5 Stocks to Sell for 2011

It's almost time to sell!

December is normally the month famous for its tax selling -- i.e., selling stocks that have fallen in value to get tax deductions.

But I'm going to propose doing some selling in January. Why? Because the recent market run-up has a few notable stocks selling for much more than they're worth. And if we sell in January instead of December, any tax consequences from gains will be on 2011's taxes instead of 2010's.

I've identified five stocks that are excellent sell candidates, two of which are in my personal portfolio. Let's start with the three I don't own.

Three to sell
Each of the companies below have had nice run-ups in recent months, giving us tempting potential exit prices. Check out my summary, then I'll explain further.

Company

Current Price

52-Week Range

Will It Be Around in 10 years?

Why Sell?

Wynn (Nasdaq: WYNN  ) $104.16 $58.21-$117.50 Yes, barring liquidity issues. Purely price.
Netflix (Nasdaq: NFLX  ) $185.38 $48.52-$209.24 Yes, in a weakened form. I doubt its growth prospects.
Vonage (NYSE: VG  ) $2.48 $1.30-$2.79 Doubtful. It's dying.

Source: Google Finance.

The companies I've listed run the gamut in terms of actual business health. This is because no matter how great a company is, if its stock is too expensive, it can still lose you money.

But being a great business isn't a problem for Vonage. I see no way out of the funeral parlor for this voice over-IP pioneer as Internet options like Skype nip at the low end, and bundling options from the likes of Verizon and Comcast dominate the high end.

Netflix runs a business many of my fellow Fools, including our co-founder David Gardner, adore. I've been a customer so I can attest that they do an excellent job. And they're giving it their best as DVD's convert to streaming. But I see the Red Envelope Warrior as capable of defending its empire, not expanding it. The market is pricing it for the latter.

Wynn is actually my favorite of the Big Three Las Vegas casino operators. Its balance sheet, though leveraged, is much stronger than those of MGM (NYSE: MGM  ) and Las Vegas Sands (NYSE: LVS  ) . I also like its conservative-compared-to-MGM-and-Sands growth strategy. And if I'm going to gamble with any casino's management, it's with the bold, straight-shooting Steve Wynn. But now that its stock price has recovered from the teens to its current perch above $100, it's time to consider taking chips off the table and waiting for lower prices to rebuy in. 

Two on my personal sell list
Here are the two I'm considering selling myself.

Company

Current Price

52-Week Range

Will It Be Around in 10 years?

Why Sell?

Whole Foods Market (Nasdaq: WFMI  ) $50.91 $26.88-$51.75 Yes. Purely price.
Tempur-Pedic (NYSE: TPX  ) $39.73 $23.45-$40.23 Yes, barring liquidity issues. Price given risk from a leveraged balance sheet.

Source: Google Finance.

Whole Foods and Tempur-Pedic present the classic growth stock problem -- sell a stock that looks fairly to-richly valued and miss out on possible growth-fueled gains or hold onto a stock that could come crashing down when growth moderates.

I'm a fan of the business prospects of both companies. Whole Foods is riding an organic food trend that doesn't appear to be a fad. And Tempur-Pedic makes a quality product (in this case, mattresses) its customers swear by.

But in the case of Whole Foods, a lot of growth is implied in its 35-times-earnings stock price. Tempur-Pedic's valuation isn't as rich, but I like a bit of a discount given its debt load.

At today's prices, I prefer the stocks of Whole Foods and Tempur-Pedic to those of Wynn, Netflix, and Vonage but come January I will be seriously considering selling at least part of my positions in each.

I don't want to leave you on such a negative note, though. If you do free up some money from January stock sales, consider the stock presented in our brand new free report: "The Motley Fool's Top Stock for 2011."

There's no charge for the report, so happy holidays from the Motley Fool! Click here to download the report.

Anand Chokkavelu owns shares of Tempur-Pedic and Whole Foods -- but we'll have to see come January. Netflix and Whole Foods Market are Motley Fool Stock Advisor picks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (40) | Recommend This Article (119)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 23, 2010, at 4:00 PM, Maksani wrote:

    Just like as with million other companies revenue will fall after earnings season. If the company and product is superior, like TPX, maybe your holdings will stay strong, so I suggest using a stop or trailing stop.

