Monday, May 26, 2008

5/26/08 Stock Purchase Update - The Rally May Be Over

With the market decline of early 2008, these stock purchase updates have not been as fun to write. However, I am going to remain disciplined and do a weekly update until I sell the positions from the portfolios. The original portfolio was based on a 10/15/07 updated buy list of Potash (POT), Southern Copper (PCU), CNH Global (CNH) and BHP Billiton (BHP) and a January, 2008 stock pick update of Apple (AAPL), Research in Motion (RIMM), Intuitive Surgical (ISRG), Priceline (PCLN), Core Labs (CLB), and Google (GOOG).

The overall portfolio lost 3.1% last week and now has total return of 18.0%. I sold 25 shares of for a 43% gain. All three of the remaining holding fell this week. Here's the current status of the stocks in the portfolio:

My Wealth Builder 10/15/07 Buy List
Stock [purchase date]SharesPurchase Price

Current Price 5/23/08

Potash (POT) [6/7/07]50



Southern Copper* (PCU) [11/13/07]40


sold 2/19/08 @ 109.05

CNH Global NV** (CNH) [11/13/07]50


sold 4/07/08 @ 56.87

BHP Billiton*** (BHP) [11/27/07]50


sold 2/19/08 @ $73.98

*On 1/18/2008, the system gave a sell signal for PCU.
**On 2/1/2008, the system gave a sell signal for CNH.
***On 2/15/2008, the system gave a sell signal for BHP.

My Wealth Builder January, 2008 Buy List

Stock [purchase date]
SharesPurchase Price

Current Price 5/23/08

Apple** (AAPL) [1/17/08]25


sold 4/25/08 @ $169.06

Research in Motion (RIMM) [1/17/08]25


sold 2/22/08 @ 103.23

Intuitive Surgical (ISRG) [1/18/08]20



Priceline (PCLN) [1/18/08]25


sold 5/20/08 @ 132.10

Core Labs* (CLB) [1/25/08]25


sold 2/19/08 @ $121.67

Google** (GOOG) [1/25/08]20



Google** (GOOG) [2/1/08]10


sold 5/12/08 @ 582.12

Google** (GOOG) [2/26/08]10


sold 4/29/08 @ 552.99

*On 2/8/2008, the system gave a sell signal for CLB.
** On 3/7/2008, the system gave a sell signal for AAPL and GOOG. Previously, I had planned to hold GOOG since it is part of my core holdings. However, now I will sell this portfolio's remaining 20 shares (or an equivalent number of shares purchased earlier) of GOOG over the next few weeks, if the shares continue to rally.

The market rally appears to have ended, with indices down over 3%. As of the close on 5/23/08, the Dow, Nasdaq and S&P 500 indices were respectively down 4.92%, 7.83%, and 5.51% year to date, significantly up from lows of 9.37%, 16.58% and 11.86% in my 3/17/08 Stock Purchase Update, but down 3.85%, 3.33% and 3.44% from the previous week.

I continue to believe that the probability of a recession in 2008 is relatively high, if we are not already in one. The multitude of negative factors will eventually outweigh any actions by the government and financial institutions. Originally, the Fed interest rate cuts and other actions led me to expect that the bull market would last through summer, 2008. However, the economic data in early 2008 has caused the bull market to end earlier. For either case, I expect the market to continue to be choppy in 2008 with many short term rallies and declines. For now, I do not plan to add any more to the amounts that I have already invested in the above tables and will be looking to close out positions, even without a sell signal. I will take some profits on long term gains at a 0% tax rate on Potash and Google when possible.

Full disclosure: I own all the stocks mentioned in this post that are not indicated as sold.

For more on Strategies and Plans, check back every Monday for a new segment.

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

Copyright © 2008 Achievement Catalyst, LLC

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