All's Quiet on the Monkee Portfolio Front

I haven't posted lately because I've been very inactive with my portfolio lately.

My latest move was a sale of Umpqua Holdings Corporation (UMPQ). I don't have the exact numbers yet but it was around a 50% loss. I sold on a recommendation from one of the Motley Fool newsletters I subscribed to.

In short, the recommendation was based on the regional bank's exposure to commercial real estate. The Fool believed that UMPQ was sufficiently capitalized to weather the mortgage bubble and conservatively lent money to home owners. They feel, however, that isn't the case with the banks commercial real estate portfolio. While they don't think it will break the bank, they don't feel the risk outweighs the benefits anymore. Better to cut losses now and look for other places to invest with what remains.

One thing the Fool preaches is to learn from all your investments. Especially to learn from the mistakes so you won't repeat them. The Fool made the call to invest in UMPQ in 2007 before the housing bubble bursting. Even after it hit they recommended to hold. Did they make a mistake in recommending the stock? Obviously yes or else I wouldn't be looking at a 50% loss. However, small or regional banks can pay off big. Unfortunately no one saw the damage coming in the economy. I saw a housing bubble but I had no idea it would affect the economy like this. So I really can't fault the Fool for the losses. The don't guarantee success.

One other recommendation is to diversify over different stocks and sectors. Buy the best. No one will be perfect in the market but you can minimize your exposure. My portfolio contains eighteen stocks after the UMPQ sale. Of the remaining stocks, eight are in the black. Three of the winners are up significantly. BWLD is up over 150%, NFLX over 200% and CTRP over 150%. My point is even with a significant loss in UMPQ I still am in the black. Those three stocks have more the held up my portfolio through the rough economy.

In the future I expect some losses due to the inherent risk in investing. However, if I make my selections and vet them well, I expect my returns to outweigh my losses over the long haul.

One last note on my inactivity. I transferred jobs within my company. So there was a lack of overtime in my new assignment lately. My investing policy is to use only extra cash. Usually that means overtime money goes to savings and investments. Lately though it's just been paying bills and car repairs. If I didn't have the car repairs I'd probably be more active. I have some extra cash this month so I'll be making some buys soon. When I do I will post my selections.