When I saw that Berkshire Hathaway was buying out Precision Castparts last weekend, I got that good feeling you get when you know one of the stocks you own was about to increase in value. However, as I looked at it a little closer, it just made me feel like I missed an opportunity.
I started accumulating Precision Castparts late last year, when it showed up on my list of stocks that met my criteria. Management seemed to be sound, stable industry, reasonable valuation – a good long term holding. Unfortunately for me, my timing was lousy because soon after I built my initial position, the stock dropped roughly 20% on lower guidance due to the strong dollar and exposure to the energy sector. I think I should of looked closer at the stock before I started accumulating, perhaps I would of held off a bit.
I will give myself some credit – I did add to my position even after the stock dropped – I try to follow the old saying ‘If you liked the stock when it was 20% higher, you should really like it now.’ It’s hard to follow this adage, but I felt the leadership was still good and hopefully most of the bad news was out of the way.
So its nice that in the end my analysis was vindicated, and I can now claim to almost be as smart of investor as Warren Buffet. However, in the end, if feels like I botched it. At the Berkshire Hathaway takeover price, I will probably break even on my investment, maybe come out a little ahead. To add insult to injury, that position I added $210 a share will likely be taxed as a short term gain, and its possible my initial purchases will be a long term loss, though it will be minimal.
I have come to accept that in investing you win some and you lose some – it just comes with the territory. It’s just that in this case, it feels like I should of won and I didn’t.