Monday, November 12, 2007

11/12/07 Stock Purchase Update - Remaining Position Is Still Strong

In my 11/5/07 stock purchase update, I wrote about how my stock buy selections of Terex (TEX), Potash (POT), Shaw Communications (SJR) and Avnet (AVT) were performing. In that update, the portfolio was still benefiting from the Fed rate cut and was up $3,543 for a 20.2 % gain, for a new high. As of 11/9/07, the portfolio achieved a new high of $3,543 for a 20.2% gain. I had owned AVT for 5 months before selling it for a 5.1% gain,TEX for 4 months before selling it for a 3.9% gain and SJR for 5 months before selling it for a 22.8% gain. Here's the current status on the one remaining stock:

My Wealth Builder 5/28/07 Buy List
StockSharesPurchase Price

Current Price
11/9/07

Potash (POT)50

$71.39

$119.75

Shaw Communications B (SJR)100*

$21.755

sold @$26.85

Avnet (AVT)200

$38.21

sold @ $40.15

Terex (TEX)50

$82.56

sold @ $85.77



* 2 for 1 split on 8/3/07

Overall, I am very happy with the performance of these four stocks, given the volatility in the market. The system has worked well in closing out positions in TEX, SJR and AVT. If I were still holding all four stocks, my portfolio return would be much lower at $1795 for a 10.3% gain. Since the last update, POT was down $1.55, weathering last week's big market decline. I have owned POT since June, 2007 and it has contributed significantly with a 67.7% gain in that time.

I continue to be impressed with my commitment to stay with the system recommendations, in spite of the market volatility. In the past, I would have closed out the entire position with this level of volatility. Given the performance of the portfolio, I am glad I held my positions instead of allowing myself to be whipsawed by the market each week. However, because of the recent decline, I may close out the final position of POT this week. Even a strong stock will eventually be impacted by an overall market decline.

The recent events (credit crunch, central bank interventions) originally had convinced me that the bull market is in its last stage, and I was considering closing out these positions during the next significant rally. However, the Fed rate cuts of 0.5% for the discount and Fed funds rate of September 18, 2007 lead me to believe the bull market will last about another year. Recently, I identified a new set of stock purchases in my 10/15/07 updated buy list from the modified Unemotional Investor Growth system.

At this point, I have not made any purchases from the new stock pick list, since the market rally has not been consistently strong. The market activity continues to be concerning, with narrow breadth and a high number of new lows. I have been staying on the sidelines for new purchases until the market strength and breadth is better. However, if their appears to be a major capitulation, I may make some small purchase in PCU, CNH and BHP.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC

1 comment:

The Saving Freak said...

This is a really interesting method for picking stocks. I look forward to more posts like this. I am just now looking at individual stocks in addition to my normal mutual fund investing.