Recent Sell – Bank of Nova Scotia

Another sale from my portfolio. Regular readers may be aware that I have been liquidating a lot of my portfolio as this market enters the nosebleed section. Valuations are at all-time highs and the world of finance looks just as dangerous as last decade, if not worse. I am of the opinion that holding large positions of cash going into the next crisis is a better strategy than trying to stay invested and trying to squeeze out an extra 1% or 2% in dividends or capital gains.

Last week, I sold 45 shares in Bank of Nova Scotia (BNS.TO) @ C$71.00 and closed my position.

Recent Sell Decision

  • I have been selling for a variety of reasons — including market valuations, herd mentality from other investors, simplicity focus I desire and SWAN reasons. I have detailed all these thoughts in this post.
  • While the valuation of this particular stock is fine — its not overpriced by any measure, I decided to simplify my life and reducing the number of holdings. I want to follow a more concentrated approach to investing and betting big on a smaller set of companies.  So, the decision came down to whether I want to own two Canadian banks (the other one being Toronto-Dominion Bank (TD)), which have the similar exposures operating and competing with each other. After some consideration, I decided that I want to own just one. TD’s balance sheet, risk-profile and growth prospects are better in my opinion. This led me to decide to liquidate BNS and exit the position.

Total profit (including dividends during holding period of ~2 years): 12.47%

Full Disclosure: Long TD. Our full list of holdings is available here.

Recent Sell – Realty Income Corp

Realty Income

As most regular readers are aware, I have been liquidating some of my holdings lately. This has been driven by a few different reasons – driven by a combination of market conditions, complacency in the market, lack of belief in individual holdings, the yearn for simplicity provided by index funds etc. Some of these reasons have been summarized in this post. This post captures another recent sell in my portfolio.

As the market continues to hover around all time highs, I have been thinking more about investor psychology and introspecting my own mentality. Recently I posted an article entitled “Do You Love Your Investment Holdings?” detailing how investors can fall in love with a holding and try to justify it even when the evidence points to investors to come to different conclusions instead. This can be driven by familiarity and a bias that comes with ownership of shares in a company for a prolonged period of time. This is a common pitfall that investors fall for and I came to the conclusion that I was facing the same issue with this holding. While this particular company is one that I didn’t quite love, I have noticed that most investors in the community seem to love it thanks for the dividends.

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Recent Sell – Qualcomm Inc

As most regular readers are aware, I have been liquidating some of my holdings lately. This has been driven by a few different reasons – driven by a combination of market conditions, complacency in the market, lack of belief in individual holdings, the yearn for simplicity provided by index funds etc. Some of these reasons have been summarized in this post. This post captures another recent sell in my portfolio.

As the market continues to hover around all time highs, I have been thinking more about investor psychology and introspecting my own mentality. Recently I posted an article entitled “Do You Love Your Investment Holdings?” detailing how investors can fall in love with a holding and try to justify it even when the evidence points to investors to come to different conclusions instead. This can be driven by familiarity and a bias that comes with ownership of shares in a company for a prolonged period of time. This is a common pitfall that investors fall for and I came to the conclusion that I was facing the same issue with this holding. Coming to this realization, I decided to sell my shares and exit this investment.

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Option Assignment – IAMGold Corp

A closure in my portfolio — my covered call option that I wrote in June 2016 got called away closing my position in IAMGold Corp (IMG.TO). Its a company that I have held in my portfolio for a long time (approx 3 & 1/4 years) – through the depths of the gold & precious metals bear market. Now that the prices have recovered, I wanted to upgrade the quality of my gold mining company holding. IAMGold is a decent company, but has its problems with some management issues. There are better companies out there and I decided to upgrade with the purchase of B2Gold Corp (BTO.TO) last month.

Overall gains (including dividends and options premiums): 28%

Option Assignment – The Jean Coutu Group

Another position exits my portfolio. Earlier in the month, I had written a covered call option on The Jean Coutu Group (PJC.A.TO). The option expired on Friday Jul 15, 2016 with the stock ending up in-the-money, which resulted in the stock getting called away. I owned PJC.A.TO for approximately two and a half years and the company has traded sideways during the duration, although it reached a high of mid-$20s about a year ago.

I still believe in the long term growth of PJC and sad to see this stock get called away, but its a risk you take with options trading. Making a decent profit and staying in cash during these volatile times isn’t so bad I suppose…so I’m not complaining.

Overall gains (including dividends and option premiums): 17.88%