I normally do not sell the securities that I’ve purchased in my Portfolios as I’m into it for a very long haul and buy them only after careful consideration, unless, there are some exceptional circumstances as below:
- A significant drop or total elimination of dividends
- A display of inappropriateness by the company, be it management, or otherwise
- An apparent fraud or even outright cooking of accounting books
On Nov 23, I’d published a post where I made a bold move to buy additional 100 positions in American Realty Capital Properties, Inc. (ARCP) and I’d felt at that time that the management would be able to sort out all issues soon and it will be a great comeback story. However, things took a turn for worse for the company with the departure of top management including CEO, CFO and COO. If loss of one senior executive is not bad enough to indicate troubles within a company, loss of top layer executives was a hammer blow in my opinion in any aspects of running a company smoothly. In order to right this ship, it could take a long time to fix the accounting issues, settle lawsuits and other potential undiscovered issues, longer than I can wait for 😉
Initially, I thought of selling all my 175 positions, however, I finally settled to sell 100 positions and kept remaining 75 positions until further scrutiny. If the hoped for turn-around does start to appear on the near horizon, it will reward me handsomely and if there are appearances of further deterioration in the health of this company, I may completely exit my remaining 75 positions.
I sold 100 positions at $8.08 on Dec 17 and this reduces my dividends by $100.00 for next year. I’ll be looking to buy other high quality securities to add to my total passive income. The seriousness of this sale can be gauged from the fact that this is my only single post on sale for this year of 2014.
What do you think about my sale ? Did you sell all or kept some positions for potential turn-around?
Full Disclosure: Holds remaining 75 positions in ARCP.
Thanks for reading.