Stocks That I Sold Out of Recently
I am a "Buy and hold" investor, but not forever. More like buy, hold and make sure the business delivers value or sell. The question often comes up, "When do I sell?". This is unique to every investment and each investor's goals. For me, the baseline of the S&P 500 is a consideration. Do I think this stock can beat the returns of the S&P 500? If the answer is no, I probably will sell the stock.
I've needed to raise money from my stock portfolio this year. More often, I chose to sell some underperforming stocks at a loss or small profit versus trimming the winners. Each of these stocks was held for at least 1-3 years until I decided to close the position. Here are stocks I sold out of recently and why:
Snowflake (SNOW)
- sold for: -$1,155.92 loss (-17.56%)
- reason: excessive stock based compensation (41% of revenue), usage based model still needs to be proved, management sub-par + killed the stock price, not currently profitable, product is a glorified database?
Etsy (ETSY)
- sold for: -$1,594.53 loss (-37.55%)
- reason: earnings reports have been consistently underwhelming, competition from Shein/Temu, lack of relevance and growth slowing
The Charles Schwab Corporation (SCHW)
- sold for: +$176.36 gain (+14.65%)
- reason: lackluster earning reports, sentiment very low, new brokerage/Robinhood competition, customer outages, lack of growth prospects, lack of understanding how banks make money (unfamiliar with banking industry)
DigitalOcean (DOCN)
- sold for: -$324.36 loss (-31.56%)
- reason: not profitable, competitor with AWS, rotated to Amazon (AMZN)
Canopy Growth Corporation (CGC)
- sold for: -$1,052.01 loss (-87.07%)
- reason: not profitable + constant public offerings of stock to fund business operations
Coursera (COUR)
- sold for: -$741.27 loss (-52.89%)
- reason: not profitable, product potential existential threat by AI, prefer better opportunities to invest
Datadog (DDOG)
- sold for: $469.79 gain (+21.21%)
- reason: cutting back tech exposure, huge customer bills often reported negatively
UIPath (PATH)
- sold for: -$312.96 loss (-51.44%)
- reason: recent CEO shakeup, product potential existential threat by AI, not profitable
Roku (ROKU)
- sold for: -$631.42 loss (-36.62%)
- reason: dependent on TV manufacturers, TV Operating System needs distribution, not profitable, lack of a moat?
Yeti (YETI)
- sold for: -$567.01 loss (-31.11%)
- reason: prefer other industries than outdoor coolers and drinkware
Okta (OKTA)
- sold for: -$86.19 loss (-3.15%)
- reason: decided to consolidate tech holdings, rotated position into Crowdstrike (CRWD)
Grab (GRAB)
- sold for: +$36.80 gain (+7.32%)
- reason: not profitable, don't like the industry economics (rideshare and delivery)
Dutch Bros (BROS)
- sold for: +$6.14 gain (+2.11%)
- reason: recent food and beverage industry headwinds, will take years to build out new locations
Portillos (PTLO)
- sold for: -$440.36 loss (-55.47%)
- reason: recent food and beverage industry headwinds, will take years to build out new locations
Sunrun (RUN)
- sold for: -$1,242.67 (-54.58%)
- reason: consolidating solar industry positions and prefer Enphase Energy or First Solar
Sofi Technologies (SOFI)
- sold for: -$362.07 (-34.55%)
- reason: price trades erratically, prefer to invest in other industries, lack of understanding how banks make money (unfamiliar with banking industry)
Conclusion
Time will tell where these companies go. Each investment you choose has an opportunity cost. If you invest in one stock, you can't invest in another. I sold these stocks because I needed the money, but also because I felt that I should consolidate my portfolio into fewer positions. I hope by selling off the worst performers, I will hold onto the stocks that give great returns in the future.