I know you already published your WTW post-mortem post but I have been an intermittent reader and after WTW's recent run, decided to check in on your blog.
I first heard about WTW as an investment thesis from your blog. I got the free sample of Avid Hog recommending WTW. I bought my first shares on 9/9/13 and in less than six months, my WTW position occupied 30% of my retirement portfolio. I proceeded to keep buying sporadically and even had the courage to pick up 300 more shares when it hit $6.18 on 5/26/15 - my only purchase of WTW that year. My holdings had an average purchase price of $24.52.
I believe in what WTW is about. Obesity is a systems problem. It is complex…I'm a pastor and I work with substance abuse addicts. Besides behavioral modification, a huge part of recovery is community support, peer reinforcement, and mindset change - all elements of what WTW groups do. Obesity has elements of addiction and disease. I view WTW as a kind of 12-step recovery for obesity. Because of the nature of obesity and addiction, WTW's program will not be successful for even a majority of people but it will be successful for many. Oprah's first ad was also incredible…
I sold 14% of my shares in November and December of 2015 after the Oprah announcement. I wanted to free up some capital for other purposes and re-coup some losses. I sold another 38% in gradual increments this year. I made a modest 5% total gain on all the sales (FIFO). I still have just under 50% of what I originally purchased, at a paper gain of 146%.
My total return (paper + actual) from 12/6/13 to 9/22/17 is 52.67%, besting the S&P500's 38.53% rise for the same period.
I often felt terrible about pouring more money into WTW as I watched it decline in 2014 and 2015. It was rough. I kicked myself for not considering the impact of debt. I told my wife about my decision and she shook her head. Those were difficult times but I quickly learned not to base my mood off WTW swings. Many days, I would look at the stock price, shake my head, and just laugh. There was no rhyme or reason for the price changes.
I definitely hated your advice but was reassured that you had skin in the game. I also thought the market was undervaluing everything about the company. It was kind of ridiculous. I stopped reading your blog this past year and I'm glad I didn't read about you selling. It might have influenced me to do the same.
1) I won't make any company 30% of my portfolio again. WTW is currently 20% and I'm gradually taking that down.
2) I'll take a company's debt more seriously before jumping in.
3) Belief in the underlying premise of the company is what drove me not to sell completely. I had hope this company would turn around. (I also hate taking losses at any point and am holding on to worthless shares of…a company that went bankrupt two years ago)
4) I was/am extremely lucky but was also fortunate that I did not panic. I just kept believing that it might come back.
I'm actually not sure what other lessons there are except that this experience was humbling although perhaps not as humbling as it should have been, due to the happy (thus far) ending. I would love to hear your thoughts. Your post about selling as value subtraction resonates with me and is true of my investing history.”