Taking Profits in Intuitive Surgical

I love this company. Intuitive Surgical (ISRG) is a true paradigm changer. It makes surgical robot systems Da Vinci, which are adopted around the world. Initially systems were almost exclusively used for prostate removal. Many analysts tried to predict Da Vinci sales based on this. They were completely wrong. FDA approves new uses of the system all the time, hospitals around the country are experimenting with even more new surgeries.
Company has all components for continues explosive growth. Da Vinci is the only robotic system which has FDA approval. Which means it has a moat, speaking in Buffett's terms. A lot of revenue comes from service and spare parts sales, which is a very stable source of income. New surgeries means new sales.
Why am I selling? First of all, I'm selling only a small part of position. Even after this sale, ISRG is the second biggest position in my portfolio. Again, I love this company. But profits are made to be taken. Discipline trumps conviction. Stock almost doubled this year. And my initial investment into company has quadrupled. Any reason is good enough, taken all together, they told me: take the profit. At least some of it.

Full disclosure: I still have significant long position in ISRG.

Closing Logitech

One more trade gone bad. My worst trade of the year.

I bought Logitech (LOGI) as a trade on return to averages. After stock went down about 20% I thought that it should return back to 200-day moving average. Market didn't agree with me.

Lessons:

1. There was sharp fall in most tech in the middle of the year. It was a good hint for me to close the position. I ignored it. My bad.

2. I misjudged market reaction to the failure of Google TV device, produced by Logitech. I thought that projected sales of the device weren't that great in the beginning and failure wouldn't count for much in the balance sheet. Market ignored the financial side and decided that failed hype should be punished.

3. Last, but not least. I need to put strict time limits for any technical/quantitative trades. It creates discipline which trumps conviction in the long run.

Why I Sold Intel

I closed position in Intel (INTC) today. Decision was made when I heard a preannouncement a week ago. Intel said that revenue for the quarter will miss the mark by smothing likt 15%. They claimed floods in Thailand and subsequent deficit of hard disks reduced production of PCs, and demand for Intel CPUs. Well, it figures.
What was surprising is the reaction of Wall Street. Quarter earnings estimates were cut, but just a little bit. I couldn't believe it when I saw it. Look at the income statement. There are two major expense categories: "Research and Development" and "Selling and Administrative". For Intel, that's essentially fixed costs. I feel that INTC is going to miss initial profit estimate by 25-35%, not by 14%, which is current consensus.
Intel is a great company. It will recover. And it pays great dividend. I think it will fall hard after reporting for the current quarter. It will be time to back up the truck. For now, I prefer to take profit and wait for a good moment to get back.

Full disclosure: I still hold small INTC position on my IRA account.

Why I sold Goldman

I bought Goldman Sachs (GS) in the beginning of 2010. My main idea was that if banksters are crooks and earning big money, I want a piece of action (and it's legal!) Reality interfered. All financials are down (lucky me, got rid of everything else long time ago). It doesn't matter if GS is full of crooks, or management is bad, or it's just bad luck. They lost. I lost with them.

This is not a usual tax related sale. Size of the position and loss I'm taking are not big enough to make any difference. It's a strategic sale. I don't believe in financials right now and I don't want to go into next year with them. Position is closed and forgotten.

AT&T Is Not Buying T-Mobile! I'm Happy

That's great news! I was outraged when heard about the deal in the beginning. But it looks like Justice Department is doing its job, at last. If antitrust enforcement was really good in this country, Ma Bell wouldn't even think about it. But enforcement was lax, so they decided to try. No way.

It's especially good news for T-Mobile (DTEGF.PK) customers. AT&T (T) is consistently worst cell company in the country. I've been there, couldn't wait for 2-year contract to end.

T-Mobile wants to find a buyer? Maybe Vodaphone (VOD)?

Full disclosure: no positions

Cleaning Up More

Closed position in Morgan Stanley India Investment Fund (IIF) today. Another trade which became an investment. I am not sure if this conversion was right or wrong. Result is bad, sure, so it was wrong. I still feel that India is punished for wrong reasons and I'm still holding a significant position in India Fund (IFN). But it's a season of selling for tax reasons. This is a first time in my investing life I'm doing it. Thing is, I sold a lot of positions, taking a lot of profits, did some profitable trading and received a lot of taxable dividends. Now is the time to take some losses too.

Waiting For Santa

There are two questions (in no particular order) for the last two weeks of the year.

Are we going to have Santa Claus rally?

What is the window dressing trade for year end?

Santa was detected well beyond horizon in the end of November. Then he disappeared from the radar. Todd Harrison still thinks that reverse head and shoulders pattern in S&P is not broken, I'm not that sure. We'll see.

Window dressing looks strange. If I'm not mistaken, everybody is selling everything, with exception of muni bonds (I'm glad that I have a significant overall position in several muni CEFs). Another exception: very small number of Nasdaq large cap stocks (GOOG and ISRG in my portfolio). Can we profint from it? I don't know. The most obvious sell-off is in commodities, but swings there can be very big in a very short time and it's a dangerous game. And don't tell me to use tight stops: as they say in London Tube, mind the gaps. Gold behaves strangely. There was a headline on CNBC couple of days ago: "Gold drops 3 percent on Technicall Sell-Off, Euro Fears"". I thought it was a bad joke, looked for similar headlines in Google, there are dozens of them! Come on, people, gold should go up on fears, not down. I think we see a breakdown of the parabolic chart. Two months ago everybody was buying gold, now last fool owns it already. And some fools forced to sell on margin calls.

I'm sitting tight.

Full disclosure: At the moment of publication author had long positions in GOOG, ISRG and muni CEFs:  BTA, CEV, MZF, NMO.

PS. Events in Russia are developing fast, and accelerating. I don't know how they will end, one thing is clear: there will be changes. My heart is with people who went to the meetings in Moscow and other cities on Dec 10. There will be more meetings tomorrow, on 24th and later. The white ribbon below is the symbol of, I hope, new Russia.