Rules for Selling Investments
As much as I hate to sell an investment, there comes a time when selling is the best choice. I have been far to patient with Conagra’s management in their turnaround efforts. Some might still think there is hope. For example, as one Seeking Alpha author said, “Sporting a near 5% dividend yield and single-digit multiple, CAG could turn out to be an attractive investment for investors with a higher risk tolerance and willingness to take a chance on a turnaround.” Seeking Alpha link
I define myself as having a higher risk tolerance, but I’m also a realist. There are times when the cash is worth more than the shares. I can put the cash to work. CAG’s metrics, as shown on the following image forced me to make this painful decision.
The story could have been much worse, but it was still bad. The thing that reduced the pain were the total dividends and options contract premiums. I received about $12K from those income streams. However, that did not reduce the ultimate loss on this investment. I should have sold all of my shares when CAG lowered their dividend. Shame on me for being overly optimistic.
CAG’s story is just another reason why diversification is so important. CAG may still recover and I will continue to watch it with various alerts, but I am not overly hopeful or optimistic.
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