Monday, February 09, 2009

2/9/09 Stock Position Update - A Big Up Week

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. I have also not taken any action on the 10/20/08 Buy List, which has received sell signals for 5 out of 5 of the stocks by 11/2/08.

However, some of the metrics in the modified Unemotional Growth System indicate there may be a rally in the near term. I finalized a new buy list on 1/12/09.

The portfolio was up even though the market indices were down for the week. The holdings are up 11.7% from the previous week. Both commodity and energy stocks advanced, with Potash gaining about $16. The overall portfolio is down 24.9% and the remaining holdings are down 39.2%. The previous bottoms occurred October 10, 2008 at -35.0% and -53.0% respectively. 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). Southwestern Energy was the only stock identified for the 1/12/09 buy list.

From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]SharesPurchase Price

Price on 2/6/09

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 1/12/09 buy list.

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 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.

At first, 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 $4.14 on 2/6/09. 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 2/6/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8280.59, 1591.71, 868.60, above the 2008 closing lows of 7552.29, 1316.12, and 752.44 , respectively. The Dow, Nasdaq and S&P 500 are returns are -5.27%, 0.93% and -3.57% respectively year to date, with the Nasdaq going positive for first time this year. I believe the gains from last Friday will follow through this week.

Economists now acknowledge that the economy has been in recession since December, 2007. I expect the market will likely continue to be choppy. For now, I am looking reinvest the cash that was raised at the end of 2008 and I will no longer be trying to short stocks. Also, we will not be adding any new money, until the Dow crosses either 6000 or 10,000.

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

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