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Slicing an apple
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- Lemon Slice
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Slicing an apple
On Friday I top sliced sold Apple for the first time, selling just under a third of my holding and recouping almost all my cost. It's been a wonderful investment but it doesn't look inexpensive anymore and had become an over-sized second largest position. It gives me the chance to rebalance and invest in some positions that look, at least to me, cheaper. I may add to my positions in Oaktree Capital and Alibaba. Will sleep on it. I am left wondering whether I should have sold more and would be interested to hear what others think about Apple at these levels.
Pendrainllwyn
Pendrainllwyn
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- Lemon Quarter
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Re: Slicing an apple
I've been very tempted to do the same. I bought some about a year ago, and they've increased by around 40%, which is incredible for a company of this size. In cash terms it's even more because of the increased value of the dollar.
I've been telling myself I need to take some profits for several months now, but they've just kept on going.
Compared to the other big tech stocks they are on a much more conservative rating, but realistically they're now just too big to grow at the same rate as Google or Amazon. Nevertheless, they're an excellent company, who have seen that the smartphone market has probably run out of steam and have been turning their focus to services instead, where the growth potential is tremendous.
The fact that Warren Buffett has been a heavy and consistent buyer over the last year - he now owns around 5% of Apple - has also reinforced my confidence.
Funnily enough I'd also thought that if I did sell I might put some of the profits into one or two of the big Chinese shares, Tencent being one I'd looked at. But I still don't trust the Chinese market, and any investment there would have to be money I could afford to write off without any regrets.
So for the time being I've decided to stay with Apple, though I'm anticipating what's now almost a traditional dip around the annual new product announcement day which will take place next Tuesday.
I've been telling myself I need to take some profits for several months now, but they've just kept on going.
Compared to the other big tech stocks they are on a much more conservative rating, but realistically they're now just too big to grow at the same rate as Google or Amazon. Nevertheless, they're an excellent company, who have seen that the smartphone market has probably run out of steam and have been turning their focus to services instead, where the growth potential is tremendous.
The fact that Warren Buffett has been a heavy and consistent buyer over the last year - he now owns around 5% of Apple - has also reinforced my confidence.
Funnily enough I'd also thought that if I did sell I might put some of the profits into one or two of the big Chinese shares, Tencent being one I'd looked at. But I still don't trust the Chinese market, and any investment there would have to be money I could afford to write off without any regrets.
So for the time being I've decided to stay with Apple, though I'm anticipating what's now almost a traditional dip around the annual new product announcement day which will take place next Tuesday.
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- Lemon Quarter
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Re: Slicing an apple
They say there's nothing wrong with taking a profit. I guess it depends. I think essentially recouping your cost enables you to run the remaining holding with no fear that you will ever lose money. I don't know much about the two you mention.
Best wishes
Mark.
Best wishes
Mark.
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- Lemon Slice
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Re: Slicing an apple
Clitheroekid wrote:The fact that Warren Buffett has been a heavy and consistent buyer over the last year - he now owns around 5% of Apple - has also reinforced my confidence.
Yes, there aren't too many that get rich selling to Warren Buffet. What was I thinking !
Clitheroekid wrote:Funnily enough I'd also thought that if I did sell I might put some of the profits into one or two of the big Chinese shares, Tencent being one I'd looked at.
Tencent is one of my larger holdings. The shares have traded off because the Chinese regulators are restricting the number of games they can launch amongst other reasons. Interesting at these levels I think. I did add to my position in Alibaba and I also own some Baidu so have all three of BAT, the Chinese equivalent of FAANG. None of these companies are good for income - Tencent pays a tiny annual dividend and the other two none at all. I agree the Chinese market can be treacherous and some companies are fraudulent (as I know to my cost) but their highly meritocratic education system is churning out some very smart hardworking and entrepreneurial people and there are some very good companies out there. It's also an enormous market growing fast. I am happy to take some risk to participate in the second largest economy in the world. Ping An Insurance is another worth looking at - highly innovative. A technology company within a financial services conglomerate methinks. I was fortunate enough to attend a presentation made by one of their senior people. Very impressed.
Oaktree Capital is one of the more contrarian alternative asset managers. They invest across the usual areas (credit, private equity, high yield, loans, real estate etc) but are particularly strong in distressed debt which is the largest contributor to their AUM. So if you think all the cheap debt that has been issued in recent years will come back to haunt companies Oaktree is worth a look.
