Today we sold our 210 shares of Eagle Rock Energy Partners LP (EROC) with a stellar 94% profit after holding the stock for a whole year.

Yufan executed the sale in front us on the computer screen in Taylor F. It was gratifying to take this step forward and cash in some fruits of our labor. ­čÖé All of our members present consented to this sale.

EROC is a domestically focused energy company in the business of natural gas. It has been making negative earnings for two years except for two quarters last year. We had looked at this stock before winter but decided to postpone the sale because natural gas prices generally rise during winter, which is a good sign for companies like EROC.

Our rationale for selling it:

  • Disappointing earnings: Stocks like EROC can’t go up forever without the support of strong earnings.
  • We are lucky to get a 94% increase in price already, far exceeding our original selling benchmark of 65%.
  • It’s time for us to diversify our portfolio and invest in other stocks.

Because of time limits, we didn’t look into other stocks today. But one sector to look into is rare-earth. China has been setting up export quotas for its rare-earth resources. As a result, US companies have increased their production, making it a good time to look into this revived industry.

Other than EROC, Ruilin introduced to us the concept of Options. According to Investopedia, the definition of an option is: A contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a specific price on or before a certain date. An option, just like a stock or bond, is a security. It is also a binding contract with strictly defined terms and properties.

One more thing: Forte Foundation’s Career Lab is taking place on campus soon. Please make sure to check your mailbox and RSVP soon if you are interested. This is a free event and will expose you to a myriad of information related to business.