Sell Costco out of Jubak's Picks to raise cash

12/28/2012 5:10 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

On December 26, I wrote that raising some cash in the uncertainty over the U.S. fiscal cliff made sense. Yesterday, I wrote about how to decide what to sell to raise cash and recommended selling Costco Wholesale (COST) out of Jubak’s Picks http://jubakpicks.com/.

My reasoning? Two weeks ago I posted http://jubakpicks.com/2012/12/12/subdued-reaction-to-earnings-beat-from-costco/ that I thought I’d got most of the gains out of owning Costco Wholesale (COST) that I could expect for a while, especially after a $7 a share special dividend, but that I would hold on for a bit further into December since, on December 12, the market seemed to be trending upwards. Holding on now for an upward trend that seems to have vanished doesn’t make sense. A stock like this is a good source of cash right now.

I’m selling with a 2.1% gain since I added the stock to the portfolio on October 24. Add in the $7 a share dividend and the total return comes to 9.4%.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/, may or may not now own positions in any stock mentioned in this post. The fund did not own shares of Costco as of the end of September. For a full list of the stocks in the fund as of the end of September see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/

 

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