Sunday, November 02, 2008

11/2/08 Bottom Fishing Portfolio Update - Maybe a Bottom Last Week

On Friday, October 3, 2008, I couldn't resist the temptation of buying some stocks before the bailout vote. I bought shares of Bank of America (BAC), J.P. Morgan (JPM), Wells Fargo (WFC) and Monsanto (MON). I believed that these three banks will not only survive this financial crisis, but will be one the four major banking powers in the next year. Monsanto was down over 50% from its high and its seed and agricultural businesses are still very strong.

It appears that a bottom has occurred. The overall portfolio rebounded last week and is down 13.89%, after being down as much as 27.15% the previous week. Monsanto is now at break even and I've closed the Monsanto put for a small profit.

Bottom Fishing Portfolio
Stock [purchase dateSharesPurchase Price

Price on 10/31/08

Bank of America(BAC) [10/3/08]100



J.P. Morgan (JPM) [10/3/08]100



Wells Fargo (WFC) [10/3/08]100



Monsanto (MON) [10/3/08]50



I also sold one Nov 60 put contract on Monsanto. The contract is an obligation to buy 100 shares of Monsanto at $60. I closed out the contract at $0.91, for a profit of $148.49, or a 62.10% gain.

Put Contracts Sold Short to Open
Stock [short date]SharesShort Price

Price on 10/31/08

Monsanto Nov 60 put (MONWL) [10/3/08]100


closed on 10/29/08 for $0.91

At this point, the market and these stocks appear to be in a short term rally. If the financial stocks become profitable, I will consider selling them or hedging the financial stock positions with the Ultrashort Financial ProShares (SKF), by selling an out of the money put.

Disclosure: At time of publication, I own Bank of America, J.P. Morgan, Wells Fargo and Monsanto shares.

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

Copyright © 2008 Achievement Catalyst, LLC

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