EQI sold…

In a previous post I mentioned that I need to post my rationale for selling as well as buying. I sold out of 3 positions in 2011. So far one I look smart, one is too early to tell, and one I look like a bonehead. That’s EQI…

I sold out of EQI, formerly GHC, at $8.25. This was the very low end at what I thought EQI was worth. My thinking was that EQI was traded at a fair price, vs. slightly lower than fair price when I bought, and I didn’t have any real insight into the specialized mortgage market they were entering.

I bought around $6.40 and sold at $8.25. I held for just over 5 months. That’s a 29% return compared to the TSX at 11%. That sound good, but EQI has since jumped in price to almost $11. That’s missing the boat. EQI is a good business, maybe even a great business. They have quality management in the right industry (for now at least). They did execute all their initiatives and trade a well deserved premium. That’s were I struggle. I know cheap and kind of ugly. But this is closer to good/great quality at a fair price. More of a modern Buffett investment and my style is leaning to statistically cheap unless I really understand the industry.

I guess I’m happy with my position. I outperformed the TSX and I don’t think I took on any more risk. I can guarantee that there will be more stocks to run away right after I sell. After all, it is the curse of the value investor.

Dean

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One response to “EQI sold…

  1. Pingback: EQI sold… - Petty Cash - B-Hive - WAGGLE

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