make the same move in my real portfolio, substituting SLG for ICF, the REITS exchange-traded fund I use for my real estate allocation, when buying to replenish the real estate allocation that is -- as you would expect -- currently well under plan.

Thanks George!