Fortune Magazine article about St. Joe

[SHELLY]

Here's an insider trading chart that goes back to the beginning of 2005:

That's about $16 MILLION plus change for JOE's CEO and that's not including his salary and the company car--nice work if you can get it!! Thanks shareholders!!

Who said you can't make money selling swampland--not Rummell!

"But today even the likes of the St. Joe Company, whose stock is traded on the New York Stock Exchange, are in a high-speed mode to develop swampy areas. "Someone told me, 'When you're selling, it's called pristine nature; if you're buying, it's a swamp,' " said Peter S. Rummell, chairman and chief executive of St. Joe. His company is selling home sites bordering on marshy areas in northwestern Florida for up to $750,000 apiece, billing them as the "ultimate personal retreat."

"We're looking at wetlands as amenities, as new vistas," Mr. Rummell said. "More people are getting used to the idea that a swamp can be just as alluring, if not more so, than a beach. There are people - my wife is one - who are just as happy walking in the woods with binoculars looking for birds as they are strolling the beach. We're appreciating the variety more. A beach is a beach. But the marsh can be more interesting with its grasses, islands and unbelievable life."

Say Hi to Ms Rummell next time you see her stomping through the swamp in her Manolo Blahniks.

 

[Paula]

I bought JOE at $73 in July, saw it go up to $85 later in the summer, and it's now around $60. I'm holding onto mine, though, because most analysts are saying, hold or buy it right now. Then, again, I didn't invest a lot in JOE, just enough to make it interesting to watch. The real estate market is crazy right now (a buyers market) but I believe this is cyclical and a reasonable short-term correction.

When Whole Foods had something similar happen several years ago, we sold our stock -- sure wish we had kept that one...

 

[SHELLY]

>>Then, again, I didn't invest a lot in JOE, just enough to make it interesting to watch.<<

How low will the price have to go before it is no longer "interesting"?

Since you're just in JOE for fun and you're already down $13 per, "locking in profits" isn't an issue in your case--otherwise, it would be prudent to have a stop-loss order for 50% of holdings around the $58 dollar mark. Some are holding out waiting for JOE's quarterly report the end of the month. If you start seeing a lot of selling about 2 weeks prior, the numbers ain't gonna be good. If that is the case, this thing is going to drop pretty quick. Just in case, having a stop-loss in place before the quarterly release (or some puts at the $60 range) might not be a bad idea for long-time holders.

Push come to shove, at the end of the year one can sell off JOE and write off the losses against the gains in their energy stocks.

 

[Paula]

Yes, that's good advice. I'm going to ride this one out for a while, though, because I still see potential for the long-run (up to a point). I read the book about St. Joe and the coast, I like the quality of their building and communities, I like it that they win awards for attention to the environment (I know much of this may be "press" and attention getting, but they're probably better than many), I think the fact that the CEO is a former Disney Exec. and has a good team is very positive (and I'm not a Disney fan, but they do know how to figure out what people want, they do their research, and they plan carefully), etc., etc. The thing that would scare me is if they were doing anything unethical or if there was a change in leadership. Other than that, I think they're still good for my portfolio in the long-run.

There's a book called Blink by Malcolm Gladwell that is about how many people make decisions based on what looks like intuition, but it's "thin slicing" -- identifying and analyzing key things and making decisions based on this little bit of information. I'm hoping I'm doing some effective "thin slicing" with JOE. I may be wrong, but I'm willing to take the loss if I am and the gain if I'm not (again, it's not a lot and I didn't bet the kid's future or our future).

But I appreciate the warnings and am keeping these things in mind as well -- there's clearly a problem and I'm betting that it's short term and temporary economic/market corrections.