Thoughts on Short Term Performance
When an investment is up 260% in less than two month like Carvana has been, that’s nothing more than an indication the market gross mis-priced the security and it is just re-evaluating it higher… or lower. I’ve been at this now for 20+ years and am also a student of history.
Mr. Market does this kind of thing regularly and when it happens it’s best to sell the dollar amount that matches your original investment and let the rest ride unless (or until) you find a better opportunity. In the case of Carvana, say you bought 1,000 shares back in mid-December around $5. With the stock currently trading north of $18, you would only need to sell around 300 shares to take your initial money off the table.
I learned this the hard way back in 2005 when I had a client account up similar numbers in a similar period of time, and ended up selling the entire position instead of just taking the principal out. The stock rose another 100–200% the following week and it became a big issue between the two of us, but that’s a story for another day. The point is a lesson learned 17 years ago by me can help you be a better investor.
Follow my research on GuruFocus for more upcoming articles, but here’s a look at the most recent posts with performance figures. These 9 stocks are up collectively 80% in less than two months.
From December 2022
Carvana ($CVNA) on 12/13 up 250%
Snap ($SNAP) on 12/16 up 34%
Coinbase ($COIN) on 12/19 up 126%
Palantir ($PLTR) on 12/20 up 42%
Meta ($META) on 12/27 up 65%
Tesla ($TSLA) on 12/28 up 74%
AMC Networks ($AMC) on 12/29 up 30%
From January 2023
Paramount ($PARA) on 1/09 up 30%
Wayfair ($W) on 1/11 up 67%
There are other articles that are just so new to the site that it’s best to give them time to work out, but 2 stocks $OPEN and $KIND have done well.
I also wrote about how Taiwan Semiconductor is not worth the price AND currently TSM is up by just 12%, far lower despite the market lifting all boats.
If you want to find stocks like these, there are three main sites that I suggest.
- Gurufocus is where I go to track money manager activity and see long-term fundamental research.
- SeekingAlpha is where I read news and analysis across the capital markets as well as do
- FinViz.com is where I do my initial screening.
