Markets are moderatly higher this morning.
Bombardier is up another 7.8% to $1.94. Looking at this I wondered if I should sell some of my position. It’s a relatively small position for me. I don’t recall if my last purchases were above this price or below (which is not supposed to matter in the sell decision, especially in a non-taxable account, but inevitably weighs on my mind). I know my average purchase price was higher than the current price. In the end I decided to sell 20% of my position today at $1.94 and entered an order to sell another 20% at $2.50, if it should hit that price in the next month. This volatile stock is jumping around on news and speculation at this time and certainly could continue to rise from recent depths. But ultimately it is a poorly managed business in a horrible industry and it seems wise to reduce my position. Entering the above-market limit price allows me to proceed to hopefully sell the next 20% without emotion clouding my thinking.
Canadian National is down 6.5% today to $77.44 based on lower profit guidance. History suggest that this decline will ultimately be nothing more than a little blip down on a long upward trend. CN is celebrating having completed 20 years since its IPO in 1995. The IPO price was $2.25 (slit-adjusted) on November 17, 1995. The first trading price shown in Yahoo Finance is $4.60 in November 1996. CN points out that its earnings per share have grown at a compounded average of almost 20% since the IPO. The stock price gain since the IPO is a compounded annual average of over 19% (excluding dividends). Even if bought a couple years after the IPO, CN has compounded share owner wealth at a remarkable rate. Anyone who held for longer periods of time has done very well. So much for the very wrong-headed notion that “buy and hold is dead”.
I first added CN railway to this site on August 27, 1999 at $8.08 (split-adjusted) although rated only Speculative Weak Buy. Over the years I consistently saw it as a strong and well-managed company but it often looked expensive. I did rate it Strong Buy on January 25, 2007 at $26.50 and rated it Buy or (higher) Buy on some other occasions over the years.
CN’s initial huge success was guided by CEO Paul Tellier, a former top ranking federal government employee. It’s sad to note that Bombardier managed to hire Paul Tellier after his retirement from CN but that he ended up leaving apparently, as I understand it, because they refused to let him actually run the company.