Johnson Controls: Rated a 'Hold'

One of the hardest things about being a blogger, and now a Seeking Alpha contributor, is the necessity of doing everything so publicly! I just got around to posting about my 'brilliant' decision to switch my Graham (GHM) holdings into Johnson Controls (JCI) and now my entire plan is hitting headwinds. Perhaps a bit of turbulence from Gustav?

It is my strategy to sell a holding should it hit an 8% loss. I don't really care whether that holding has been held for a year or 15 minutes. After an initial purchase, if that stock drops the required 8% out it goes.

Johnson Controls (JCI) hit that 8% loss for me on Thursday morning, and I sold my shares.

In fact, I sold my 210 shares of JCI at $29.5223. These shares were just purchased two days ago [Tuesday](yikes!) at a price of $32.0477. Thus, they had declined by $2.5254 or 7.88%. When I wrote this, JCI was  trading at $29.47, and was down $1.05 or 3.44% on the day.

While Johnson Controls has indeed been talking about steps it will take to deal with the slowdown in the auto industry and the slowdown in construction - including taking a $450 to $500 million charge to account for the cutting of jobs and closing of plants - probably the biggest thing that drove this stock down on Thursday was the overall market. When I wrote this, the Dow was down 281.30 points at 11,251.58, and the Nasdaq was down 58.91 points at 2,274.82. The market was down even with oil showing continued weakness, trading at $107.20 down $2.15 on the day.

I still am long-term a fan of Johnson Controls (JCI), so even though my trading system requires me to be a seller of shares, my rating is being reduced:

JOHNSON CONTROLS (JCI) IS RATED A HOLD

With my sale on 'bad news,' I shall be 'sitting on my hands' with the proceeds, waiting for one of my other holdings to hit a sale on an appreciation target, which is what I call 'good news' prior to looking for a new position in which to place the proceeds.