RE:Why I sold last weekgobomber wrote: We have had a fantastic run over the last 10 months, basicly since the JV between Airbus and Bombardier was annouced, last October. Since then the SP went up rather quickly as investorswere hoping for great news on the CSeries. That was followed by the Farnborough Airshow where again investors investor were still hoping for huge sales of the CSeries and Bombardier's Regional and business jets. Before the show the price was up to $5.40. As we all know by now the show was a complete dissapointment and the SP dropped well below $5 and stagnated around $4.75
Then there was the expected Q2 results. All analyst were predicting very good results with upgraded target price over $5.50 and Bombardier did deliver. Still, the SP did not even climb back to $5 before Q2 results and only climbed to around $5.11 at closing on Friday. Consequently, during th day on Friday I decided to sell most of my position at $5.10+.
So, why sell. Two reasons: Reason #1: I had not taken any profits in a long time and $2 per share was very attractive to me. Reason #2. I have owned Bombardier shares for the last 18 years and the price of these shares has always fluctuated greatly on a daily basis, often close to 5% on some day with no apparent reasons to explain the fluctuation. One rule of thumbs has always been true with Bombardier shares. If there are no major positive rumors or events expected in the not so distant future, the stock goes down. The JV, the Farnborough show, and Q2 results were three important event that most investors saw as to be very positive and the stock went up. Right now, except for the Q3 results, there is nothing major on the horizon to motivate investors and I suspect the SP will go down in the near future. Hence, for these two main reasons, I sold with the plan to buy back at some point.
Some my not like what I am saying but after 18 years with Bombardier, I gained a little bit of experience. For your sake, hope that I am dead wrong as I have been wrong before.
I posted the above on August 8th stating my reasons as to why I was selling my Bombardier position. Over 18 years with Bombardier I have learned a few things. What is currently going on has demonstrated my understanding of this stock. However, I made a few mistakes buying back all of my original position plus much more with my profit. I was expecting the stock to go down but not to the current level. Losing 40 % of its value with no major reasonsto do so is well beyond normal fluctuations for this stock.
I bought back some above $4+, some at $3.75, more at $3.50, and finally my last buy order at $3.31, today. Every time I bought, I thought that we had reached a new floor.
I will need to put this in my lesson learned package and be more patient buying back when it is droping like a rock.
For those who gave me a hard time and made me feel bad for selling at $5.10+ after Q2 results I hope you also learned to be more respectful of others on this board.because you have a different approach of investing.