Buys, Sells and other Monkee Portfolio Updates

Buys, Sells and other Monkee Portfolio Updates
Before I left on my week for the woods, I executed a few trades in the Monkee Portfolio. Note that this many trades is a rare event in my investment approach. I don’t blindly buy companies (thanks to the Motley Fool newsletters) but I don’t sell without good reason either.

First off was I sold a portion of my Netflix (NFLX) holdings. I did this on my own without any sale notice from the Motley Fool Stock Advisor (MFSA). First a little background. I bought on the newsletter’s recommendation and built up what I consider a full position. When the price fell I decided to go overweight on it and increase my holdings by 50%. That move was on my own but it was reinforced by the fact that NFLX was recommended more than once by MFSA. The move paid off very well as I’ve more than tripled my initial investment.

As the price bounced around in the mid $40s, I started having questions about valuation and how much of my portfolio it took up. NFLX made up 26% of my investments (not including 401k). As I glanced at the pricing metrics (P/E, earnings, etc.) I felt okay with the current price. While the valuation might be high, for a growing company like NFLX sometimes the P/E runs high. While the price wasn’t screaming buy, I wasn’t so nervous about losing value. So I decided to take some of the gains off the table. I sold an amount equal to my initial investment in NFLX including the 50% I went overweight on. I’ll give my reasoning on the amount sold after I go over my other trades.

I sold off my entire holding of MVC Capital (MVC) on a recommendation from the Motley Fool’s Hidden Gems (HG). In fairness to those who pay for it and the Motley Fool who charges for the service, I won’t go into detail. MVC invests in small and diverse private businesses. They facilitate private funding for those companies and receive ownership and other future considerations as well as making loans to these compaines. How MVC issues a valuation to the individual companies and sum it up to come with a net asset value (NAV) is cloudy. No third party audits the findings. Thus the Fool decided to sell and look for more transparent companies to invest in. One thing must be said. This is not a knock on the company. They maybe telling the truth. It’s just without an outside auditor it’s hard to feel comfortable with money invested with them when NAV almost always seems to be above the stock price.

In addition to the sells, I also made two buys. I bought shares to close out my accumulation of KHD Humboldt Wedag and the same with Dolby. I now own full positions of shares in my portfolio.

What to do with sell proceed?
That is the question I ask myself while trying to figure out a sale. Typically I’d roll it to the brokerage account until I decide my next investments. Not so this time.

Note: I will update this entry in the next couple of days to complete my reasons for selling Netflix and explain what I plan on doing next.