During early April, I plan to update my buy list based on the modified Unemotional Investor Growth System.
The portfolio rose 7.4% this week versus 6-7% for the market, due primarily to Potash gaining about $12 this week. The energy stocks advance significantly midweek, only to pull back on Friday. The overall portfolio is down 21.4% and the remaining holdings are down 38.5%. The portfolio is now way above the previous bottoms that 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.
| Stock [purchase date] | Shares | Purchase Price | Price on 3/27/09 |
| Range Resources(RRC) [7/10/08]* | 50 | $58.17 | $42.69 |
| Potash (POT) [7/18/08]* | 10 | $215.09 | $88.71 |
| Southwestern Energy (SWN) [7/18/08]* | 50 | $39.46 | $31.97 |
| Potash (POT) [7/24/08]* | 10 | $192.02 | $88.71 |
| Southwestern Energy (SWN) [3/5/09]* | 50 | $29.44 | sold on 3/18/09 @ $30.52 |
*Range Resources received a sell signal on August 22, 2008. Southwestern Energy received a sell signal on September 26, 2008. After received a buy signal on 1/12/09, Southwestern Energy received a second sell signal on 3/6/09. 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.
| Stock [short date] | Shares | Short Price | Price |
| Las Vegas Sands (LVS) [7/7/08] | 100 | $38.10 | 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 a weekending low of $1.77 on 3/6/09. It closed at $3.14 on 3/27/09. It's too bad I didn't hold the short position until now :-)
The market continues to be choppy. The Dow and S&P have reached 12-year lows. As of the close on 3/27/09, the Dow, Nasdaq and S&P 500 indices were respectively at 7776.18, 1545.2o, 815.94. All three indices rose significantly from lows in 2009 in the past three weeks. The Dow, Nasdaq and S&P 500 declines are -10.55%, -2.02% and -9.0% respectively year to date.
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. I cashed in 9% of one of our managed funds, since I believe the rally will soon end. I still plan to trickle in around 25% of the funds over the next few weeks, but want to wait for a pull back. However, 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, Sears Holdings and Williams Companies.
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This is not financial or investment advice. Please consult a professional advisor.
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1 comment:
I really enjoy your blog.
However I don't agree of using a "mechanical" system to buy and sell stocks. I think a lot of great investors have written about the folly of using a mechanical system, so I'm not going to repeat my arguments here. Every one can follow a mechanical system but not every one can make money in the stock market.
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