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Sold Wells

July 30th, 2009 at 08:23 am

Just got rid of my Wells Fargo holding. I came out with only a tiny profit (due to my bad timing on the buy), but when it's time to sell, it's time to sell. Why did I sell?

I am skittish about the state of commercial real estate, which unlike residential real estate, has yet to "burst". Knock on wood, it will not because the ramifications to the entire market is huge. If that's not bad enough, Wells Fargo itself has a large holding in commercial real estate as well, which puts me at a much greater risk exposure than I am comfortable with. Plus, the stock has only been holding lately, and yet, the dividends have been cut. So... there was simply no reason for me to stay and all the reasons to leave.

Now, mind you, I still think Wells Fargo is a solid company. It's not that. It's just that, from a trading point of view, the bottom line is, "Are you going to make money with that or not?" And the answer that I am coming up with is, "Right now, I really doubt it." So, today, at a 9-month high, it seemed as good of a time to bail as any.

Now to search for my next buy... if any. I am leaning towards either REIT or select corporate bonds. Thoughts? Suggestions?

7 Responses to “Sold Wells”

  1. Aleta Says:

    A gut feeling to do something is not a bad idea. I had also heard that the next shoe to drop would be the commercial real estate. Just thinking about how many businesses have closed and more to come. Better safe than sorry.

  2. Broken Arrow Says:

    Well, I'm hoping that particular shoe will not drop.... It may or may not, seeing as how the conditions for the residential market is a different circumstance that we are in now.

    However, even if it doesn't, since that still won't translate to a lot of upside for me... as you say, better safe than sorry.

  3. merch Says:

    I have been holding options on STT. I am up about 37% and am looking at closing my position. I am more concerned about health care and cap and trade. I believe the market is pricing Health care as dead.

    With Obama's approval numbers dropping, it will be harder to get his agenda items through including a second stimulus package. And I beleive we are seeing wall street act positively to these.

    With that said, if STT doesn't vlose above 50 in the next few days, I will probably be out.

    I can't fault you, Wells looks to be topping. U might have put a trailing sell order on the position while researching a new purchase.

  4. baselle Says:

    If you are skittish about commercial real estate, why are considering a REIT?

    I'm kinda bummed that all my dividend stocks are on a tear...would've liked to have bought and held for just a few months more. 3M looks particularly nice after buying a little bit at $45.

  5. Broken Arrow Says:

    Merch, the the first thing that came to mind when I decided to sell was a trailing stop. But, in this particular case, I was convinced that the trade volume was going to be as good as it gets (at around 11am or so), and didn't see any point trailing this one. Maybe it's beginner's luck, but it turned out to be the right call. Big Grin

    Baselle, I should have been clearer. I would focus only on residential real estate. Actually, if commercial real estate do end up popping, then I will definitely buy. Right now though, I'm just window shopping, but will probably not buy into it. I'm also looking at home builders and aftermarkets....

  6. baselle Says:

    I'd be still a bit skittish right now with real estate, either residential or commercial. Couple of things to consider as you window shop. R real estate has a spring selling season - if you have school age children, you try to look, buy that house, and move in before the school year in September. We are just coming off of that. 2010 is also the year of the second wave of mortgage resets, this time Alt-A and even prime-ARMs.

  7. Broken Arrow Says:

    Thanks baselle. I'll put aside the REIT idea until a much later time.

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