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Sold Gravity (GRVY)

March 26, 2012

Today, as the launch of Ragnarok 2 in Korea was announced, I sold the second half of my position in Gravity (GRVY).  My original investment thesis was based on purchasing the ADRs below cash value. They had appreciated significantly since the beginning of this year and, with today’s announcement and subsequent upward spike of the ADRs, it was time for me to review the position. Clearly the original margin of safety had been reduced or eliminated, and it will still require significant time for the newly launched game to translate into an improved bottom line. Despite the fact that most of my remaining shares were purchased less than 6 months ago (and therefore the sale will result in a short term gain) I felt it was time to exit if I could get my price. I put in a limit order at $3.47 this morning and, unexpectedly, it was filled. I believe the ADRs still have upside and could double from here but I have reaped a better than average return for my short holding period.

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From → Positions Closed

2 Comments
  1. Nice work on GRVY. What are your plans with the proceeds? More AIG? Any other fatpichs?

    • For the moment I’m holding on to the funds from the Gravity sale. I’ve been following the shares of a company that I think could be my next significant position but I’m waiting for the right price. The thing to remember when you have a quick success like Gravity, money’s burning a hole in your pocket and the market is marching upward is to have patience. This is probably not the best time to commit funds; The market is hitting highs it hasn’t seen for 4 years. Time to sit tight, reflect and wait for the next fat pitch.

      AIG is already a large % of my portfolio. I wouldn’t add more unless I could pick it up below my current average cost. Not that it isn’t one of the greatest bargains out there now. It’s just that it’s not in my sweet spot; I would rather be invested in a small or microcap company with the possibility of a 3x upside.

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