aWell this market action is like trying to tackle Barry Sanders in the open field - evasive!
I feel peeved at self as I was positioned quite well as of 3:40 PM yesterday with a 10% Ultrashort exposure, but I was duped by that head fake in the closing half hour and lightened up. Ugh. That said, I liked what I bought late yesterday, I just wish I had waited til this morning.
What I am seeing today... it looks like we are moving over to fear stage which is 'good'. High beta teflon tech getting hit again and FINALLY solar is getting hit. Leadership needs to get swamped before we recover. That said, most days that start this ugly don't end well, but there are always exceptions to the rule. (I am not counting on it)e
Today I took a hatchet to my Ultrashort ETFs and am down to the lowest exposure in a very long time; I also closed my UltraShort Oil & Gas (DUG) - not because I don't think oil prices won't go down but this was supposed to be a hedge against my heavy energy positions and since then I've lightened up on my energy exposure and hedged in a different way; with refiners (which will benefit if crude falls) - plus I need cash.
I did a lot of buying this morning
- I bought some of these teflon stocks - I restarted a position in Google (GOOG), I opened a new position in Research in Motion (RIMM), and I added to Apple (AAPL) and Baidu.com (BIDU)
- Crocs (CROX) is actually not down for the first time in recorded memory, I added more to my now largest position - at these prices this could be a double within a year.
- I have been very impressed at the two stocks I found through the best performers list of the past quarter - Mechel (MTL) and Millicom International Cellular (MICC) - so I added more today to each. I wanted to see how these did in a downturn and their relative strength has been magnificent.
- I added to 2 Indian stocks - ICICI Bank (IBN) which is the weaker of the 2 Indian banks I track and near a support and Sterlite Industries (SLT)
- I bought 2 stocks hit enormously hard - WuXi PharmaTech (WX) - I had just started a smallish position this week and the stock has been terrorized. I also added to the similarly blown out Excel Maritime (EXM) my own dry bulk shipper.
Am I catching the bottom? Who knows. I doubt it. But I have been waiting for this kind of weakness so you need to have your shopping list ready and when opportunities come, put the emotion to the side and buy what you are interested in. If the market truly melts down, well I suppose it happens but sentiment seems extremely negative and I truly do not know what more bad news there could be in the financial sector other than
Goldman Sachs (GS) coming out with a huge write off :) Everyone else has already confessed. Granted I don't think these kitchen sinks are the last we will hear ... but for now it should suffice.
Last can I say, how incredible are these fertilizer stocks? I had been hoping
Mosaic (MOS) or
Potash (POT) would take a 10-15% spill so I could add, but nothing....
Blue Coat Systems (BCSI) is also beginning to look interesting here in lower $30s but I am running low on cash again.
Cisco has really put a dagger into networking stocks.
Again, days that start this bad don't usually end in a great recovery but at this point we are nearer to the end than beginning of a meaningful correction but definitely could see worse if fear truly hits the market. (remember how bad it got in mid August) I am just trying to accumulate higher quality stocks and realize I won't get the absolute bottoms or tops. With earnings season nearing an end, I have a lot more data on what should be outperforming the next quarter so I keep moving the portfolio in that direction. That doesn't mean in the very near term, won't take some hits... but I expect these to rebound the best once we get back on track.
