Friday, December 16, 2011

Honeywell - Great company, tough ride

Honeywell was one of my very first purchases.  It's a company I got a lot of interest in for a number of reasons.  To start with, one of my main investment theories right now is that energy management is going to be a huge multi-year theme.  Between trying to save money because energy prices have been climbing coupled with our human interest to be "greener," Honeywell seemed like an awesome fit.  With the financial fallout of 2008, Honeywell was crushed.  The company made a number of moves to change direction and adjust so they could handle downturns and do even better when things go well.  By the time I was interested, they were proving to beat expectations despite a still difficult market - their changes were proving fruitful.  The stock still held a yield around 3% and I couldn't be more happy to acquire shares.  This seemed like a no brainer, and throughout 2010 I couldn't be proven more right, as the stock climbed up to nearly a 50% gain.  However, like my story with Pepsi, I didn't understand how Macro conditions would affect my stock.  I thought HON was doing so well, there was no reason to worry.  Truth be told, my feelings about the company and its performance couldn't be more right.  Even as the stock started getting hit hard, they kept reporting numbers that beat expectations and maintained or raised guidance.  It didn't seem to matter.  The threat that business would slow down was too much and the stock just kept falling - all the way to the point where it was around the area I bought it.  Talk about a painful ride.  Shoulda, woulda, coulda aren't words in the vocabulary of investing, but I couldn't help but use them too.  So many things I should've realized and taken advantage of.  But I can't really complain - I was never down and eventually it started to climb again.  This stock is still a long-term theme for me.  I see holding this for years to come, but the short term is tough to handle with all this Europe junk.  So HON jumped fast again.  I thought for sure that this time I've recognized that it climbed too far too fast and the Macro is looking much more risk-on than risk-off right now.  Europe fails to do anything really positive, so this time I sell a quarter position to lock gains and hopefully buy again lower.  As usual, things haven't worked as planned.  The price has stuck around or above my selling point despite some tough down days and it seems I can't get a break.  That being said, I can't complain to locking in and protecting a nice gain - garnering cash for any future slides.  At the same time, I really want to get my long-term position filled again without it costing me.  This is tough!  But hopefully I'll find some reward in it yet.