For reference, the stocks on my 7/7/08 buy list were: Potash (POT), Research in Motion (RIMM), Bucyrus (BUCY), Williams Cos. (WMB), Southwestern Energy (SWN), Hess (HES), and Range Resources (RRC). The stocks on my 7/7/08 short list were: Las Vegas Sands (LVS), Sears Holdings (SHLD), and Life Time Fitness (LTM).
|Stock [purchase date]||Shares||Purchase Price|
Price on 7/18/08
|Range Resources (RRC) [7/10/08]||50|
|Potash (POT) [7/18/08]||10|
|Southwestern Energy (SWN) [7/18/08]||50|
Originally, I was not planning to purchase any of the four oil and gas stocks: Williams Cos. (WMB), Southwestern Energy (SWN), Hess (HES), and Range Resources (RRC). However, this week's further decline in oil prices caused me to reconsider and buy Southwestern Energy and Range Resources. In addition, I decided to buy Potash even though it was above my target price 200, since my market indicators show a rally is likely to happen.
|Stock [short date]||Shares||Short Price|
Price on 7/18/08
|Las Vegas Sands (LVS) [7/7/08]||100|
closed 7/11/08 @ 33.69
I have only able to short Las Vegas Sands so far, which I closed out before the market rally of last week. When I tried to short Sears Holdings and Lifetime Fitness two weeks ago, my broker cancelled the order since the "stock is not available to sell short." This seemed strange since both stocks have trading volumes between one and three million shares per day. If the market rallies significantly this week, I may try to short all three stocks again.
The market continues to be choppy. As of the close on 7/18/08, the Dow, Nasdaq and S&P 500 indices were respectively down 12.12%, 13.93%, and 13.13% year to date. Two of the three indices are significantly below the previous respective lows of 9.37%, 16.58% and 11.86% in my 3/17/08 Stock Purchase Update. In addition, all three indices have been in bear market territory.
I continue to believe that the probability of a recession in 2008 is relatively high, if we are not already in one. The multitude of negative factors will eventually outweigh any actions by the government and financial institutions. Originally, the Fed interest rate cuts and other actions led me to expect that the bull market would last through summer, 2008. However, the economic data of the first half 2008 has caused the bull market to end earlier. I expect the market to continue to be choppy in 2008 with many short term rallies and declines.
For now, I will create a long and short portfolio in my trading account. I will continue to maintain my holdings managed by our financial advisor, and plan to sell of small portions during any short term rallies, which hopefully will occur.
Disclosure: At time of publication, I am long Range Resources, Potash and Southwestern Energy in my trading account. The managed accounts are long Range Resources, Hess, and Sears Holdings.
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