Robert Freedland

Visa: Why I Sold All of My Shares

Visa is now at $80.64. Congratulations to all of you who hung in there with your shares! That doesn't change my basic strategy of limiting losses with all investments I make. If you don't like that approach, please use some other method of determining your sales on the downside.

Visa: Why I Sold All of My Shares

Adesai,

I will not argue with your points. I never have claimed to have brilliant insight into the credit crisis, the role of derivatives and credit default swaps on a stock like Visa, nor anything else.

My own strategy is the simplest of philosophies which involves trying to identify quality stocks within a portfolio---and there was much about Visa that I did indeed like---and then managing my holdings with an emphasis of limiting losses and retaining gains in a very mechanical fashion.

Visa has moved far from a 10% move from day to day. I sold my shares at $78.14 and opened up myself to a massive display of abuse and comments about my idiocy and comments about what a waste my comments were. But they were far from ignorant. The strategy of above all limiting losses is one of the most fundamental of investment strategies beyond all of your insight.

Visa today as I write is trading at $53.79 down $(.83) on the day. This is an over $24 drop from my own sale point. A $24 drop from a $78 level itself represents avoiding a further loss of nearly 31% in my own equity. That is why it is necessary to limit losses and to respond to market influences by trying in some systemic fashion to move from equities into cash.

But I cannot argue that my writing was more than superficial in terms of the overall fundamental outlook for a company like Visa. I apologize to you if that wasted your time. But perhaps there is an investor or two, probably new investors, that learned about limiting losses and keeping an 8% loss from turning into a 40% loss in a matter of weeks.

Thank you for taking the time to comment.

Visa: Why I Sold All of My Shares

It is a sad commentary that I received all of the abuse when all I did was limit my loss on V to 8% and sold shares at $78.99.

It has been another 3 months since my last comment. Instead of the 8/1/08 price of $71.73, Visa is down another $20 to $51.75.

It may be a great price to buy.

Meanwhile, limiting losses isn't really such a bad strategy, is it guys.

Even from an amateur like me who doesn't really know anything anyhow and has wasted all of your two minutes by contributing to Seeking Alpha.

Wishing you all good luck with all of your investments.

I know I need some.

Bob

My Investment Philosophy and Visa

I sold my shares at $78.99. Visa closed today at $65.18. Did all of you Visa holders hang on or sell? What is wrong with selling at an 8% loss? For one thing it keeps you from having a loss of another $13/share.

Where are my critics now?

Visa: Why I Sold All of My Shares

Guys,

You paying attention to V stock? I sold at $78.99. V closed today (8/1/08) at $71.73. I must have been an idiot huh?

Sorry.

I hope you all make tons of money. But selling at an 8% loss can prevent that from becoming an 18% loss. But what the hey, just look at the grimace and the strange angle of my face. That will tell you a lot.

Visa: Why I Sold All of My Shares

For all of you who believe I have a "bonehead" 8% loss rule, please note that Visa (V) closed at $74.55 on Friday. I sold my shares at $78.99. That was over a month ago.

Part of my strategy is to recognize that actions within my portfolio may well and probably do reflect the overall tone of the market.

Writer after writer above has condemned my idiocy.

I hope for all of you Visa bulls that Visa closes at $150 next month.

But meanwhile, I shall plod along---examining stocks, thinking about stocks, limiting my losses, identifying new ideas, and responding to the actions of the market as they develop within my own portfolio.

Investing is not a religious experience. It involves thinking, calculating, calmly and quietly making trades, conserving your assets, minimizing your losses, and protecting your gains.

I shall continue to try to think. I may be an amateur, but I find the tenor of some of the comments quite disappointing from such a fine website as this.

My Investment Philosophy and Visa

Adesai,

I sold my shares because they had incurred an 8% loss. That is my rule. I didn't even make that one up. I adapted it from William O'Neil of IBD fame.

www.investors.com/lear...

