Remembrance of Stocks Past

One of my rules of investing is: “Never worry about what stocks do after you’ve sold them.” The stocks aren’t thinking of you, so why should you think of them? That’s a wise rule. Nevertheless, I’m ignoring it for the moment.

Each year, I add and delete five stocks to my 20-stock Buy List. As it turns out, the stocks I removed from the Buy List at the beginning of this year have done far better than their replacements.

Here are the five new stocks:

Company Ticker Symbol Price on 31-Dec Price on 8-Oct Profit
Gilead GILD $43.27 $36.33 -16.04%
Intel INTC $20.40 $19.52 -4.31%
Johnson & Johnson JNJ $64.41 $63.23 -1.83%
Reynolds American RAI $52.97 $58.73 10.87%
Wright Express WXS $31.86 $36.36 14.12%
Average 0.56%

Here are the five stocks I cut:

Company Ticker Symbol Price on 31-Dec Price on 8-Oct Profit
Ampehnol APH $46.18 $49.25 6.65%
Cognizant Technology CTSH $45.33 $64.20 41.63%
Donaldson DCI $42.54 $47.39 11.40%
Danaher DHR $37.60 $41.39 10.08%
FactSet Research FDS $65.87 $82.67 25.50%
Average 19.05%

Even though I limit myself to changing the portfolio by 25% just once per year, even that was too much. If I had made no changes at all, the Buy List would be up 11.59% instead of 6.97%.

OK, I’m going back to enforcing my rule. If anyone needs me, I’ll be pretending CTSH isn’t up 41% YTD.

Posted by on October 10th, 2010 at 3:57 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.