Sell 200 Shares Of Costco (COST) On 12/14/2017

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? 

3 Responses to “Sell 200 Shares Of Costco (COST) On 12/14/2017”

  1. eric says:

    Hi Bruce,

    I was wishing I had bought COST when it dropped with the AMZN/WFM buyout, but everything is hindsight.

    My question is if it would have been a good idea to have put a trailer stop on COST rather then get out completely, in case it had an upside movement after the earnings report?

    Thanks, Eric 🙂

    • Bruce Alan says:

      Hi Eric,
      Putting in a trailing stop instead of outright selling would have been just fine and some investors might like to do it that way. Of course if the stock price had dropped after earnings I would have ended up getting a lower price than I got and that is the risk.

      Personally, I just choose to decide when to sell and live with the consequences. I win some and lose some, and with the market going up for so long I have lost more than won lately.

      I might add that I have become increasingly scared of the market because sooner or later it seems it has to selloff 10% to 20% as it can’t keep going on like this forever! So I was sort of happy to take some money off the table and cash in my Costco stock with a nice gain that I was happy with.

      Lesson to be learned: no matter what decisions you make in the stock market, it is always easy to second guess yourself.

  2. Adam says:

    Hi, Bruce!
    Following your blog with huge interest.
    Keep it up!

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