Today we’ll be picking on me.
Most of the time, I’m smart (or lazy) enough to pick a diverse basket of companies and mutual funds in which to invest and then I go about my business.
But sometimes, I feel the need to outsmart the market. Perhaps I can make a killing by reading the tea leaves and making a move. Luckily I keep score and I have evidence to prove that I’m horrible at this.
Struggling Companies
Nothing’s worse than seeing a company we once loved circling the bowl. We had such high hopes. And sometimes, there is a huge run-up before the fall and we’re giddy with delight right before the stock price comes crashing down.
But either way, at some point we did some analysis and we chose to put our investing dollars to work in this company rather than the thousands of other options available to us. I’m a patient man, but I expect returns – eventually.
Late last year, I decided to cut bait on 3 of my holdings. Chipotle (Ticker: CMG), Salesforce (Ticker: CRM) and Old Dominion Freight Lines (Ticker: ODFL).
I had held each of them for more than 3 years, but they were now in long-term slumps.
After years of being able to hike prices and keep customers coming back, Chipotle was in a sales slump. I couldn’t see this ending soon with stubbornly high inflation.
Salesforce I have a love/hate relationship with. I dumped shares years ago when they had a couple of senior management resignations. 2 co-CEOs quit within 2 years. But then I bought more shares, because I do think they are a leader in CRM tech. But it’s tough to buy back into a company in which we have doubts. CRM had a short leash.
And I love Old Dominion. We buy lots of stuff and truck it around. They are a premium choice in the industry. But times have not been good for the trucking industry. That’s trucking with a “T”. After years of outperformance, ODFL is lagging and the industry is facing driver shortages, as well as some lawsuits for some of their drivers (but that’s a story for another day…)
Sell Sell Sell
I sold all 3.
How are they doing since?
I’m OK with my Salesforce sell. My conviction was low and I need to keep reminding myself that a great company + low conviction is a recipe for selling on tough times, and every company falls on tough times at some point. Buying back in is usually not a great idea for me.
The other 2 stick in my craw. 2 businesses I love and I sold them too soon. Probably, who knows what the next 20 years will bring, but I’m not feeling good.
…And Thank God I Didn’t Sell…
In a couple of recent posts, I’ve talked about the amazing runs Caterpillar (Ticker: CAT) and Cummins (Ticker: CMI) have had. Both were up about 50% in 2025. These are large industrial companies, not tech start-ups.
So after enjoying huge gains, I’m thinking these must be overvalued so maybe I should sell some. I wrote about this in Are We In A Bubble? Why It Doesn’t Really Matter.
For those who haven’t read, I got really spun up about whether we were in a bubble and whether the stock market was overvalued. The market was up more than 20% in both 2023 and 2024, and was up again about 17% in 2025.
I made a spreadsheet of all my potential sells, and then came to my senses and didn’t sell anything.
2 companies that were high on my sell list were CAT and CMI. Both of which are up about 8% in the last 2 weeks. Glad I did nothing!
Wrap Up
The big lesson to be learned is that I can’t predict the future, and neither can most of the financial media and financial professionals.
But that said, I have a pretty good track record at predicting what will happen in the next 20 or 30 years. I wrote about this in So How Do I Know The S&P 500 Will Go Up?
Which means I shouldn’t try and capitalize on what I expect will be the next big short term move. But if I focus on what I think will be the next sustainable trend, I’ll probably be OK.
I think the US economy will continue to grow. We’ll continue to invent stuff, we’ll continue having babies, and for the foreseeable future, I expect the market to grow along with the economy. That makes a nice low-cost S&P 500 index fund a great choice.
I’m also sticking with Cummins and Caterpillar. I expect at some point they will each have a pull back. Maybe 2 or 3. But as I look forward 20 years, I expect man will continue to build roads and bridges, maybe not data centers, but if not we will find something else to build. To do this we will need heavy equipment from Caterpillar and engines from Cummins.
So for me, when I start to feel like I need to make a move to capitalize on what I expect to be a short-term movement, I now have 2 spreadsheets to remind me that this may not be a great idea.