  • Report this Comment On December 23, 2010, at 5:03 PM, FutureMonkey wrote:

    I'm not sure that "purely price" is a vaild reason to sell. unless you no longer believe in the core business underlying the shares. Trying to time the market with the idea you might get back in at a better price seems poor advice.

    Too often people bail out of a great business simply because the pretty green number next to the ticker in their portfolio. Shouldn't excellent performance be an indication of broad confidence in the success of the underlying business? Otherwise all of our portfolios would be populated only by companies that have lost money. Doesn't sound like a good strategy to me. Amazon, Netflix, MSFT, Walmart, etc all continued to outperform the market over extended periods in spite of being considered "overvalued" or trading at an "unreasonable" multiple.

    If concerned about downward pressure on P/E causing a retreat of dollar value of a holding, then put in a stop loss or trailing stop loss, rather than just selling purely on price.

    The only other reason I can think of would be if you had a need for cash or have identified an alternative stock that you believe provides a better long term opportunity for price appreciation -- in otherwords rebalancing or diversifying.

    FM

  • Report this Comment On December 23, 2010, at 7:39 PM, jm7700229 wrote:

    Can't agree with FutureMonkey. In 1998, I looked at the valuations of my tech stocks and dumped most of them. Whew! Good thing I did that! In 2005, I took a look at what financials were doing and dumped them (all, unfortunately, except GE). Glad I did that, too.

    NetFlix is a great company, but does that mean you'll hang onto it no matter what it's price? That simply doesn't work. With a huge multiple, investors are not buying what it's worth today but what they hope it will be worth in 4 or 5 years. A lot can happen in that time (ask Blockbuster).

    It's true that the company may live up to expectations, but when the expectations are that far out, it is a very big gamble -- one I'll take if the price is right, but not one I'll pay for up front.

  • Report this Comment On December 23, 2010, at 9:14 PM, FutureMonkey wrote:

    Hey JM

    I agree. There are plenty of examples available from the past cautioning against irrational exhuberence if price vastly exceeds the value of the underlying businesses. But I can give more examples where the underlying business continued to grow beyond expectations and people that sold out after a double, missed out on 1500% gains.

    The difference is the quality of the business. That was my point. If concerned about risk associated with a high P/E growth stock, then you can always place a trailing stop loss that secures you from uncertainty and risk of rapid decline in market value. In both of your examples a trailing stop loss would have protected your portfolio without needing to time the market. Nobody can predict peak exit point. Selling or avoiding purely because of price without regarding to the underlying business is not likely to produce market beating returns overtime.

  • Report this Comment On December 23, 2010, at 9:21 PM, PlayingwithOPM wrote:

    This article is a recommendation to sell, so you're not really paying up for netflix. You're deciding to hold or sell. In my case, I'm up over 700% on Netflix, it has grown to make up a little over 10% of my portfolio. I'm holding and sleeping very well at night. I have tried numerous products. In my opinion, Netflix is far superior to every other option. I am cheap and proud of it. I will not ever pay to rent a single movie (DVD or stream), when I can rent thousands for a small monthly subscription. Netflix has already become my primary source for TV and movies. I'll be cancelling my Comcast service in July when my contract is up. I believe in the superiority of the Netflix model, and more importantly, I believe in Reed Hastings and his ability to stay a step ahead of the competition.

  • Report this Comment On December 23, 2010, at 10:21 PM, Merton123 wrote:

    To sell or not to sell - that is the question. Statistics state that the more stocks a person buys and sells during the year that the average return will start to mirror the index because of the law of averages. That is why Warren Buffet states that his holding period is forever, and that if you get more then one good investment idea in a year that you are deluding yourself. Is Netflix the Next Coca Cola?

  • Report this Comment On December 23, 2010, at 11:00 PM, mjturner1 wrote:

    I'm only interested in the Netflix commentary. I do not have much stock expertise but I must disagree with your opinion that Netflix can only defend and not expand it's empire. It has pioneered a whole new method of delivering DVD and TV entertainment quickly via mail and instantly via streaming. It is leaps and bounds ahead of competition in this department, and many argue that these methods of delivery are far superior to the other (often) more expensive delivery services. Its services are cheap, so everyone can afford it. It's market is limited only by the number of people on the planet -- I defend this by asking: which social class, race, or country (Okay-- North Korea... maybe Greenland) doesn't watch some form of dvd/tv entertainment? Now I know that many poorer nations don't have the disposable income for things like a computer, internet access and a netflix subscription, but plenty of european, asian and south american countries do.

