We had a bit of a disaster last month when Michael Kors (KORS) dropped from $61 to $46 after it reported profits that were less than expected, and also lowered 2015 guidance. I originally purchased KORS at $45, and had sold most of the shares earlier, so it wasn’t a huge deal financially, but it’s still not good to be in stocks that are capable of making these big drops.
I focus on three things in my portfolios: Certainty, Consistency, and Growth Opportunity. Certainty means I want to be convinced these companies will perform as expected. A track record where profits grow each year is Consistency. Growth opportunity is achieved through rapid profit growth, which often correlates to the rate of stock growth.
I shifted the top holdings in my portfolios this qtr to overweight stocks that have all three attributes. The changes I made are described here.
