Letting go of mistakes

It’s slow but steady progress at the moment for my portfolio. All seems well right now but I expect some more volatility is just around the corner, judging by how this year has been going so far.

This is just a short post to update on my trades from last week. A few mistakes unfortunately, but hopefully I’ve resolved them well.

I sold out of XP Power last week for an 8% loss. Its share price started to show signs of weakness not long after its recent ‘steady as she goes’ trading update. XP Power is not one of my higher conviction positions so while I don’t think there is any serious cause for concern, I decided I’d be better off invested in something else. In hindsight, I don’t think I had enough long term conviction in XP Power to have bought it when I did. I’ve removed it from my watchlist now.

I reinvested the proceeds into Booking.com, the day before its results were due. I was hoping that the results would be ahead of expectations given Booking.com’s previous forward guidance seemed pessimistic. My hope was realised but turned out to be naive, as Booking.com smashed expectations but issued even more pessimistic guidance and the share price fell. It was tempting not to follow my stop loss and hold on for the long term, partly because I think Booking.com looks very undervalued for such a high quality business, but mostly because I didn’t want to admit a mistake so soon after my purchase. Neither of those are good reasons and rules are rules so I sold for a 12% loss.

I reinvested the proceeds into Amazon. I’ve written about Amazon previously so won’t do so again here. My mistake here was selling my previous position, in a period of market volatility earlier this year. I have a lot of conviction in Amazon’s long term prospects and the valuation seems reasonable, so I’m reinvesting here (unfortunately at a significantly higher price).

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