    It is also expanding outside of the U.S. and no one has any good reason to believe they won't soon head to other markets. The other day they had an upper management job opportunity on their website with a focus on international business. Canada just became a reality. I see Mexico and eventually Europe to follow. New countries = new markets = EXPANDING EMPIRE! = increased revenue = very likely increased profit = increased stock price = me keeping NFLX :-)

  • Report this Comment On December 24, 2010, at 12:24 AM, electech98 wrote:

    Something to think about that I've recently come across:

    The other day I turned on my PS3 to find a new service available for movie rentals and downloads, through a service called Vudu.com. There, one is able to either rent OR buy movies in SD, HD (720p), or HDX (1080p) a la cart. They seemed to have a huge selection.

    The big difference here is that Netflix offers DVD's and BluRay's along with their streaming, whereas Vudu doesn't. However, it seemed Vudu might have a bigger streaming catalog...but some are only available for purchase, not for renting. The other big difference is the monthly cost for Netflix vs. the a la cart cost of Vudu. Either service could be a better value over the other depending on how many movies a person watches per month.

    With physical media for movies going the same way of the physical medium for delivering letters, I'm wondering if (as more and more services like Vudu crop up to compete with Netflix) Netflix might be hurting themselves by not absolutely dominating the streaming segment of the market by this time. To me, they are certainly pioneers in the home entertainment sphere...but they are also in danger of being like AOL was with Internet access: AOL dominated the market for a time but failed to truly innovate and dominate where the Internet market would eventually end up by way of broadband. Netflix could do the same thing by failing to truly innovate and dominate by way of streaming and non-physical media storage mediums. To summarize: Netflix is very very good at streaming, but services like Vudu, GoogleTV, etc. are poised to take a lot of the streaming market share away if Netflix isn't careful or forward-thinking enough.

    I may regret this certainly, but I personally am not buying Netflix at this point.

  • Report this Comment On December 24, 2010, at 1:37 AM, DBrown7 wrote:

    I remember in 1997 when Amazon had a $700 million market cap and was called wildly overvalued by many. After all, they were just a book seller, a business with no moat. AMZN has been a hundred bagger since and, of course, still called wildly overvalued by many.

    Great growth businesses will often appear to be overvalued, but in hindsight will, in fact, be quite undervalued. I believe Netflix is one of those businesses.

  • Report this Comment On December 24, 2010, at 1:37 AM, TMFSpiffyPop wrote:

    Anand, fair enough -- re: Netflix. It's a top holding for me, so my money's where my mouth is -- and I've been wrong before! So if Netflix underperforms in 2011, so be it -- I'll very likely own it in 2012, 2013, and beyond -- I've owned Amazon persistently since the late '90s through every kind of market so this would be no different.

    That said, I really believe that Motley Fool articles should be "backed up" by CAPS picks. In other words, if you're going to say "sell" certain stocks, take the time on your CAPS page to thumb them down to lose to the market. Be accountable and "back it up." At present, I don't see any red thumbs on your page on Netflix. I think you should, given the above. I already respect your past performance (you're in the top 7% calling stocks in the whole Fool Community!), and I'll respect you even more when you take an article like the above and make every assertion into an accountable pick. Thank you for your work, and Fool on. --David

  • Report this Comment On December 24, 2010, at 9:50 AM, investchief wrote:

    I believe in particular that Netflix is going to be heading down because there is no way it can sustain this kind of growth for this long. Netflix is a bubble and it will burst. There is not enough bandwidth to support their estimated growth. Unless, they find an alternate route, I am a seller.

    check out my investment blog: investchiefblog.com

  • Report this Comment On December 24, 2010, at 12:44 PM, TMFBomb wrote:

    @TMFSpiffyPop,

    Thanks for the comments. I just thumbed down Netflix in CAPS, putting my CAPS rating where my mouth is!

    It should be noted that TMFSpiffyPop (David Gardner) has been correct on Netflix every step of the way in his Stock Advisor newsletter -- generating over 1,300% returns on just one of his picks.

    For another good counterargument on why selling Netflix could be a mistake, check out Jeremy Phillips' commentary:

    http://www.fool.com/investing/general/2010/10/07/selling-thi...

    I look forward to tracking Netflix from here and seeing which of our motley opinions is correct!

