The preview was just a way to notify investors this was coming. I wanted to get the announcement out to investors right away, even though we previewed this trade explicitly last week. Not to worry, the position we reduced rallied in the final minutes. The closing price is better for investors than my execution price.
In our recent articles, I previewed some potential trades. I was considering selling one of our long-standing positions and reallocating the capital.
Multiple factors drove that decision:
Weaker growth rates. Including the impact from higher interest rates.
Strong disagreement with management about the best uses for capital and when to utilize debt.
Displeasure with management’s prior decisions to restrict the rights of shareholders to remove a board that was failing in their duties.
Recent relative performance creating an opportunity to swap the shares.
I decided to sell shares with losses in our taxable accounts. That way, I can benefit from the tax shield created by the losses.
The tax shield doesn’t improve our calculated returns on the position, but it will save me a bit on taxes.
It’s not a great silver lining, but it’s still a small benefit.
The more important part was that there were other compelling opportunities that I could put the capital into. Companies where management is running the REIT in a way that more closely represents how I want management to be investing.