Conference nyoss1::market_investing

    Figure out how many years you want to take to liquidate, call it N.
    
    In each year of the N, sell enough stock to net the appropriate
    fraction of the current value of the portfolio by this method:
    
    1	Pick a stock at random (draw from a hat?).
    2	Sell it (or a fraction up to 1/Nth).
    
    	Iterate 1 and 2 if required.
    
    This gets you out, and requires no analysis.  The hat-drawing could
    even be a big event at a fancy dinner, to bring in more money!
    
    E.g., for N=4: sell 1/4 the first year, 1/3rd the second, 1/2 the third
    and all the rest on the fourth year.
    
    		-John Bishop

    
    You have a large portfolio of blue chips.  The first thing I'd do is to
    sort out exactly what this portfolio consists of; specifically, I'd
    separate blue chips into 2 piles: Moderate-but-Steady-Growers 
    ("Stalwarts") and Cyclicals.  Any blue chip that has less than a 10%
    earnings growth/year (long term) I'd probably prune first. 
    
    For the steady growers, calculate (LongTermEarningsGrowth% + Div%) /
    Projected_P/E_Ratio; that is, take the earnings growth plus the dividend
    divided by the P/E ratio, the latter preferrably based on a good
    estimate of future earnings (you could use a good advisor here).
    
    Sell those with a value < 1.0 sooner rather than later.  Hold anything
    that is > 1.5.  You might even invest more if >2.0, but I'll bet you
    won't find any of these at the moment.  This assumes that the basic 
    story behind the company is still sound (e.g. no pending legislation
    with unbounded liability, etc.) (Method courtesy of Peter Lynch)
    
    For the cyclicals "timing is everything", so you'd better get yourself
    an advisor with a good track record on trading the specific industries
    that you're holding.  You need some kind of knowledge 'edge' to trade 
    cyclicals profitably.  Lacking that (and with a portfolio that size,
    why should you lack a good advisor?), I'd liquidate cyclicals that I
    didn't understand very well sooner rather than later.
    
    Let us know what you decide to do!
    
       /Jim
    

 

   How about an averaging dis-investment method?

   I'd divide up the number of shares into lots and 
   place sell orders for those at various prices from
   current prices to say curremt prices + 10%. This way you'll get to
   benefit from upward movements and still be protected from unrealistic
   expectations. You can even fix this percentage by looking at the trading
   range for individual stocks over the say past six months. What percentage
   was the highest price in relation to the lowest? This way you can 
   adjust the percentages depending upon what the beta is for each stock.  

   On the downside you may want to do the same for "stop loss" orders.
   However the percentage I would use there would be 5%. The DOW has been
   fluctuating within a maximum range of 5% of an approx 3000. So I would spread
   the price ranges for the stop loss orders only upto normal fluctuations
   and be protected from sudden losses. The reason you'd use a different
   smaller percentage for stop loss orders is that on the upside you may want
   to wait but not taking any chances on the downside.

   Also if you have an idea of dividend distributions coming up for each
   company and what they're likely to be, I'd adjust the sell orders at the
   higher prices and as well as stop loss orders  accordingly on a company
   by company basis. 

   Nari

      If  you *really* don't want to manage individual stocks, then sell
      them all now and be done with it.  (Where "now" means a 1-3  month
      time.)   Note  that  I  don't  think  this is necessarily the best
      approach.  If you now have ~$800,000 invested, you can  afford  to
      pay a portfolio manager to get you better earnings.  No, I have no
      idea how to find one such....
      
      If  you  sell  everything,  talk  to  various  brokers  about  the
      commission fees they will charge.  $400,000 is enough to look  for
      bids of lower than standard fees.  You might also look for a local
      broker who will sell the stocks and write off the fee (or part  of
      it) as a charitable contribution.

    
    	I agree with Charlie in .4: If the basis of your question is from
    the notion that you don't want to manage specific stocks, then sell
    them.  One suggestion: if you don't know where to move the money to and
    like the idea of slowly getting out of the blue-chips as you see other
    opportunities, how about selling all the stocks and moving the money
    into a blue-chip stock fund?  This way, you haven't fundamentally
    changed your total risk exposure, but you are no longer managing
    specific stocks and you can move the money at will.
    
    							-craig

    "Our priority is to conserve wealth" -- sell now.
    If you want to gain or lose wealth (maybe even conserve), wait.
    
    I'm a little nervous about what might be coming up.   I'd probably sell
    all now, put it into a safe Fidelity account and then phone switch equal
    purchases over the next 24 months to dollar average into the fund(s) I
    wanted to get into. -wd-

    I'd sell everything now.  The Committee to re-elect Clinton is telling
    him to get the recession over with in his first year of office, so as
    to ensure a booming economy by 1996.  Plus he can blame a 1993
    recession on George Bush, but not a 1995 recession.
    
    Therefore I think the market will head generally downward over the next
    year, possibly bottoming in August 1993.
    
    Therefore, I suggest cash for now.
    
      John