    Fool on,

    Anand

  • Report this Comment On December 24, 2010, at 3:18 PM, jm7700229 wrote:

    Hmmmm. 700% return. 1,300% return. "Be fearful when others are greedy and greedy when others are fearful."

    I just don't have confidence in NetFlix's ability to ALWAYS have a jump on the market, but they are priced as if they will. There is little barrier to entry into an essentially commodity market, especially internationally.

    I have a habit, when I believe a company that I really like has become overpriced, of taking my gains but keeping a piece of my original investment in place. This practice has done all right for me while saving me from a couple spectacular losses. It's what I'm doing with NetFlix.

  • Report this Comment On December 24, 2010, at 3:52 PM, TMFBomb wrote:

    @jm7700229, DBrown7, FutureMonkey, PlayingWithOPM, Merton123, mjturner1, electech98, investchief, and TMFSpiffyPop,

    Great debate on Netflix so far! I'm enjoying the well-reasoned, differing views on this stock. To be clear, I'm bearish on Netflix for the long-term (past 2011), but if I'm wrong and Netflix ends up being an enduring consumer brand, I could be wildly wrong.

    Regardless of which camp is proven correct, I think this will be a great case study to look back on as we all improve our investing chops.

    -Anand

  • Report this Comment On December 25, 2010, at 5:40 AM, vanyah wrote:

    The short interest on NFLX is huge right now, and the short sellers are running out of time. You can verify this by taking a look at the amount of open interest on naked Jun 11 NFLX Put contracts.

    These guys are going to have to cover their shorts soon or lose vast sums of money. Some Shorts have even launched Public Relations campaigns to make their dreams come true.

    Everyone who is invested in NFLX should definitely not sell at this time.

  • Report this Comment On December 25, 2010, at 12:50 PM, langco1 wrote:

    top sells for early 2011 aapl,amzn,gs,cmg,ffiv,goog,crm and wynn...a few that have already corrected and are ready to buy bidu,nflx,v and ma these will do well for at least the first part of the new year.......

  • Report this Comment On December 25, 2010, at 4:23 PM, Glycomix wrote:

    Netflix has a PE of 69.95 and a forward PE of 47.57. It appears to be overvalued based on general rule-of thumb. Apple and Google have PEs in the 20s. The problem is that we think of Netflix's business as video rental. However, I think that Netflix is more that this.

    NETFLIX'S COMPETITIVE ADVANTAGE: FAMILY CONNECTION

    The problem is that we might not understand the underlying business of Netflix. I think that its business is providing its viewers with an an easy escape from the stresses of life which seem to be multiplying.

    Netflix has a algorithm that accurately predicts what kind of movies you and each member of your family members would like. By renting an on-stream movie on the fly, you can produce some special "family-time" that each person likes. That's incredibly valuable and very hard to do.

    Because our interests diverge, individuals in families spend very little time together. By providing an easy way to find common ground in something of interest to everyone. Watching a movie that everyone enjoys is not as connecting as activities that people did in the past. However, the provides an easy, though imperfect way of spending time together.

    MUSING ABOUT CONNECTING FAMILY

    There is no easier way to connect than Netflix, though there are better ways: Families can have a specific day and time to play cards (eg. bridge) or board-games together; while playing they can laugh and tell their stories about their daily trials and frustrations. It is difficult to fight the negative attitudes of children. But if you stand tough and work to make it a positive experience for everyone, it'll work out. If there're too many interruptions you can spend time together.

    Reading books and discussing them together has worked. My father read the books that his father was reading and discuss them with his father and his father's friends. He became quick witted and very personable. He and his father were very close

    My mother's family shared time working together on her father's farm and laughing about common experiences. They stayed close and connected though-out her life.

    Taking a two- or three-week family road-trip may provide experiences to bind the family together. Planning the trip allows everyone to give input and provides anticipation. Even trials can become an area of connection: dealing with rain coming though your tent-trailer's roof while you're trying to sleep. Playing in the snow with your kids in the summer at Yellowstone. You can laugh about these experiences for years.

    We need connection in our families. Excepting tradesmen and farmers, we no longer live in a world where we can work with our mates and children. Sharing our thoughts, feelings and experiences, and listening with patience and respect to those of others can build connections. With young children, playing their games and allowing them to be the director can provide that connection.