"Key Points To Remember

* The first sell rule is to get rid of any stock that falls 8% below your purchase price.

* It's critical to follow this loss-cutting rule regardless of how highly you value a stock. Personal opinions get in the way of smart selling decisions.

* The larger the loss, the higher the recovery you need to get back to the break-even level. (A 50% loss on a $100 stock, for example, requires a 100% gain to get back to $100.)

* Strong stocks sometimes initially retreat close to their buy point (as determined by the stock's chart pattern). This doesn't necessarily mean you have to sell, unless the stock goes 8% below the purchase price.

* Avoid making sell decisions based on tax concerns or commission rates."

My entire point, as you can see from today's market, that a sale at an 8% loss may be due to some intrinsic factor with something wrong with the stock or something wrong with the market itself dragging down all stocks. Either way, I prefer to step aside.

Was it wrong to only change my rating to "hold" while I had personally sold my shares? I don't think so. My own rating is based more on fundamentals rather than technicals. My own sale was based on my own entry point. I would suggest that we all could benefit from limiting our own losses in this fashion.

However, for me to change my rating to "sell" because I had incurred an 8% loss seems a bit far-fetched. Better to dip to a "hold" rather than leaving it at "buy". Just my own take on it I guess.

Simply an 8% loss was my reason for selling.

And I shall use that reason again in the future.

I do not understand the outrage, the disparaging comments bordering on abusive and disrespectful, that I received from many a booster of Visa shares because I was honest and straight-forward. A lot of these so-called experts could use a bit of straight talk as well.

I like Visa stock and believe that the long-term prospects are probably quite good. But I am very concerned about the immediate prospects for the market itself.

And that is why an 8% sale, as long as you don't go immediately and reinvest the proceeds, can be helpful.

Bob

My Investment Philosophy and Visa

My ratings on stocks are based on both the technical and fundamental information that I can observe and retrieve on the company discussed. My own sale was based on my own personal trading rules and not anything fundamentally wrong with the company. I have chosen to reduce my ratings in those situations to a "hold" as it would be unfair to be initiating a sale and keeping my own rating at a "buy". I reduce stocks to a "sell" rating when I believe something fundamentally wrong has happened to the stock. This might be a miss on an earnings report, an investigation, technical weakness, or a combination of all of the above.

As is often the case, sales of stocks are an indication of overall market weakness as well as weakness in the company involved. Thus, after selling a stock on a loss, as I did with Visa, I do not go and reinvest the proceeds into another company so as to risk compounding the losses. I wait for a partial sale of one of my own holdings at an appreciation target (what I call 'good news') which 'entitles' me to be increasing the number of my holdings (unless at my maximum of 20 positions).

Currently I am at 5 positions, reflecting the relative weakness, I believe, of the overall market. If I should sell a position now, at my minimum number of holdings, I do plan on replacing it with a suitable investment.

My own portfolio thus drifts between 5 and 20 positions in a fashion that I believe will reflect market tone without any calculations on my part. That is why I am referring to my own 'idiosyncratic' buy signals. They have nothing to do with the technical appearance of any chart, rather, they are due to sales of my own holdings at either appreciation or depreciation targets...what I again call sales on 'good news' or 'bad news'.

I hope this explains what I am trying to accomplish a bit better.

It is unfortunate that there are any investors who would choose to enter into name-calling and abusive comments to a fellow investor. I have modestly referred to myself as an amateur. But I have been blogging for over 5 years and have been writing about hundreds and hundreds of stocks on my blog.

Flip through all of the pages on my website and see what you think before you choose to pass judgment. I think many of you will appreciate the time and effort that has gone into my analyses.

Visa: Why I Sold All of My Shares

Thank you all again,

I do use my calculator when determining a sale. I do this on the upside and the downside. I am sorry if that doesn't work for the vast majority of you.

