At this time, the holdings are not doing well. The overall portfolio has fallen 9.7% and the remaining holdings are down 18.3%, which is up slightly from last week's update. The only positive has been the gain from shorting Las Vegas Sands.
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 8/15/08
|Range Resources (RRC) [7/10/08]||50|
|Potash (POT) [7/18/08]||10|
|Southwestern Energy (SWN) [7/18/08]||50|
|Potash (POT) [7/24/08]||10|
The fall in oil and commodity prices has caused Range Resources, Southwestern Energy and Potash to continue declining this week. Apparently demand for gasoline and fertilizer is expected to keep falling. At this time, it appears that this portfolio is negatively correlated with the holdings by my financial advisor and my company stock.
At this point, I will continue to hold these stocks, but will make no additional purchases.
|Stock [short date]||Shares||Short Price|
|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 have closed. I won't be shorting Sears Holdings and Lifetime Fitness since both stocks need to be "rented" from a shareholder for about 0.1% a day and a minimum of $50,000 needs to be shorted. Too expensive for me to short. I need to find other stocks for shorting.
On 8/15/08, Las Vegas Sands closed at $56.30, significantly higher than 7/11/08 probably due to short covering. I will likely short Las Vegas Sands again once this rally weakens.
The market continues to be choppy. All three indices have been in bear market territory. As of the close on 8/15/08, the Dow, Nasdaq and S&P 500 indices were respectively down 10.3%, 7.53%, and 10.4% year to date. The three indices are significantly above the second bottoms of 15.2%, 15.58%, and 14.63% in my 7/14/08 Stock Purchase Update.
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 try to 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 a duplicated funds during any strong rally which may occur.
Disclosure: At time of publication, I am long Range Resources, Potash and Southwestern in my trading account. The managed accounts are long Range Resources, Hess, and Sears Holdings.
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