Turnaround Investing Blog

George Putnam, one of the country's leading turnaround and distressed investing professionals, shares his timely insight on the economy and turnaround investing opportunities.

A Reader Asks, "When is the best time to sell?"

I often find selling harder than buying. You should periodically review each position in your portfolio and ask yourself the following questions:

1) Has this stock achieved the goals you had in mind when you bought it?  If the answer is “yes,” go to question number 3; if it is “no,” go to question number 2.

2) Has something changed that makes your original thesis in buying the stock unlikely? If the answer is “yes,” you should seriously consider selling it; if it is “no,” that often means you should continue to hold the stock.

3) Are there new factors that have arisen since you formed your purchase decision that are likely to make the stock go higher? If “no,” then perhaps you should sell; if “yes,” you may want to continue to hold.

Of course, these are just generalizations. Every situation is different, and there are many other questions to ask, including “Do I need the cash for something else?” and “Is there a tax consideration that would make me want to sell now?” 

(Question submitted by Dr. Mike)

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IBM: Not Yet Time to Swing at this Pitch

IBM’s stock underperformance since IBM’s current CEO took the helm in 2012 has been stark, with the shares declining 23% while the S&P500 Index has more than doubled. One big problem: revenue growth rate is zero, at best. Without revenue growth, what’s left to entice investors? The real driver of value at IBM – free cash flow that is used to repurchase shares. Can IBM borrow its way to shareholder prosperity as its cash flows shrink? What to do with IBM shares? Wait for a better pitch in the form of a catalyst or much lower valuation. Read More.

Comparing Stocks Vs. Bonds

While the common stock of a turnaround candidate usually has the greatest upside potential, other classes of securities, such as bonds or preferred stock, may offer attractive profit possibilities with less risk. Many turnaround companies have only one class of securities available to investors but where there are different classes to choose from, it can pay to do a little extra analysis of the various options.

Read More.

Turnaround Letter Stock Pick Named Top Performer of 2017


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What Last Year's Top Stock Pickers Are Buying in 2018


This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.


George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."