Thursday, January 13, 2011

Selling More BAM

In December I reduced my position in Brookfield Assets Management (BAM) and blogged about it. My blog entry was republished on Seeking Alpha site (here) and all comments were negative. I.e. everybody thinks that I was wrong. They think that I don't understand company's business.
I gave it some thought. And agreed. Looks like I really don't understand company's business anymore. From being mini-Berkshire (Hathaway), it became concentrated in three major areas: timber, in which I really understand nothing, hydro generation, and commercial real estate. I understand a little of last two, but probably not enough. And I don't understand why company in such business would have future P/E around 30 and PEG above 2.
Decision is easy enough. If I don't understand business, I shouldn't be invested in it. I am scaling out of this stock, sold another portion on Jan 11.

Full disclosure: at the time of publication author had a long position in BAM. Positions can change any time.

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