The 17.72% I left on the table

How a stock ends up on my "sell" list

Before I get to what I sold, the setup. I keep a watchlist inside my own dashboard, and every stock I own carries one of three labels — Hold, Watch, or Sell. A stock gets the Sell label when it slips below a set of minimum-quality rules I use to decide what's worth owning: things like is the company actually profitable?, is the debt getting out of hand?, does the price still make sense? When a name slips below those rules, the Sell label goes on.

Once the Sell label is set, the decision is made. The only question left is when to actually push the button.

I also have one rule about why a stock leaves the portfolio at all. It has to be one of three reasons:

1. The company has fundamentally changed for the worse.
2. I was wrong to buy it in the first place.
3. I've found something clearly better for the cash.

All three of this week's sells were reason number one.

What I sold, and why

These three names had been sitting on the Sell list for weeks. Monday morning I cleared them out.

• AUPH — Aurinia Pharmaceuticals, a small biotech. One of the quality checks I run watches a company's financial statements for signs that management might be quietly overstating earnings. AUPH's reading was the worst I'd ever measured on a stock I held. That's a "get out" signal, not a "wait and see" one.
• STLA — Stellantis, the auto maker behind Jeep, Chrysler, and Ram. The company was losing money on every dollar shareholders had invested — what the industry calls return on equity was running at −36%. A second financial-health check I use, which grades a company across nine indicators, also came up short. Two failed checks at once is enough.
• ICL — ICL Group, a fertilizer company. The cleanest failure of the three: down 36% over the past year while the broader U.S. stock market (the S&P 500) was up. My quality grade for the company flipped from green to red over the same window.

The exits closed Monday morning. AUPH at $15.19. ICL at $5.45. STLA at $7.28.

The rebound

Monday May 4 was a down day across the market. The S&P 500 finished red. My three sell tickets went out at the bottom of that move. Then the names rallied through the rest of the week.

ICL is the headline — a 17.72% bounce that held all the way into Friday's close. STLA finished close to its weekly high too. AUPH peaked Thursday and gave most of it back by Friday, so the sting on that one was the smallest.

What this week cost — and what it should cost you nothing to avoid

If you batch your sells on a Monday — especially when the market is already down — this is the cost you don't see anywhere. The decision was already made. The only variable left was timing. I gave that variable up by clicking three times before lunch.

The fix is free. Spreading the exits across a few days, or waiting for an up day, doesn't change the trade — it just changes the headline price. Even letting these tickets sit one extra day would have caught most of the bounce on two of three names.

That's the one thing I'd do differently this week. It's not a strategy change. It's a tempo change. And the cost of getting it wrong is a number I'll never see anywhere in my dashboard, because the trades are already booked.

What I bought — and how I found them

Once a week I run what's called a stock screener — a tool that takes the thousands of stocks listed in the U.S. and Canada and filters them down to a short list of names that pass a set of quality and value rules I've written. I run a few of these. The one I rely on most for finding new high-conviction picks is the one I call the Prospector.

This week the Prospector surfaced four names mid-week. Three of them turned out to be gold mining companies. The fourth is a cash-rich pharmaceutical company.

When the same screener turns up three names from one industry in a single week, that's usually the screener telling you something about the moment. The three gold miners passed my quality and value rules at the same time, in the same week — that doesn't happen randomly. B is the early standout: it pays a dividend (a regular cash payment a stock makes to its shareholders) of about 3.9% a year on the share price, and a Tuesday entry that has done most of the work already. GILD is the lone red name so far.

What I'm watching

Whether the gold-mining cluster keeps its bid into next week. Three names from one industry landing on the same Friday is a moment, not a trend — the question is whether it's the start of a real move in the sector or a one-week coincidence.

Whether GILD turns green or stays the post's red note.

How the portfolio did

Up +1.89% on the week. The strategy is tracking. The number is smaller than it should have been by roughly the margin Monday's timing cost me — a real but small price for a real but small mistake.

Three sells. Four buys. One lesson worth keeping.

Don't execute already-made decisions in a single morning. The decision is the work. The timing is a discount you can give yourself by mistake.

— Mark

— Mark