    PROVEN PATHS TO CONNECT WITH YOUR CHILDREN:

    <9, Play with them; >11 Reflect their feelings.

    For those wishing to know more about how to connect with their children as well as how to parent, consult the work of two practical advisors:

    (1) Listen to their emotions. Adele Faber & Elaine Mazlish. Book: How to Talk So Kids Will Listen & Listen So Kids Will Talk. In three of their pages they teach the essence of listening.

    http://www.amazon.com/How-Talk-Kids-Will-Listen/dp/038081196...

    (2) Play with them where they're the boss. Carolyn Webster-Stratton, a genius in connecting and changing the attitude of children from the ages of two to nine. Her program is amazingly successful in building connections between parents and children and in decreasing aggressiveness from the 99th percentile to below the 50th percentile in up to 95% of aggressive children. It's been replicated multiple cultures and has been replicated in Montreal, in Oxford England, in the Netherlands and in Sweden.

    http://www.incredibleyears.com/

  • Report this Comment On December 27, 2010, at 2:17 PM, somacho wrote:

    It can be replicated in any culture or family where everyone wants to bring it about. The danger of overcomplicating is the only major threat

  • Report this Comment On December 27, 2010, at 2:18 PM, somacho wrote:

    mark rednicks comment

  • Report this Comment On December 31, 2010, at 11:30 AM, ACM666 wrote:

    Buy when it's undervalued, sell when it's fairly valued. If "Purely Price" means you believe it's fair- to over-valued, this is a good reason to sell and I would not consider it market timing.

  • Report this Comment On December 31, 2010, at 12:07 PM, TMFOpie wrote:

    A few days after Christmas this year my wife, mother, niece and I were sitting around the fire talking about movies to see (King's Speech tops my list). When my mom says "ok, now which ones should I add to my Netflix cue?" I asked (in shock) "mom, you're a Netflix member?" She replied "oh yes, I use it a few times per month because your father will never go to the movies with me."

    This from a lovely lady who only wants a laptop to email, go on the web and organize her Christmas cards. And now she has a Netflix cue and his hooked.

    One more reason why I'm always cautious when someone suggests that Netflix's growth days are behind it (or even priced into the stock). Any company that can lock in my mom is doing something right (Amazon, Google too).

  • Report this Comment On December 31, 2010, at 12:07 PM, millionairhead wrote:

    I keep a virtual portfolio on Motley Fool recommendations:

    How does an overall -6.25% return sound for the market we've had this year?

    If you listen to these Motley Fools, what does that make you?

    WYNN: Liquidity issues? They paid off a HUGE amount of debt in Q3 which muted the earnings report. Their Macau business is growing by leaps and bounds. December profit takers have taken their shots...lot of it in last 2 weeks, light trading, dumb as hell. Look what it did to price.

    Go ahead, sell your shares...I'll be there to buy 'em.

    I bet this comment don't get posted.

  • Report this Comment On December 31, 2010, at 12:23 PM, millionairhead wrote:

    Oh, yeah, in ref to year end selling above:

    RNOW: On 28Dec, some Motley Fool decided to sell 900,000 shares in a market volume environment averaging way less than 100,000.

    Price drop: Almost $3, about 13%.

    RNOW is on my 'long term' list. I jumped on it like stink on you know what.

    3.59% return on that money in 3 days.

    God, I love people who trade with the herd.

    Thank you and Happy New Year. Keep up the dumb trading,

  • Report this Comment On December 31, 2010, at 12:48 PM, alabama32 wrote:

    A couple of weeks ago the Fool recommended/touted Whole Foods as the next Microsoft, the next mega stock. Now you are suggesting that I sell. I'm confused. Bill in Houston

  • Report this Comment On December 31, 2010, at 12:51 PM, beauteddy wrote:

    What happens if the American dollar is dropped as the world's reserve currency? A recent meeting of EEU, China, Japan, etc. was held w/o inviting the USA to discuss this drop. What happens?

  • Report this Comment On December 31, 2010, at 1:50 PM, reyn0097 wrote:

    anand, I like the article and value your logic. It definitely makes me consider. I own Netflix and bought it based on David's recommendation.

    So the only question I have, is David selling his shares?

  • Report this Comment On December 31, 2010, at 1:51 PM, TMFBreakerRob wrote:

    @alabama32: Articles such as this are written by an individual and are not "Fool recommendations". Given the "Motley" portion of the name, there are many different opinions, some contradicting another. In reading these articles, it is up to the individual to decide what position makes sense to them.

