I just posted yesterday in my blog on how the perfect storm is brewing this week for housing stocks. Well on day one of the week, Mr Market disagreed. Although we hit a 9 year low in the housing market, Mr Market decided that it wasn't as bad as we thought it was gonna be, and gave a bump to housing stocks. To add fuel to the fire ABK and MBI rebounded in a huge way due to an illogical upgrade in stability. Despite all the chaos, my CAPS portfolio stayed steady. If the housing market news was worse, I really think I would have cleaned up today, but given the news, I'm happy not to lose ground. So how am I gonna react? I'm not changing a thing yet. When I drive down my street I still see more "for sale" signs then I ever saw before in my life. I know of at least 3 houses that are being foreclosed on and I know 2 more that are getting close to that point. I've seen on the news that in the Cleveland area, they are expecting a 2nd layer of foreclosure rates that will be even worse than the current ones. (Cleveland is already one of the worst cities when it comes to foreclosures) Apparently housing prices are so low that speculators are buying houses cheap enough to finance them like a "buy here pay here" car lot. The houses are in disrepair, and usally so much of a strain on the buyer to make them livable that the speculators are counting on them to start repairs and then later give up the house. I just saw an interview with some slimeball where he said "We are counting on getting this house back 3 or 4 times." When later asked the same slimeball said "We know we're selling people houses that they can't afford, but we're hoping that they add enough value to the homes to make them affordable to people that can buy them traditionally." The news station followed up by showing a bunch of houses that never should have been approved for sale. Leaking roofs, faulty electricity, bad plumbing. ect... As far as ABK and MBI, I've been on a roller coaster ride for a while and I still think that they suck. The S&P gave them a reprieve today and the bail out still hasn't been offically announced, but this blog just reinforced what I already know. [more]
If you guys do a majority of your trading after market close like I do, you may want to leave a few CAPs slots open. I just realized that in order to make a change in CAPS choices I have to wait until 20 mins after market open and a price is selected for the stock I'm selling in order to select the stock I'm buying. Since I work during market hours, it's not really feasible to go that route. Oh well live and learn. [more]
Ok my first goal was to max out the 200 pick limit for CAPS. (took me about a month) I'm more of a value investor and you won't see a whole ton of underperform picks on my list. From here on out, I intend to keep stay close to the 200 cap limit as I can and that should force me to scrutinize my additions a little more. (I'll have to remove a company that I like to add another one). I also hope to add more pitches to my picks, but I'm not making any promises.