We are in correction territory with the ongoing fall in the equity markets. During the ongoing selloff, I decided that I needed to shed a couple of the names that I had been considering for a long time before things went even deeper in the red. This is part of the portfolio cleanup that I’ve been working on and this iteration includes two recent sales.
First sale: A company that has lagged and severely underperformed in my portfolio even though on the surface it looks promising and has good assets. I decided to exit my position in Fairfax India Holdings (FIH.U.TO). The stock has not performed at all over the past few years and continues to trade below book value.
Total loss = 24.6% (holding period = ~2.4 yrs)
Second sale: I closed my position in Novo Resources (NVO.V). This one is probably my biggest mistake when it comes to position sizing — a lesson learned the hard way. Instead of employing a slower buying process, I went in heavy handed and bought too much right at the top of the hype cycle. While the gold exploration story may still play out, I decided to exit this position and take the loss. I may still benefit if good news does come from Novo in the future, since Kirkland Lake Gold has a stake in the company, so I will have some indirect interest in this exploration play.
Total loss = 65.5% (holding period = ~2.3 yrs)
It’s never easy to book a loss, especially the big ones. But that is the nature of investing. You can’t always have winners and you end up with some losers from time to time. Here’s to hoping that I pick better next time.
Full Disclosure: Our full list of holdings is available here.