Seller's Remorse

Buyer's remorse, as defined by Wikipedia, is an emotional condition whereby a person feels remorse or regret after the purchase of an item. Something I quite often get after forking out for that new gadget and realising soon after that I didn't really need it.

Seller's remorse on the other hand, usually occurs when someone sells their home. The place where they have lived for a large part of their life is no longer theirs. Have they done the right thing? Who knows!

Today I had seller's remorse of another kind. In August last year I took a punt on a Uranium explorer. I didn't put a lot of money in, enough that if it went well I would be happy, but enough that if it things went belly up, I wouldn't be slitting my wrists. Well, in about 6 months, I have more than quadrupled my original investment. I didn't in my wildest dreams expect this.

I feel the Australian market as a whole has become quite overheated in recent times. The S&P ASX 200 has just cracked through 6000 points, with the All Ordinaries closely behind it. It was only late September that the market was under 5000 points. This sort of growth can't be sustainable. During this time these Uranium explorers, who are still earning no money, and are unlikely to start mining for at least another 5 years have been running hot. All purely based on speculation that Uranium is actually the Commodity of the future. Is Uranium the commodity of the future? Who knows... I'm sure the people of Chernoble would think not.

So, today, as the All S&P 200 broke through 6000 points and people starting asking the question of will we see 7000 points by year end, I did what I wasn't expecting to do so soon, I hit the sell button on my Uranium shares. I wanted to hold for 12 months to get my 50% capital gains deduction, but it looks like I'll be providing Peter Costello with a few more bucks for the next Federal Budget. As some say, "It ain't so bad having to pay tax".

Immediately after I sold it hit me. This share that I had enjoyed a wild ride on for 6 months was no longer in my possession. Those days of watching the difference in open and closing prices of over 10% are gone. What had I done??? This stock might still have a long way to run! Not only that, but I've got to hand over part of my winnings to the Government! There's no reversing a decision like this.

However, now I sit back, with the cold hard cash in my hands (well, in my bank account in 3 days anyway) and feel relieved that common sense had overcome greed. Like many of those burnt in the dot-com boom & bust that soon followed, at least I know I didn't hold too long.

Time will tell if this was the right decision. I know for sure that I will be doing something more sensible with this money, like investing in an established stock or managed fund. I will report on the progress and if I actually have made the right decision!