Monday, July 07, 2008

Stock Buy List Update - 7/7/08

With the major Dow decline in the first half of 2008, I've decided to update my buy list, in anticipation of a good buying opportunity in the future. For background, see My Stock Picks for Q1 2007 for a description of the Modified Unemotional Investor Growth system. The Top 5 system is a direct application of the Unemotional Investor Growth system described in the book The Unemotional Investor by Robert Sheard.

My Wealth Builder Buy List - 7/7/08
StockSystem UsedTarget PriceTarget Shares
Potash (POT)Top 5, Modified

less than 200

10
Research in Motion (RIMM)Top 5, Modified

less than 90

10 to 20
Bucyrus (BUCY)Top 5

less than 50

20 to 50
Williams Cos. (WMB)Top 5

TBD

TBD
Southwestern Energy (SWN)Top 5, Modified

TBD

TBD
Hess (HES)Modified

TBD

TBD
Range Resources (RRC)Modified

TBD

TBD


Unlike previous buy lists, I plan to wait for a further market correction before buying any positions. Potash is currently $215, down from $241. Research in Motion is $117, down from a high of $148. Bucyrus is at $65, down from $79. I think these stocks may go down further before the next rally.

At this point, I do not plan to buy any of the other four stocks. Williams, Southwestern Energy, Hess and Range Resources are oil and gas stocks, which seems to me to be close to a speculative bubble, and may correct in the next year. My reasoning is that too many energy stocks are being identified by these two stock picking systems. In 2005, the system picks were over weighted with housing stocks, which was then followed by the major decline of these stocks.

Disclosure: At time of publication, I did not own shares of any stock mentioned in my trading accounts. Hess and Range Resources are owned in accounts managed by our financial advisor.

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

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2 comments:

investmentplayground said...

Do you think Potash is a little overbought at this point?

Super Saver said...

@ Investment Playground

I agree Potash is expensive at $220 and higher, which is why I sold my previous holdings in June, 2008. I plan to wait for a dip to under $200 before buying. Although it fell under $200 yesterday, I missed the opportunity. Hopefully, with the current market volatility, I will get another chance to buy.