Why I'm Ending my Love Affair with aQuantive

Friday marked the end of my love affair with aQuantive (AQNT), a company I got to know working in ad sales over the years and a stock I learned to love over the years…

aQuantive was recently acquired by Microsoft (MSFT) in a $6B deal, making it one of the better performing stocks in my portfolio. Please note that for every hit like this, there are misses. In fact, I’ve been working on a post on my biggest trading/investing mistakes and there’s so much there that it’s taking a while.

I was not going to post the lot size, then decided to do so anyway as I want to share a few lessons (under the graph):

The lessons are:

You need money to make money: 100 lots won’t cut it, and even 1000 don’t really make a dent. I sometimes contemplated putting $100K or more into the stock, but aQuantive was a company that was always priced at a high P/E and expectations were high… so it was arguably priced to perfection and I did not want to lose my shirt. I don’t regret not buying more, cause your thankful on the downside when losses are limited, but the bottom line: you need money to make money.

Stick to what you know: at the risk of coming across as too confident here, few people have as much knowledge in both finance and advertising online. That’s an area I should stick to (with proper diversification to limit exposure, of course).

Stick to quality companies: aQuantive was a best of breed firm in advertising services. I also owned Doubleclick, Valueclick (VCLK) etc. at various points, but aQuantive was the only one I would get back in… with more and more ferociousness.

Look for diversified plays within strong industries: aQuantive was a diversified online player, this made a lot of difference over the years, and of note when MSFT bought it.

Allocate capital efficiently: I am selling my shares because MSFT is paying $66.50 and there’s no need to be greedy… at $66/share, it’s time to allocate capital to higher growth areas…

Also, while while my portfolio, Mojo Supreme, is picking up nicely on all fronts, the fact that I’m self financing it means that every once in a while I have to unload some shares when they really spike… of course, that also supports the “allocating capital to higher growth areas” because I’ve long ago realized that as good of an investor as I strive to be, I am arguably a far better manager and entrepreneur. Don’t worry, a mistakes I’ve made as a manager is also on the way…

Of course, I think I’m ending my affair with AQNT as an investor, something tells me that as my site continues to grow, we’ll be working together for some time to come.

On the stock market front, there are certainly a few great opportunities I’ve had my eyes on. As always, I’ll add disclaimers when making posts on a given company I own or even think of owning.