Pendrainllwyn
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- Lemon Quarter
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Re: Slicing an apple
One could get exposure to Tencent and Alibaba through JP Morgan Asian Income trust (JAI), (along with some other technology and Chinese stocks), with an active manager overseeing the investment choices:
http://citywire.co.uk/money/investment- ... undID=3015
http://citywire.co.uk/money/investment- ... undID=3015
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- Lemon Half
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Re: Slicing an apple
Clitheroekid wrote:
I've been very tempted to do the same. I bought some about a year ago, and they've increased by around 40%, which is incredible for a company of this size. In cash terms it's even more because of the increased value of the dollar.
I've been telling myself I need to take some profits for several months now, but they've just kept on going.
Not really related to Apple particularly, but more to do with the actual mechanics of top-slicing, but this is something I make sure to do once I find that a particular stock-rise begins to filter itself into my day-to-day thoughts. I usually take that as a sign that I should 'do something', and top-slicing is my go-to process for making sure that the share rapidly disappears from my worry-radar.
It's strange as well, because even though quite often a share will continue to do well, I have never ever thought that I did the wrong thing by top-slicing it. The fact that there's usually quite a residual lump of capital still invested in the share allows me to still enjoy any subsequent rise, rather than regretting not still having more invested in it.
The fact that I'll more often than not rotate any top-sliced capital into something else anyway, means that I'm quite satisfied that I'm still doing something worthwhile with any top-sliced capital, and I know that once a share has risen enough to become a 'regular thought process', day-to-day, than I really do need to do something about that....
I can hand-on-heart say that of all the top-slicing that I've done over the years, and no matter where the share-price has gone after the event, I've never regretted a single one. Remember - it's a top-slice, and not a full-on sale, so you've still got a hand in the game....but you're reducing exposure and banking at least some of the gains already made....
In fact I do actually have a two-stage process in this regards, with a clearly identifiable set of trigger-points -
1. A share that's risen enough to become an overweight position, and seems to seep into day-to-day thought-processes quite often - this is usually followed up with a plan to reduce exposure over the coming weeks, with most of that time spent looking for the alternative share to rotate any top-sliced capital into.
2. If I ever find myself feeling the need to tell my wife 'how well a share is doing' - immediate action necessary now, as this has been the single-most reliable indicator of a top for those shares I feel the need to talk about that I've ever known over my investment lifetime....
Cheers,
Itsallaguess
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- Lemon Slice
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Re: Slicing an apple
Itsallaguess wrote:In fact I do actually have a two-stage process in this regards, with a clearly identifiable set of trigger-points -
1. A share that's risen enough to become an overweight position, and seems to seep into day-to-day thought-processes quite often - this is usually followed up with a plan to reduce exposure over the coming weeks, with most of that time spent looking for the alternative share to rotate any top-sliced capital into.
Itsallaguess
The part in bold is crucial for me, after once top-slicing and sitting on the cash for maybe 4 or 5 months. If I haven't got anything to recycle into I'll stop myself, and if I do, then the buy trade goes in immediately after the sell. Psychologically that also stops any seller's remorse.
torata
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Re: Slicing an apple
This sounds like a good strategy, I bought a bunch of AAPl at $20 but then sold at $90
never have I so deeply regretted taking a 400% profit! - I eventually capitulated and bought back 50% of my previous holding at $165
never have I so deeply regretted taking a 400% profit! - I eventually capitulated and bought back 50% of my previous holding at $165
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- The full Lemon
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Re: Slicing an apple
Clitheroekid wrote:Compared to the other big tech stocks they are on a much more conservative rating, but realistically they're now just too big to grow at the same rate as Google or Amazon
Actually Amazon is almost as big as Apple. Both shares recently passed a trillion dollars in market cap.
Google is worth less but still far bigger than any UK company.
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- Lemon Slice
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Re: Slicing an apple
Itsallaguess wrote:I can hand-on-heart say that of all the top-slicing that I've done over the years, and no matter where the share-price has gone after the event, I've never regretted a single one.
I am not sure that's entirely true for me. Maybe I worry too much. For Apple it hasn't helped watching this recent birthday interview with Warren Buffett in which he lays out his reasons for liking Apple. https://www.youtube.com/watch?v=9kke_CGNpFE. Anyway, Apple remains one of my largest holdings and I have a better diversified portfolio now.
Pendrainllwyn
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