Thursday, September 28, 2017

Alliance Aviates Well

Just seven months ago, I opined on Alliance Aviation as a potential value play. Today the price sits more than 50% higher. I can't explain the dramatic price rise. The price was just plain silly back then, and serves as a reminder of just how weak the Efficient Market Hypothesis really is.

I actually didn't *feel* like selling this stock. The business momentum is positive, as the company's mining customers are experiencing better times. Management is great, having weathered the storm well by avoiding excessive leverage and picking up bargains to benefit from a rebound. And price momentum, which is a real thing, is also solid, suggesting there are more profits to be had in this one.

But I try not to sidetracked by feelings. Quantitatively, this one no longer has the margin of safety that fits with my investment strategy, and so it had to go to make room for others that do.

Some investments take years to play out, but in others you get lucky and they play out right away. I'm not looking this one in the mouth; I'm outta here.

Disclosure: No position

1 comment:

juan said...

Well done, Saj!

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