Hibbett Sports

Three months ago, Hibbett Sports' valuation was downright silly, as I opined here. I still think it's undervalued, but it's within a range in which I can't put a ton of confidence in that assessment. As such, I've taken my money off the table.

I have lost money with retailers before. In fact, if you look through my Value Fail list, you will notice right away the preponderance of retailers, which does not speak well to my ability to learn, either from the mistakes of others (this riskiness in retail is not a secret!) or from my own!

And yet, overall I have made money in retail, because there are some winners too. So, to keep the downside risk low, I keep my positions small, like I do with the levered financials I like as well.

To that end, Hibbett was not a large position, but it is one that did double in just a few months. Unfortunately, this will probably teach me the wrong lesson: to keep dabbling in retail, which may not end up being good for my portfolio!

I think the right lesson here is that when the market gets wholly pessimistic (as it did in this industry a few months ago), that's the right time to buy. Investors were panicking and running for the exits as these companies were falling in the double digits on a daily basis; if you find a company in that kind of environment that has the finances to hang on for several years, chances are you'll do very well buying in at a time like that.

Disclosure: No position