I decided to sell all 200 of my Costco shares yesterday about an hour before earnings were announced. You can see the details of when I bought the shares and my profit below.
Why I Sold Costco
In July of 2017, Amazon bought Whole Foods and Costco shares really took a hit. In a matter of days the stock dropped from the $180’s into the $150’s on that news. I decided to buy another 100 shares at about $159 per share and have since watched the stock steadily move back up near all time highs. I’m glad I bought those extra 100 shares!
But Costco stock has always been expensive P/E wise, and I’ve become increasingly nervous that the overall market is just too high. Stocks have gone up so far so fast this year that part of me is just plain scared that at some point soon the market will start to drop for real. If this happens, I think the more expensive stocks (like Costco) will suffer bigger drops than the cheaper stocks.
So basically I’m saying that I wanted to lock in that almost $9,000 Costco gain because I thought/think the odds of COST going down are greater than it going up in the foreseeable future. I wanted to take some money out of stocks and Costco seemed like the best option. Earnings releases can always result in big selloffs (and gains) and I was nervous that should Costco not hit it out of the park along with supplying good guidance, the stock would go down and I’d regret having not sold.
***Unfortunately for me, I wish I had NOT sold. Today (12/15/2017) COST is up more than 3% on earnings that investors obviously loved. So far this year, selling almost any stock has been a mistake as the stock market continues to go up without hardly a correction. I wonder how long it can last?