Tax Loss Selling (DWRI)
Well, I hope I learned the lessons from my cautionary tale regarding Design Within Reach (DWRI -- free real time quote from ADVFN), because it turns out it makes sense for me to clear the DWRI from my portfolio before the end of the year and take the tax loss.
I won't retype my whole experience with this modern furniture retailer -- suffice to say that I like the product, bought a small position early this year because I was enthusiastic about their expansion plans and the quality of the products, and watched as it became one of the bigger investing mistakes in my portfolio.
The reasons for DWRI's fall were legion -- management mistakes, competition that was much stronger than I had anticipated, expensive studio rollouts causing cannibalization of their own higher margin catalog business, and rising costs due to the Euro and fuel/shipping increases.
I don't usually like to sell, but am certainly willing to when a company turns out to be something much different than I initially thought. Even after losing faith in this company, I figured (appropriately, so far) that it had fallen as far as it would likely fall, and I had intended to hold the stock in my portfolio to remind myself of the risks of leaping into a stock too quickly. The tax loss I can harvest right now is too appealing, so I'll just have to trust myself to remember.
So the band-aid has been ripped off and the pain is over -- I sold DWRI today, December 21, at $5.95 for a loss of roughly 68%. Phew.
I won't retype my whole experience with this modern furniture retailer -- suffice to say that I like the product, bought a small position early this year because I was enthusiastic about their expansion plans and the quality of the products, and watched as it became one of the bigger investing mistakes in my portfolio.
The reasons for DWRI's fall were legion -- management mistakes, competition that was much stronger than I had anticipated, expensive studio rollouts causing cannibalization of their own higher margin catalog business, and rising costs due to the Euro and fuel/shipping increases.
I don't usually like to sell, but am certainly willing to when a company turns out to be something much different than I initially thought. Even after losing faith in this company, I figured (appropriately, so far) that it had fallen as far as it would likely fall, and I had intended to hold the stock in my portfolio to remind myself of the risks of leaping into a stock too quickly. The tax loss I can harvest right now is too appealing, so I'll just have to trust myself to remember.
So the band-aid has been ripped off and the pain is over -- I sold DWRI today, December 21, at $5.95 for a loss of roughly 68%. Phew.
This article posted by One Guy @ 12/21/2005 10:27:00 AM 0 comments
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