    @millionairhead: Great name...LOL. See my comment to alabama32.

    Folks that are interested in Fool recommendations would need to subscribe to a Fool newsletter where Fool advisors make actual recommendations. Even there, we see different opinions between newsletters...and yet generally see market beating performance. ;)

  • Report this Comment On December 31, 2010, at 3:17 PM, gdf55 wrote:

    @alabama32: that "recommendation" (WFMI being the next Microsoft) has been around since WFMI was PREVIOUSLY at $50. I would take it with a grain of salt.

  • Report this Comment On December 31, 2010, at 3:52 PM, akbarcaskey678 wrote:

    Personally, I would never sell again based on price. I bought IMAX at $12 and sold at 25 expecting a pullback now its at $32 and might get taken over.

    So I would sell if the fundamentals change, not just because of price, or at least not all of my position. NFLX gets all of its business domestically in the US and since its took off last year when it began streaming videos on the web, could you imagine the share price if NFLX expands into Europe or China? It would be much higher than $185.

  • Report this Comment On December 31, 2010, at 3:57 PM, efmagowan wrote:

    Some time ago I set up a paper-only portfolio and loaded it with stocks picked as randomly as I could. (Random number generator to determine how many letters in the symbol, and again as to what those letters would be. I took what it gave me regardless of market cap and my personal feelings). It has spectacularly outperformed my studiously researched real-money portfolios (ouch!). One of the random stocks is Vonage Holdings, paper traded before its 5-fold plus runup. At the time, I wouldn't even consider putting real money into Vonage. Other notable listings in my 'random walk' include Ingersoll-Rand (IR +115%), Ryder Systems (R +84%) and US Steel (X +105%). The only loser is an triple bear ETF, which I was tempted to exclude in the beginning but held to my rule of take what I get. I may do a real money random walk soon.

  • Report this Comment On December 31, 2010, at 6:21 PM, Jayrozz wrote:

    To the author of this article,

    I really enjoy reading a lot of your guys stuff and most of the time find it helpful and insightful, however you guys that work there all need to be on the page because oh about a month ago you guys had a "hook line and sinker" to get members and the big deal was " a company that will pour profits into your portfolio for years" that company was wholefoods. So i see a little difference between employees here.

    -Fool on

  • Report this Comment On December 31, 2010, at 7:29 PM, TMFBomb wrote:

    All,

    I want to address three questions/comments:

    1) Is this market timing?

    No. Selling shares because you think they're overvalued isn't the same as changing the percentage of stocks in your portfolio due to market prices. In this article, I am talking specifically about five stocks and whether they're overvalued.

    2) Why do you see conflicting opinions in Motley Fool articles, publications, and services?

    It's best said in the disclosure section of all our articles:

    We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

    This is why I (TMFBomb -- Anand Chokkavelu) can disagree with TMFSpiffyPop (David Gardner) and TMFOpie (Andy Cross) on Netflix. And why I'm debating whether to hold onto all my Whole Foods shares while others can be very bullish.

    This is one of the many reasons I love the Motley Fool...we can disagree and debate but still respect, value, and learn from each others' contrary viewpoint.

    3) Specifically answering Reyn0097's question:

    anand, I like the article and value your logic. It definitely makes me consider. I own Netflix and bought it based on David's recommendation.

    So the only question I have, is David selling his shares?

    Reyn, check out TMFSpiffyPop's (David G) response above. He's still a Netflix bull and he's done very, very well on his Netflix recommendations throughout the years.

    Fool on,

    Anand

  • Report this Comment On January 01, 2011, at 2:56 AM, bradjmj2 wrote:

    Regarding Netflix, I would not sell the bulk of my shares. I love this company and have been a member for many years. Recently we upgraded our Wii wireless feature to use Netlix and dig it. Anyways, I am long Netflix...

  • Report this Comment On January 01, 2011, at 11:57 AM, Artataks wrote:

    Using a trailing stop loss Is the Best way to protect your gains and get out of a losing position after a pre-calculated loss. To just sell a position just because it has profit or looks as though it has reach a top reminds me of something Warren Buffet was said, “my worst trades were the ones I’ve sold”. If you are selling to free-up cash consider buying a call ATM out a month or two, to the next earnings report just incase of good news. That way you can still repurchase or profit from the call price.

