Stocks I (Possibly) Sold Too Soon

The following is an overview of stocks that I might have sold too soon. The list includes: Adobe, Microsoft, The Knot, IAC/InteractivCorp, Expedia, ValuClick, Digital River and WebEx.

Adobe (ADBE)
Adobe is a stock I have bought and sold many times. Each time, I’ve made decent money, in the 20-40% range. This last time I got out at $35 because it was a target I had set and I was trying to become more disciplined. The stock is now at $40 per share, a cool $24 billion. I love this company and their acquisition of Macromedia, but before I dive in again, I would want to see some signs that piracy and a plethora of free web services do not damage Adobe’s revenues. Think about it: you can almost get by without Dreamweaver, can’t you?

I’d get back in at a price below $30 per share, which means I have some waiting to do.

Microsoft (MSFT)
I bought MSFT in the 21st century, which essentially means when it was in its flat period. For many reasons: XBOX 360 doing well, Zune hype, and Vista launch, the company’s stock rose 30% from June to Dec. 2006. At that time, I sold.

I really do not see myself buying this stock ever again. Fine company and all, great business. But the stock does not move!

The Knot (KNOT)
I bought The Knot at less than $10 and once I doubled my money at just over $18, I sold. The company is now well over $30. The company has a nice leadership positions in the marriage market online, but I do not see myself getting back in. I would if the stock dips below $25 per share. Problem was that I had seen iVillage and The Knot become out of sync in terms of market value and share price.

iVillage held a stake in The Knot, and figuring that the market should be rational, I sold my shares in The Knot after the 100% spike and the fact that iVillage was trading at a discount to The Knot given the ownership relationship. I got out of The Knot and bought iVillage, I made a hefty return on iVillage when it was acquired by GE’s (GE) NBC Universal… but I am pretty sure I would have made much more money by sticking with The Knot.

At $1 billion in market cap, it’s rich by P/E standards, but judging by its growth and the potential market size for all things marriage, it’s not insanely pricey.

IAC/InterActiveCorp (IACI)
I had become an IACI owner by virtue of buying Ask Jeeves. I was not a fan of Ask Jeeves, but when I saw how giddy investors got about Mamma.com (MAMA) back in 2003 - before Google (GOOG) was publicly traded - to ride the search growth, I thought Ask Jeeves was a good pick. Incidentally, my position in Ask Jeeves was always flat, which explains why I did not buy Google, to some extent.

That was a rookie mistake: at the time, I did not want to lock in a loss, so I held on to Ask Jeeves. Had I sold Ask Jeeves, I would have admitted to a less-than-5% loss but then plunked down my $20K in Ask Jeeves in Google, which would be $80K now. (The other reason, which I have referred to in earlier posts, was my then-boss - who had a lot more experience than me - advised me against it. In hindsight I can say he was wrong, but he was always more experienced in trading so I sided with caution. If I really believed in Google, trust me, I would have gone with my gut).

Anyway, once Ask Jeeves was bought by IACI, I owned shares in IACI. I made good money on IACI but then I set a target at $30 and sold. Today IACI is worth $38. Half of my Ask Jeeves holdings went into IACI, the other half went into Expedia, which Barry Diller sold off.

Expedia (EXPE)
Expedia, freaking Expedia. When Barry Diller spins something, short the stock. I held on to it. I don’t know why. Since it was not a large sum, I wanted to hold on to IACI and EXPE and see which one does what. In the end, I accepted a loss on Expedia, a marginal one, but since that transaction, the stock has gone up from $16 to $21.

I do not see myself buying this stock.

Oh, an anecdote: I sold this stock when my dad, who owns a hotel told me how much more Travelocity meant to his business than Expedia. Call it Warren Buffett school of investing.

Valueclick (VCLK)
One of my bigger bonehead moves: I sold this puppy way too early. I got into online advertising stocks a bit prematurely. Many stocks I experienced, 25, 50 or 100% increases but had I hold on, I’d be up 200-500%. With Valueclick, it was then my least favorite of the many stocks I held in the sector so I simply unloaded.

That was at $14, it’s now at $28. Yeah, I’m not too happy about that. Valueclick is a good M&A candidate, but for some reason I am adding to aQuantive, and not getting in to VCLK.

Digital River (DRIV)
One of my favorite stocks that I have bought and sold over the years. Made good money. I got out at $45, went all the way up to $60. I kept half, but that’s just not the same. I do not own any now. Would I get back in? eCommerce is rising, but at a market cap of over $2B, I don’t know.

WebEx (WEBX)
The first stock I bought when I got back into the game in 2003… I got out at $27, it’s now at $35. But I would not get back in: the company seems to be a bit wild in terms of hitting numbers. Also, better places to plunk down my dough.

Also:

Checkfree (CKFR), Electronic Arts (ERTS) were up a lot after I sold but seem to have gotten back down to earth.

Lesson: Targets are great, but a bit less for high growth companies. Also, never be afraid to get back in higher on a stock you like, some stocks tend to always go higher.