Weight Watchers (WTW): Mistakes Made Over 4 Years of (Emotional) Volatility

by Geoff Gannon


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"I lost a lot of money in Weight Watchers. Let’s look at why that was.

As I write this article, Weight Watchers (WTW) stock is at $44.30 a share.

I bought my shares at $37.68 a share in 2013 and sold them (in March of 2017) at $19.40. So, I realized a loss of 49%...

...What’s notable to me looking back at what I wrote then is how little any of the essential analysis changed. Emotions changed. Owning the stock for over 3 years, you might get worn down by the constant barrage of bad news. But, with few exceptions, we laid out what the grim future would be for Weight Watchers over the next couple years and that’s not that different from the grim future that actually materialized....

...In the report, I really laid out a five year thesis – as I pretty much always do – and yet I sold the stock after not much more than 3 years.

Why didn’t I wait another 2 years?

You get tired of sitting through all the volatility in both the business and the stock.

For me, there is also an added difficulty. I don’t just pick stocks for myself. I write about the stocks I pick.

And I get tired of answering emails about the stock. By the time I sold Weight Watchers it was not one of my biggest positions at all, and yet it accounted for probably more email questions from readers than all of my other stock picks combined...It is very unpleasant to write about a volatile stock, a controversial stock, a heavily shorted stock, etc...

...Would I have held my Weight Watchers stock till now if I hadn’t made my investment in the company public?

I don’t know.

But, I do know I’m more likely to sell a controversial stock because I have to write about what I own and talk to people about what I own.

The truth is that there isn’t really that much to say about Weight Watchers other than what I said in that 2013 report...there’s been big changes in my emotions and in the stock price and there’s been some changes with the business – most notably, Oprah’s investment – but if I was going to make a decision to buy, sell, or hold Weight Watchers today I would still base 90% of my decision on what I wrote in 2013."

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