Monday, November 03, 2008

11/3/08 Stock Position Update - Big Rebound

I continue to take no further action based on my buy list and short list of 7/7/08. I have taken four long and one short position, which has been closed. Since all the stocks have received sell signals, I'm no longer buying from the 7/7/08 buy list.

The portfolio was up significantly last week, as was the market. The holdings gained 25.7% from the previous week. The overall portfolio is down 23.7% and the remaining holdings are down 37.5%. The only positive still has been the gain from shorting Las Vegas Sands. Otherwise, the prices of these stocks have been destroyed by the October decline.

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 every stock: Williams Cos. (8/8/08), Range Resources (8/22/08), Hess (9/12/08), Research in Motion (9/12/08), Southwestern Energy (9/26/08), Postash (10/10/08) and Bucyrus (10/10/08). 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
Stock [purchase date]SharesPurchase Price

Price on 10/31/08

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. Southwestern Energy received a sell signal on September 26, 2008. Potash received a sell signal on October 10, 2008. I plan to sell the position once it reaches the original purchase price, which may take a very, very long time.

At this point, I will continue to hold these stocks. I will make no more purchase since sell signals have been give for every stock.

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 $6.32 on 10/24/08 and rebounded to $14.19 on 10/31/08. 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 are in bear market territory. As of the close on 10/31/08, the Dow, Nasdaq and S&P 500 indices were respectively down 28.18%, 35.11%, and 32.84% year to date. The three indices are now above a fifth bottom from the 10/27/08 update of -35.47%, -41.48%, and -39.24% respectively year to date.

Most economists now acknowledge 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 was hoping for a bigger market rally last week. The lack of a major gains indicates the market will continue to be choppy. In addition, the election results this week will likely add to the volatility.

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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