However, some of the metrics in the modified Unemotional Growth System indicate there may be a rally in the near term. Two weeks ago, I did a preliminary update for the buy list based on the system. I had intended to finalize the list last week, but will do it this week.
The portfolio was down slightly more than the market. The holdings are up 13.3% from the previous week. The overall portfolio is down 28.9% and the remaining holdings are down 44.6%. 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 through November 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).
|Stock [purchase date]||Shares||Purchase Price|
Price on 1/2/09
|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 and make no more purchase since sell signals have been give for every stock, except for Southwestern Energy, which appears on the new preliminary buy list.
|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 didn't short 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.
I was looking for other stocks to short, but at this point, I think it's too risky to be shorting .
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, rebounded to $14.19 on 10/31/08 before falling again to $3.23 on 11/21/08. It closed at $7.09 on 1/2/09. It's too bad I didn't hold the short position until now :-)
The market continues to be choppy. All three indices are in bear market territory. As of the close on 1/2/09, the Dow, Nasdaq and S&P 500 indices were respectively down 28.74%, 37.45%, and 34.06% for one year, above the sixth low this year of 37.77%, 47.81%, and 44.39% from the 11/24/08 update.
Economists now acknowledge that the economy has been in recession since December, 2007. The lack of any significant gains since the TARP package approval, the post election decline, the recent Thanksgiving week rally, and the automaker bailout indicate the market will likely continue to be choppy.
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 raised about 10% cash by year end, to be reinvested in early 2009.
Disclosure: At time of publication, I am long Range Resources, Potash and Southwestern in my trading account. The managed accounts are long Hess, Potash, Range Resources, and Sears Holdings.
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