Small adjustments in the portfolio.
I bought a spoonful of Paradox around 183 kronor. I considered the stock already between 150-160 kronor, but I didn’t get around to grabbing it. The latest game release is once again proof of the company’s core portfolio’s development strengths. One more legacy offshoot will probably be released next year, and then the profitability and almost continuous cash flows of the company’s core games will become clear to the public.
Because I like cash so much, I correspondingly lightened my position in q.beyond by a spoonful with small profits.
With these German underperforming turnaround companies, I have strict rules:
Sell, if
a) They hit the fair value I’ve defined using the VEHI method
b) They deviate even one step from the development path I’ve defined. Many investors invent a new story for a turnaround company if things don’t go as planned, and I try to avoid this pitfall like the plague.
or
c) I find businesses with high return on capital and deep moats at a reasonable price to replace them.
In this lightening of the position, point C applied, as A or B would lead to emptying the entire position.
For some reason, q.beyond is still one of my largest positions. Just yesterday, I was talking about it with an investor friend and noticed that I myself started to feel ashamed as the atmosphere became awkward, even though he didn’t directly condemn me for it politely.
Those German companies are a bit like starting to complain aloud about one’s own gout, shingles, nail fungus, or flatulence. Socially just as tasteless and awkward, all the same.