Trade Executed

Late last week I published a post that was mostly about investing in Australia. As is often the case I wrote that post the night before it published on the blog. In a strange coincidence almost immediately after that post published there was news on our holding down under, ASX Limited (ASXFF or ASXFY), that I felt warranted an immediate sale of the position.

The company will have to compete in its exchange business (not new news), will also have to compete in its clearing business (this was new to me) and like many markets, the volume is way down. This has not yet been reflected in any meaningful way in the price of the stock and it may never, however the nature of exchange stocks is that when they do start to go down that can do so very quickly. At least this is my observation.

All holdings have various types of attributes or characteristics that I believe need to be understood and with publicly traded exchanges they are capable of turn around in a hurry--more so than most segments.

Clients who were with us in late December had a small gain plus they collected good sized dividend a few months ago. RRGR had slightly smaller gain but the inception of the fund was after the dividend. I am disappointed that we had to sell so soon and feel a little silly given the post that ran the other day but these things are of course far less important than being willing to sell when you perceive that the fundamental story could be threatened.

Again the reasons above may not actually hurt the stock but the number of risks just increased so I took action. This was not a top down decision to sell Australia, it was a bottom up sale based on news from the company so the next step will be working on how to replace the exposure. For large accounts, Australia has always meant individual stocks but maybe one of the ETFs will make more sense--either way I will post about it when the time comes.