It comes after a day when Ford (F) shares reached a decade high, price levels it has not seen since the turn of the century, that I ask myself a critical question: "Am I A Ford Investor, Or An Investor?" People who have followed my investments long enough would understand my love for Ford stock. I practically think and talk about Ford every single day. I love the company for its iconic brand, its business reformation and transition towards electric vehicle, and most importantly the outperformance of the stock for the past year, one that has certainly awarded me a lot of wealth. 

If you call me a Ford investor, I would seek a clarification: I am just an investor. What is the difference? I am an investor because I saw an opportunity to make money in a clearly transforming, well-performing company whose stock was under-appreciated in the capital market. I got into Ford when its main product has been the best-selling vehicle in America for 4 decades, yet the stock traded at an 8 times forward price-to-earnings ratio, at a valuation that is less than companies who haven’t turned a profit, haven’t sold any cars. The dislocation between how well a company is doing and how terrible the stock was trading attracted me. That’s what I was enthusiastic about in Ford (F). I loved the dislocation, and certainly I was proven right.

Fast forward until now, Ford is trading at 13 times forward P/E - a historically high valuation, and a market capitalization that has almost doubled in half a year. To me, the dislocation has gotten blurrier, or less attractive. If I were a Ford investor, I would stay fully invested in Ford, something that people my age would refer to as "HODL, or Hold On for Dear Life. But as an investor, I have to part ways, because I am much less enthusiastic about the investment here.

It is my belief that Ford stock has gotten too far ahead of itself and at this price level, I no longer own a dislocation story, but rather a priced-for-perfection story, one in which the company has to execute so well or else the high hopes that have been priced in can quickly evaporate. You will see that for the past 5 months, as Ford has been climbing from 13$/ share to 25$/ share, the weighting of Ford in our investment portfolio has been decreasing from 25% to 15%. As share price rises, our portfolio becomes less and less dependent on the stock, because the attractiveness wanes. 

The bottom line: I want to share with you that as a portfolio and wealth manager, it is not solely about the company, but about how the stock trades versus the company. Most companies that go public have something unique about them that can get people excited. But in the stock market, in order to make money, you can't just focus on the company; you have to look at how the stock trades and make multiple comparisons. Ultimately, we participate in a market of stocks, one in which we decide to buy or sell based on our valuation of the business. With a >80% win rate in my investment picks over the past year, I advise investors to be just that, investors. Don’t be afraid to part ways with the stock even though you love the company’s products.