Poor execution of a company’s strategy, product development or product introduction will trigger a review. A significant change in the growth characteristics, competitive nature or debt levels of the sector into which the company sells its products will also result in a review. For example, as growth in the technology and telecommunications sectors slowed in 2000 and 2001, portfolio exposure to those sectors was reduced.
Ulland Investment Advisors takes a long-term view on allowing stocks to reach their potential. Volatility in stock price is expected. However, deterioration or instability in the company’s fundamentals or in the characteristics of the sector will signal a review and often a sale of the stock.
Inadequate or poor quality information from a company’s management generally results in the sale of the position.
Stocks performing well may appreciate beyond what is considered full value. These overvalued positions are trimmed so that the proceeds of the sale may be reinvested in more favorable situations. If a stock appreciates to the extent that it exceeds 10% of the entire portfolio’s value, it will be trimmed annually or more frequently so the portfolio does not become overweight in one position.
Investment Styles