I am in agreement that the chart for Visa is in an uptrend. I did not recommend anyone else to sell their shares. I simply sold my own shares because I have chosen to limit my losses to 8%. And yes, I calculate that out.

Probably those that can anticipate price moves better than I shall be far more successful. Kudos to you all.

I shall continue to limit my losses on each of my investments by selling them quickly on declines and selling them slowly and partially as they appreciate.

There are many other fish in the ocean. Congratulations to all of you who have been successful with your Visa stock holdings.

I believe strongly that the individual investor is best served by a disciplined approach to selection of stocks and managing them in a disciplined fashion as well. This strategy is not likely to be very well suited for everyone. It seems to work for me. And I shall continue to follow it and write about stocks as I go.

I am sorry that so many of you do not seem to appreciate what I am doing and are quick to condemn what you do not understand. If I have wasted any of your time here on Seeking Alpha I apologize for that.

But I do not think that I shall be changing my approach which is both how I manage my holdings as well as how I select my investments.

Regards.

Bob

Visa: Why I Sold All of My Shares

Friends,

Thank you for your many comments---some kind and others less than kind.

If you will visit my blog, you will note that I do state that I am an amateur investor. I do not claim to know when stocks will rise in the future or decline. I do not believe that anyone really knows that information.

This is not about the size of one's balls. It is about the ability to manage a portfolio.

I subscribe to the belief that it is imperative for the individual investor to limit losses. I sell my stocks at 8% loss limits regardless of my own belief about their future prospects. For some that may be foolhardy. I believe it represents a disciplined approach to one's holdings.

I try very hard to only select stocks where the possibility of this is limited. I do this by selecting stocks with consistent records of revenue growth, earnings growth, free cash flow growth, solid balance sheets, and reasonable valuation. I also like to see companies with decent charts.

But I do not ever remain married to my investments. I am not on a crusade, I am not a blind follower of any investment.

Investing is a passion for me. But it is a passion built on thought and observation. Selling declining stocks quickly and appreciating stocks slowly and partially is my method of dealing with the chaos of the marketplace.

The rest of you may depend on your balls and your guts. I shall be referring to my brain from time to time.

Regards.

Bob

Visa: Why I Sold All of My Shares

Thank you all for your kind comments.

I do not have a record of any of your trades but I enjoy your commentary. My trading record is available over on Covestor.

My trading rules include the IBD 8% loss. I just follow my rules.

My term "bad news" is simply that I took a loss on a stock. It is an internal portfolio management device that times my own entries into and out of the market. You can read my blog further if you desire.

I have never claimed to be more than an 'amateur investor'. I do my homework, and try to think rationally about investing. You all must do much better and buy and sell stocks frequently without any of my input. Please don't bother reading anything I write if you feel it is not helpful to you.

For those of you who do appreciate honest and straight forward discussions from my perspective I would encourage you to drop by and check out my website for yourself.

Bob

Visa: Why I Sold All of My Shares

Thank you all for your kind comments.

I do not have a record of any of your trades but I enjoy your commentary. My trading record is available over on Covestor.

My trading rules include the IBD 8% loss. I just follow my rules.

My term "bad news" is simply that I took a loss on a stock. It is an internal portfolio management device that times my own entries into and out of the market. You can read my blog further if you desire.

I have never claimed to be more than an 'amateur investor'. I do my homework, and try to think rationally about investing. You all must do much better and buy and sell stocks frequently without any of my input. Please don't bother reading anything I write if you feel it is not helpful to you.

For those of you who do appreciate honest and straight forward discussions from my perspective I would encourage you to drop by and check out my website for yourself.

Bob

Visa: Trading Transparency

Dear Frankmeister,

Like in Fiddler on the Roof, 'when you are rich, they really think you know!'

I have other investments such as retirement vehicles and the like. Before you dismiss my comments because of such an honest expression of poverty, drop by my blog and see what you think. You might be surprised. But then again....

Bob