  • Report this Comment On January 01, 2011, at 1:12 PM, LALIBERTEW wrote:

    How many shares did the Gardners sell after their netflix buy recommendation?

  • Report this Comment On January 01, 2011, at 5:54 PM, fbozh wrote:

    it would be nice for fool writers to agree and speak in unison. Reading david makes sens when he recommends netflix, reading Anand C. creates confusion

  • Report this Comment On January 02, 2011, at 11:19 PM, lovesstocks2 wrote:

    I disagree with David comments on two counts. First off, Netflex is trading at over 60 times earnings, and there are people out there, myself included that do not want to take the risk of a 50% or more decline in the stock, followed by a strategic mistake. The stock may not fall, but where it is now, it clearly needs time to consolidate, and why should I wait for that.

    There are several hurdles to overcome, first off, the movie people probably want more money and second, there may be a rate increase coming. The current stock price clearly anticipates no problems, and that is not usually the way things happen, great growth stocks or not.

    Amazon has gyrated wildly in price, and many investors have made good money selling when the price is too high and then getting back in when there was a temporary dip for whatever reason.

    For some of us safety matters, and while i cannot say that Netflex will go down for sure, I do not believe that for the next two years, given the information available, that it will go up enough to justify the risk in the current price, unless someone sees a giant (more than 100%) jump in earnings coming.

    Anytime a stock sells for more than 1 time its growth rate you can usually pick it up later at a better price. This is a great growth company, but not at the current price.

    Everything is working fine now, but the current price demands perfection in the future and the odds are against that.

  • Report this Comment On January 03, 2011, at 2:52 PM, UtahStockMom wrote:

    I already sold Netflix because I just felt it was over-valued (I think that's what "purely price" means). Then I bought it back! I'll have to pay short term capital gains on it, but the NEXT time I sell, half the taxes will already be paid. I DO put a trailing stop on the ones (like Netflix) which I think have gone up so much they just CAN'T keep climbing. And none of them have sold yet, so the profits just keep mounting! I love this sight for all the DISagreements. It's how it is in real life--and there are smart people on both sides of every fence. Thanks for your insight and intelligent opinions.

  • Report this Comment On January 09, 2011, at 12:55 PM, foool45 wrote:

    Hello everyone,

    A little sentimentality.......I'm definitely a beginner when it comes to investing in stocks--an infant!! I carefully dipped my toe into stock investing a couple of years ago when I transferred my old job's retirement plan into an IRA. I did it all by myself :) by following the advice/instruction from Fool.com which I stumbled upon purely by accident while surfing the internet, and by doing so, I saved myself a ton of broker fees and portions of my retirement fund. I continue to stumble along as best I can trying to follow all the investing jargon, trying to squeeze in more learning time about investing as I struggle to also allot time to my husband, my family, my job, my education and my varied hobbies. I seem to be doing pretty well so far having received the benefits of a sizable Marvel purchase and a sizable Netflix purchase. My portfolio has finally risen now that I'm in charge of it, instead of my place of employment! I'm still a little nervous about all this investing "stuff", but I've tried to diversify and try to keep up with the all the reading on this site, which finally brings me to the point of this post. While I count on the Stock Advisor to help me choose and make decisions about stocks, I enter into it with the knowledge that they are only RECOMMENDING, and that it is up to ME to make MY OWN decisions on what I want to buy or sell, and I sincerely APPRECIATE the diverse input from ALL members of the site. I don't want to blindly follow just one recommendation from one individual, even on Fools.com. I want to learn. I want to learn about how to make my own decisions based on several different points of view, using the Fool site only as a guiding hand so to speak.

    So PLEASE Fool.com, do not all conform to each other's viewpoint just because you all work at the same place. Your varied styles, insights and viewpoints are what are helping me to learn how to do this myself! I don't want to just follow along like a puppy, I want to be the lead sleddog in my investing, with Fool.com helping me along as the rest of my pack!

    Knowledge is power, and true knowledge comes from many different sources, not just one.

    Thank you ALL Fools, for all your help!!!

  • Report this Comment On February 17, 2011, at 6:47 PM, skolketch wrote:

    Help me understand why WFMI is on your sell list now, when it was touted only recently as a buy as "An American Brand Poised for Global Mainstream"?

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