One of Warren Buffetts famous investing sayings is be fearful when others are greedy and greedy only when others are fearful. Or, in other words, sell when others are buying and buy when theyre selling.
But we might expect Foolish investors to know that, and looking at what Fools have been selling recently might well provide us with some ideas for investments that may be past their prime
So, in this series of articles, were going to look at what customers of The Motley Fool ShareDealing Service were selling last week, and what might have made them decide to do so.
Between July 2009 and January 2014 the share price of Vodafone (LSE: VOD) (NASDAQ: VOD.US) more than doubled. But when it sold its 49% stake in Verizon Wireless back in February many investors were concerned that the companys best days were now behind it.
And the fact that Vodafones share price has fallen 7% since the disposal, compared with a fall of just 1.5% in the FTSE 100, might suggest they were quite right to be concerned.
So perhaps the somewhat lacklustre performance is what persuaded enough people to sell Vodafone last week to put it in the number 4 slot in our latest Top Ten Sells list.*
Mind you, after a six month long slump, dropping to 184p in mid-October, Vodafones share price has recently left the market standing, with a 22% rise in share price over the past six weeks or so, versus an 8.3% rally by the FTSE 100.
So maybe its actually Vodafones recent spurt that prompted the sell-off, with recent buyers taking a quick profit.
But whatever their reason for selling,might people have been better to hang on to their shares? What do Vodafones prospects currently look like?
Despite the company predicting a slight rise in full-year profits which it now expects to come in at between 11.4bn and 11.9bn Vodafone is still operating in a highly competitive market. And its a market thats still experiencing significant convergence.
The holy grail of the industry is now the quad play bundle to sell customers a package of broadband, pay-TV, fixed-line telephony and mobile, thereby blocking out your competitors from every angle.
Virgin Media launched the first quad play bundles in the UK back in June, and the rest of the big players are now making strenuous efforts to catch up.
For example, in addition to its dominant position in both broadband and pay-TV, BT is now seeking to become a major player in mobile, too, via an acquisition, perhaps of O2 or EE.
And then theres Sky, which already sells TV and fixed-line telephony services alongside its broadband provision, and which has recently been in talks with the main UK mobile operators about piggy-backing on their networks to offer a virtual mobile service to its customers.
So whats Vodafone going to do? Launch its own broadband and TV services in spring next year, thats what, using the fibre network it acquired when it bought Cable & Wireless Worldwide (C&WW) in 2012.
As Vodafone CEO Vittorio Colao said recently: If BT comes more into mobile then we will go more into consumer broadband.
Indeed, he may well be planning to kill two birds with one stone, by buying the European business of Liberty Global, which owns Virgin Medias cable network.
That would give Vodafone a superfast fibre broadband network that reaches more than half of UK households and thats on top of the 20,500km fibre network it got when it bought C&WW and remove a competitor from the marketplace at single stroke.
So whilst theres undoubtedly going to be very stiff competition, if Vodafones plan comes together there could be a lot of upside left in its share price.
And theres also the near-5% dividend to enjoy whilst waiting for that to happen.
But, of course, whatever anyone else was doing last week, only you can decide if Vodafone is a buy or a sell right now.
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Jon Wallis owns shares of Vodafone. The Motley Fool UK has recommended Sky. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
* based on aggregate data from The Motley Fool ShareDealing Service.