Another way we seek to capture losses is to replace losing stocks with similar, but equally attractive, stocks. An example in the Oakmark Fund from this past quarter was selling our remaining Cenovus (CVE) shares and redeploying the proceeds into Chesapeake (CHK). We believe Cenovus is a fine, well-managed company, but due to rapidly declining oil prices, it had fallen beneath our purchase price. Another company we believed was also fine and well-managed, Chesapeake, had fallen to a price where it appeared to us to be more attractive than Cenovus. So even though Cenovus was far beneath our sell target, we captured the loss, increased our exposure to an energy sector we thought was cheap and switched to a stock we believed was somewhat more attractive.
From Bill Nygren (Trades, Portfolio)'s 4Q 2014 Market Commentary.
