If you read my blog long enough you’ll see a trend in my distrust for any security that goes parabolic. Parabolic moves are terrific with the resulting capital gains that can be quite large but they also present unusual volatility. No parabolic move is sustainable, eventually profit taking will begin and it can be dramatic and in many cases the security never recovers, check out the chart of AAPL from 2012.
In recent days I’ve noticed that the bid price for Fab Universal to be quite soft at times. This means that despite trading 2 or 3 million shares a day the bid price was not firm even for small orders of 10,000 shares.
Hence, despite FAB Universal retaining a very high ranking in our model I’ve sold off a substantial percentage of the shares so that most of the original principal invested in the shares has been extracted and we’ll let the stock run and sell the remaining shares when the model gives the order.
In addition to selling off a chunk of FU we’ve sold all of our YONG or Yongye Intl. YONG received a buyout offer at a modest premium to our purchase price.
Long FAB Universal