I hold both Alcoa (AA) and ArcelorMittal (MT).
Both of them sell a commodity product and are effected by the vagaries of the world economy. There is not much pricing power and the only difference a great management makes is surviving when things are really bad and performing well when they are better.
I admire both Klaus Kleinfeld (the CEO of Alcoa) and Laxmi Niwas Mittal (the CEO of ArcelorMittal).
I do not see why I should hold both these companies. So, I have decided to cut Alcoa loose. Mr. Mittal has built his business from scratch and has seen a lot worse than the current situation. There was a time in the 2000s when the stock price of Mittal Steel touched $1.
I do not doubt the ability of Mr. Kleinfeld. I admire the work he did at Siemens (SIE) and the integrity he showed there. But I will choose Mr. Mittal over him. In this kind of businesses – where history and knowledge of cycles play a major role – experience can mean a difference between success and bankruptcy.
I have hence decided to sell Alcoa and add the proceeds of the sale to ArcelorMittal. This will reduce my work load a bit by removing Alcoa from the list of companies I keep track of.