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United Protection Security Group Inc V.UZZ



TSXV:UZZ - Post by User

Post by theinvestor22on Feb 18, 2013 9:59pm
220 Views
Post# 21007224

Something else to ponder...

Something else to ponder...

Here are some questions for long term holders of UZZ stock... 

 

What do you think the company was worth a couple of years ago when revenue was actually declining, net income was negative and the company was in breach of its debt covenant(s)?  Why did you hold the stock at that time? Was the reason(s) emotional or rational?

 

What do you think the company is worth today given the increasing revenue, acquisitions, new contracts, positive net income, future prospects, etc.?  Why do you hold the stock at this time?  Is the reason(s) emotional or rational?

 

Just to help out, I'd like to summarize from memory a story Jim Cramer told in his book Real Money.  He used to sit down with his wife (she's also an investment professional) every week to go over his fund's portfolio.  They would talk about why he held each stock and what his intentions were for each stock.  She would often get pretty frustrated with him and say a lot of "no No NO!!" type of remarks to his reasoning.  Then, before they met one week, she took the portfolio list and masked the price paid for each security.  Sort of an investment redaction, you might say.  They both noticed his reasoning improved - as did his invesment returns - once he stopped including the price he'd paid for a security in his buy/hold/sell thesis.  My point is that, if your primary reason for holding UZZ is that you paid much more for it, then you're being irrational.  The only reason for holding any stock long term is that on balance it represents good value going forward; in other words, you think you can make a superior return if you continue to hold the stock.

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