Everybody has rules governing personal conduct. This is certainly the case with investors in the stock market. Most of us employ boundaries so as to avoid becoming prey to our momentary indulgences, oft times irrational as we humans tend to become when the planets rearrange in unfamiliar ways.
When ALDW was in the process of being swallowed by Delek (DK), I sold off about half of my large position. I wanted to sell the entire position as I was unhappy with the lack of clarity regarding ALDW rights being respected. As friends know, I will always sell up to half my position when there's an obvious lack of visibility. Such was the case with DK following the big swallow. I was holding 3,500 shares of DK...this includes the ALDW conversion of units to shares.
Today I hold 660 shares of DK. And at this moment I have 100 DK shares up for sale at $40.10. DK shares tend to rise in early trading on what appears to be a regular pattern, only to fall back at least half that amount by the close of trading. Thus, my sales have occurred at mid-day for the most part.
The "experts" maintain DK is heading for a $46 valuation. That's wonderful for those who aren't uneasy over the mishandling of ALDW's unitholders' interests. We clearly have been denied our right to the final two quarters of distributions---without apology or even the slightest degree of recognition. I find that unacceptable and need to walk away.
At the same time, I've got rules of conduct as mentioned earlier. And so it is that I've continued to play the "ride" upwards, enjoying bloated returns while selling DK shares. I've made a whole lot of money exploiting this opportunity to prosper while disliking Delek. And now that shares are at or very near the $40 level, it's approaching close-out time for me. Is there more to be made? Sure! Do I dare stay with any company's stock when I'm convinced they don't play a fair game of ball and--I figure---sooner or later they're going to pay the piper?
NO!!! Definitely NOT!!!
However, lest you think this is about anger, let me explain the real motivator here:
I usually keep about $20,000 in cash (dry powder) in a checking account tethered to Ameritrade which is my brokerage of choice. As I sell off DK/nee ALDW, I remove the cash and place it temporarily into the ACH-propelled checking account. This money will be used for future acquisitions.
The catch here is that I'm now sitting on $140,000 in dry powder. It will continue to grow, in all likelihood.
Two things here worth mentioning:
1. I'm convinced the market as a whole is poised for a big drop. When it happens, I want to be holding a lot of cash so that I can cement opportunity while the eventful moment is unfolding.
2. If I can get $40 for DK? I'll take it! Am I walking away from the possible $46 gurus see? Perhaps so. So what? I'm sitting on plenty of cash and most of it is the result of gains made possible through ALDW and DK combined. There's a day in every cow's life that the milk slows and eventually falls away entirely.
I don't pretend to know things others don't. But I strongly advise everybody here to consider that if and when the stick-in-the-eye moment happens, best to be ready to self-protect. Cash is the best way to re-engineer safer passage towards the uncertainties of an unfamiliar future.
NGL may well be the safest and smartest play in the book for me.
Good fortune, everybody!
P.S. In reading/sharing the above with my wife who holds an MSW (Master's degree in social work), I'm realizing I may not have been as direct as needs be understood:
I'm of the belief that the market is going to give back maybe 2,000 points (the DOW). It will be fast and furious, in my opinion. My discourse above has been my effort to bring others here to consider the possibility that my prediction will, indeed, take place. I want everybody to be ready as I am ready.
If I'm wrong? I can always find ways to spend and reinvest. For now, though, it's important to keep tensions in a subdued state.
We always must protect ourselves, first and foremost.
