Why I Won't Sell(out)

I won't sell out because I keep it real, you know what I'm saying. I mean that's my job here at Urbanomics, to keep it real and uncut. And the problem is this tag gets thrown on a lot of people all the time. Take your favorite hip hop artist and you get a real quick example of what I mean. Let's look at 50 Cent, the hardest rapper, forget rapper...man alive. He took nine bullets and lived to rap about it through his music. Who can forget the debut album, "Get Rich or Die Tryin'", which exploded on the scene in 2003 laced with gangsta rhymes, tight beats and catchy hooks. I won't test his gangsta, with tracks titled:

~Many Men (the hook goes "wish death upon me")
~ What Up Gangsta
~ Don't Push Me


And everyone will remember "In Da Club" and "Wanksta" as memorable hits that put 50 on the radar. My how quickly times have changed. Now I won't call my man 50 Cent a sellout but many have questioned the general since the release of that first album. Maybe it was the tracks that he later dropped such as "Candy Shop" or "Amusement Park" or is it just human nature to take shots at the guy on top by calling them a sellout and wishing for his demise from the thrown.


So what does all this have to do with stocks? Well many people sell or sell(out) on stocks because their stocks made it big...kinda like 50 Cent did. As documented in my last post, I highlighted Clayton Williams Energy Inc. It is one of the high flyers of the year but it wasn't always that way. This company first came up on my radar way back in 2006. Yep, it was January 2006 when I made my second wave of investments in the oil industry. A year two before that you may remember major purchases like PetroChina that we made before the great Warren Buffet
revealed his acquisition of a large number of their shares also. A small oil and gas exploration company called Clayton Williams made a splash on my stock screener. With small victories in my portfolio, I was looking for more small and mid cap stocks to purchase with the opportunity for huge upside. Run a chart of this stock since the beginning of 2006 and you will quickly learn that this stock was trading down since the beginning of 2008. But as Warren Buffet has always mentioned if you believe that you have obtained a stock at a discounted price then hold onto that investment until its true intrinsic value has been reached. Well it caused me great pains to watch my investment drop to levels of roughly 30% declines at some points, but you have to think long term! The economics behind oil and gas were pointing in the right direction and all it took was good management to pull this company up off the ground. Today CWEI has taken out new 52 week highs once again and this wouldn't have been hard to see. Going into its earning CWEI sold some of its oil fields which is guaranteed to present a nice upside to short term earnings going into its quarterly earnings meeting. After this meeting the market loved what it heard and pushed CWEI up 7% more on the day. On the year CWEI has run up over 100% and I am still not looking to sell anytime soon. I ain't no sell(out) just because CWEI is hot. If the fundamentals look good I am sticking with my stock and keeping it real. Take 50 Cent for example even though people have taken shots at him, his second album sold over 1Million copies in JUST 4 days.

Knowing when to sell is a tough thing so we will look at some times when we have gotten it right and also some thoughts from the big dogs that do this for a living.

Holla