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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Amazon = US GDP 1970

Amazon joined Apple in reaching a $1 trillion market capitalization. $1 trillion is about the same as the total value of New York City property and the total value of loans at JP Morgan, the nation’s largest bank in terms of assets. Jeff Bezos’ $160 billion stake would place him (personally) as the #33 largest company in the S&P 500 in terms of market cap, next to Coca-Cola, Disney and Netflix. We aren’t bold enough to predict whether the shares will continue upwards or if they are in a bubble reaching maximum inflation. Setting aside for a moment their investment prospects, let’s admire the truly remarkable milestone that these two companies have reached. Read More.

EV/EBITDA: What Is It & Why Are We Using It More?

In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple.  We thought it might be useful to describe this measure and why we like it.

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."