In the first half of 2024, I made several strategic decisions to sell off stocks from my portfolio. Although I consider myself a long-term investor, my approach often involves reassessing the viability of my investments. In this article, I'll share insights on the eight stocks I sold between January and July this year, and how these decisions have fared compared to the broader market.
1. Intuitive Surgical (ISRG)
Reason for Sale: Overvaluation
Intuitive Surgical, known for its Da Vinci robotic surgical systems, was sold on May 5, 2024, primarily due to its high valuation. Despite the company's strong fundamentals, the stock surged 18% since my sale, while the S&P 500 increased by only 3%. Although this was a losing decision in the short term, the high valuation made it a necessary move.
2. MongoDB (MDB)
Reason for Sale: Moat Durability Concerns
On June 6, 2024, I exited MongoDB due to concerns about its market position and potential competition from other NoSQL databases. Since then, MongoDB has risen 6%, outperforming the S&P 500's 2% gain. This stock's performance has been mixed, but the decision was based on potential long-term risks.
3. Alphabet (GOOGL)
Reason for Sale: Moat Durability and Competitive Pressure
I sold my Alphabet shares on May 10, 2024, due to concerns over its competitive moat amid growing threats from competitors like Microsoft and ChatGPT. Since the sale, Alphabet has declined by 5%, whereas the S&P 500 has risen by 5%, validating my decision.
4. HubSpot (HUBS)
Reason for Sale: Overvaluation
On June 18, 2024, I sold HubSpot after the stock price soared due to acquisition rumors. Despite the company's quality, the price was unjustifiable. Since then, HubSpot's stock has decreased by 14%, while the S&P 500 has dropped by 1%, making this a favorable decision.
5. Viva Systems (VEEV)
Reason for Sale: Valuation and Optionality
I exited Viva Systems on March 13, 2024, concerned about its high valuation and limited growth potential. Since the sale, the stock has fallen 20%, while the S&P 500 has increased by 6%, demonstrating that the decision was prudent.
6. Paycom (PAYC)
Reason for Sale: Management Concerns
On February 13, 2024, I sold Paycom due to skepticism about management's explanations for the company's performance issues. Since then, the stock has plummeted 17%, while the S&P 500 has risen by 11%, validating this decision.
7. Unity Software (U)
Reason for Sale: Management and Performance Issues
I sold Unity on May 15, 2024, following disappointing earnings and ongoing management concerns. The stock has decreased by 29%, contrasting with the S&P 500's 3% gain, making this a successful decision.
8. Atlassian (TEAM)
Reason for Sale: Increased Competition
I sold Atlassian on March 12, 2024, due to heightened competition in the collaboration tools market. The stock has since dropped 34%, compared to the S&P 500's 6% rise, affirming the decision.
Conclusion
In the first half of 2024, I made strategic decisions to sell several stocks from my portfolio, driven by factors like overvaluation, competitive pressures, and management concerns. While some sales initially appeared unfavorable, the overall performance of my reallocated investments has validated my approach. The stocks I sold have underperformed compared to the S&P 500, and my new investments have shown substantial gains, reaffirming the importance of reassessing and adjusting one's portfolio. This experience underscores the value of staying vigilant and responsive in long-term investing.
