Tuesday, March 11, 2008

* A Strong Bias for Action

I love to play chess. The strategy, the conflict, the ability to maneuver and attack all invigorates me. There is a great adrenaline rush when when my opponent realizes he is losing and there is nothing he can do about it. Unfortunately, I don't experience this rush often. Though I love to play chess, I am not very good at it. The primary reason for my poor performance is that I love to attack relentlessly. I usually don't play with my head and end up making bad moves.

A strong bias for action. That's what my HR professionals tell me I have. It is not always a bad thing. We are the doers, the ones that get things done and, unfortunately, we are the ones also that sometimes dramatically crash and burn. The latter is what often scares some to inaction. I work with managers (and executives) that have a hard time pulling the trigger and making a decision, then executing.

As noted in yesterday's Consolidated Edison (ED) stock analysis, my perspective toward this stock has changed. Back in December when I reviewed ED, I was quite harsh toward it and made statements such as "ED is not a stock I want to hold in my portfolio" and "I do (embarrassingly) own shares of ED". I was about to rip the whole investment out by its roots and rid my portfolio of it. Then I stopped, and thought, why did I buy it in the first place. It was a safe investment that would act as a counter-balance to some of my more riskier investments. I did not allow myself to sell anymore after that. Given its valuation in December it was not a good buy then, but I would buy it today if my allocation needed it.

As mentioned in Saturday's post "Time is My Friend", I have determined I want to own three to four banks in my portfolio. That means I need to divest two or three stocks. I will over-come my urge for action and patiently wait until it is evident which stocks should be divested. In the same vein, I have determined that I need to own two or three utilities. I will look for good buying opportunities to add to my positions, when appropriate, and evaluate the possibility of adding a third utility to my portfolio. Good things will come to those who wait (and think while they are waiting).


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