Monday, October 06, 2008

10/6/08 Stock Position Update - Holdings Down Over 40%

I continue to take no further action based on my buy list and short list of 7/7/08. So far I have taken four long and one short position, which has been closed. Given the extreme volatility of the market, I continue to be cautious for both purchases and selling short.

The returns were horrendous this week. Due to the no vote for the bailout early in the week , the holdings lost about 15% from last week. The overall portfolio is down 27.8% and the remaining holdings are down 43.2%. The only positive still has been the gain from shorting Las Vegas Sands. Otherwise, the prices of these stocks have been destroyed by the past week.

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 system has given a sell signal for Williams Cos. (8/8/08), Range Resources (8/22/08), Hess (9/12/08), Research in Motion (9/12/08) and Southwestern Energy (9/26/08). The stocks on my 7/7/08 short list were: Las Vegas Sands (LVS), Sears Holdings (SHLD), and Life Time Fitness (LTM).

From My Wealth Builder 7/7/08 Buy List

[purchase date]
SharesPurchase Price

Price on 10/3/08

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



*Range Resources received a sell signal on August 22, 2008. I plan to sell it once it reaches the original purchase price.
**Southwestern Energy received a sell signal on September 26, 2008. I plan to sell it once it reaches the original purchase price.

At this point, I will continue to hold these stocks. Although I am extremely tempted to buy more as the stocks decline, I will make no additional purchases at this time.

From My Wealth Builder 7/7/08 Short List
Stock [short date]SharesShort 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, but have not identified other good candidates as of today.

On 8/15/08, Las Vegas Sands closed at a short term high of $56.30. It closed at $23.11 on 10/3/08 . It looks like I have missed the opportunity to take another short position in Las Vegas sands.

The market continues to be choppy. All three indices have been in bear market territory. As of the close on 10/3/08, the Dow, Nasdaq and S&P 500 indices were respectively down 20.6%, 20.58%, and 23.91% year to date. The three indices blew past the third bottom of 17.70%, 17.81%, and 18.77% in my 9/15/08 Stock Position Update.

I continue to believe that the probability of a recession in 2008 is relatively high, if we are not already in one. With the bailout package approved signed into law, I am hoping for a market rally next week. However, the lack of a positive response on Friday doesn't give me much hope a rally will occur.

For now, I am shifting to more cash and I will no longer be trying to short stocks. 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 Research in Motion, Range Resources, Williams Companies, Hess, and Sears Holdings.

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

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