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Lessons Learned III - Selling Case III

|Includes:Gramercy Property Trust, Inc. (GPT)

This breaks the smackdown series and presents a case where the sell timing was bad but not aweful.

The time I look at Gramercy Property Trust (NYSE:GPT). The thesis originally - early 2013 - was that GPT would pay dividends in late 2013 and after settling that risk the price would increase. This is essentially what happened. In early 2014 things where looking good (price up to ~$6 or ~30% gain). Then prices slipped. When GPT announced a follow-on offering, I looked for a good moment and sold at 5.44, or about 20% in just over one-year (not all that great given that SPY was up about the same).

The central reasoning was:

  • My thesis was over
  • I was not invested for extended expansion
  • I did not intend to keep my REIT position as large as it was.

Two failures:

  • If I had exited when then thesis ended instead of waiting for long-term tax treatment I'd have done better.
  • If I had evaluated the capital raise instead of fleeing from it, I might have recognized that it was good for the stock.

So this time, though I missed out on about 10%, I followed the strategy better.

Stocks: GPT