In hindsight, I bought the financial stocks way too early. I've learned my lesson. I will not purchase any more financial company stocks, until there is a more clear turnaround in the financial crisis of 2008.
A new bottom occurred, due mainly to Bank of America, which is now down 56.79%. The overall portfolio declined again last week and is down 29.78%, surpassing the low of -27.15% from three weeks ago. Monsanto is also now declining, after being at break even for the past two weeks. The Monsanto put was closed on 10/29/08 for a small profit.
|Stock [purchase date]||Shares||Purchase Price|
Price on 11/14/08
|Bank of America(BAC) [10/3/08]||100|
|J.P. Morgan (JPM) [10/3/08]||100|
|Wells Fargo (WFC) [10/3/08]||100|
|Monsanto (MON) [10/3/08]||50|
I also sold one Nov 60 put contract on Monsanto. The contract is an obligation to buy 100 shares of Monsanto at $60. I closed out the contract at $0.91, for a profit of $148.49, or a 62.10% gain.
|Stock [short date]||Shares||Short Price|
|Monsanto Nov 60 put (MONWL) [10/3/08]||100|
closed on 10/29/08 for $0.91
At this point, the market and these stocks appear to be declining again. If Monsanto falls reaches the low 70s, I will consider selling a put contract, either a November 40/50 or December 50, on the stock again. I will hold the financial stocks, but make no additional purchases.
Disclosure: At time of publication, I own Bank of America, J.P. Morgan, Wells Fargo and Monsanto shares.
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Copyright © 2008 Achievement Catalyst, LLC