Monday, July 28, 2008

7/28/08 Stock Position Update - Purchased More Potash

I have continue to take actions based on my buy list and short list of 7/7/08. So far I have taken four long and one short position. At this point, I believe the market will have a short term rally. Given the volatility of the market, I continue to be cautious for both purchases and selling short.

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 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 7/25/08

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



The fall in oil material prices has caused Southwestern Energy, Range Resources and Potash to decline this week. I used this as an opportunity to buy more Potash below my target price 200.

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. When I tried to short Sears Holdings and Lifetime Fitness two weeks ago, my broker cancelled the order since the "stock is not available to sell short." In talking to a broker, I found out that shares of Sears Holding and Lifetime Fitness require special actions to be shorted. First, the stock 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 will need to find other stocks for shorting.

The market continues to be choppy. As of the close on 7/25/08, the Dow, Nasdaq and S&P 500 indices were respectively down 13.08%, 12.89%, and 13.35% year to date. Two of the three indices are significantly below the previous respective lows of 9.37%, 16.58% and 11.86% in my 3/17/08 Stock Purchase Update. In addition, all three indices have been in bear market territory.

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 of the first half 2008 has caused the bull market to end earlier. I expect the market to continue to be choppy in 2008 with many short term rallies and declines.

For now, I will try to create a long and short portfolio in my trading account. 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 Range Resources, Hess, and Sears Holdings.

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

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