My first sale of 2019. Sales are always hard, especially when times are good and everything seems to be going well for the investment in question. Personally, I have a harder time timing the sales than timing the purchases. When things are rosy, we tend to feel that the good times will continue forever.
Human psyche & investing seem to always fight each other on this front. We buy/invest when we feel good and sell when we are depressed about our investment picks. This sale has been especially hard for me as it has been my best investment to date.
I sold 1/3 of my position in Kirkland Lake Gold (KL.TO) at CAD$35.70 and booked a 228.5% gain in the stock.
Kirkland Lake Gold is one of the most successful stories in the gold mining industry over the last couple of years. I was lucky enough to get in early when Kirkland Lake Gold merged with Newmarket Gold to form the leading mid-tier gold mining company — my first purchase was in Feb 2017 at $8.79! Over the years, I had been accumulating more shares and averaging up with my full position ending with an average cost basis of $10.97. As mentioned, this stock is by far my biggest winner to date 🙂
Recent Sell Decision
- The biggest reason is risk mitigation. Kirkland Lake formed a very large portion of my overall portfolio. I decided that I had to sell in order to reduce the concentration.
- After selling this portion, I have taken my initial investment + some profit off the table. I can now let the rest of the holding in KL free ride as my cost basis is essentially $0.
- Kirkland Lake is one of the best run companies in the space and everything is going right due to flawless execution by the management, including a positive atmosphere for gold and gold mining companies in the macro/investing world; which is hard to come by. As mentioned, its hard to sell when everything is going right and the good times appear to continue forever, but I am taking a contrarian approach here and selling to take some profits.
- I also noticed that Eric Sprott has started selling a few shares and taking some profits. Sprott is the largest individual shareholder and chairman of the board — and I will take my cue to follow suit from the insider and one of the best investors in the space.
I am in no way turning bearish on this stock. I still hold a sizable position and KL still continues to be the largest position in my portfolio. The outlook for KL, gold and gold mining sector is bright and I intend to let this winner run to see how far it goes. Who know…perhaps KL will turn from a mid-tier to one of the majors; as the industry is already undergoing consolidation.
Full Disclosure: Long KL. Our full list of holdings is available here.
Wow such a great return you received congrats. It’s always tough to sell a stock. I recently sold one as well. I look forward to seeing what you do next.
Thanks Matthew. Looking forward to finding some opportunities to deploy this cash in coming months.
R2R
Awesome stuff Sabeel! 230% return in less than 2.5 years is incredible.
In <2 years (started accumulating in Feb 2017) 🙂
Yup...its by far my best investment. Not gonna lie, luck played a big part 🙂
R2R
woot nice man. great profit I remember you mentioning how good they were at 18$ i decided to pass on them.
womp womp!
Congrats. are you gonna hold cash or redeploy it?
cheers man
You gotta take investment advise from strangers on the internet, Rob 😉
Haha…I remember when KL was around $16-17 and I was banging on the drums to buy. Luckily, my father-in-law decided to take a gamble and has doubled his money since. He just sold after doubling.
I am looking to deploy in the coming weeks/months. Still trying to narrow down my list to buy.
R2R
I remember you selecting Kirkland Gold in the stock picking challenge I had and you won if I remember correctly. Great pick.
Good to see you selling down to reduce risk. Nice paypacket to help you buy something else that will hopefully grow.
Cheers.
Yeah KL has been on fire and lots of large institutions have been moving in lately. You got some amazing grades and mines down there in Australia 🙂
R2R
Great gains R2R…228% in just under two years is awesome! Can’t blame you for wanting to lock in your profits. Way to go…Best wishes and continued success! AFFJ
Thanks AFFJ. Good to hear from you after a while. Hope things are well on your end.
R2R
R2R,
Great return in short period of time. I don’t like selling but that is a great return on your investment.
Cheers
Dividend Pursuit
Yeah its hard to sell, but cant complain after a 200%+ gain. Still hold a pretty big chunk of KL shares in my portfolio, so atleast I know that I am free riding it.
R2R