TMFDeej (99.47)

Everybody likes a good stoning / The Electric Company / Bears running wild / Quick Hits

July 18, 2008 – Comments (2) | RELATED TICKERS: CC , SLB

Whew, what a couple of weeks.  TGIF.  Volatility like this has to be a trader’s dream.  We’re seeing huge companies up 20% one day and down 20% the next.  Most of us aren’t traders though, the Motley Fool tends to attract more long-term investors, I certainly am one.  Times like this when the market is going haywire and nothing seems to work are emotionally draining.  Despite the pain, the current turmoil can actually be good for you…sort of like getting a shot at the doctor is not fun, but healthy.

While burying one’s head in the sand and not watching is certainly preferable to panicking and selling everything, I have been trying to stare fear in the eye and reassess why I own every single stock in my portfolio.  I have been using this time to harvest gains…OK and some losses…on several of my “B” Tier stock picks and roll the proceeds into my A Tier picks and the ones that I believe present the best value right now.  I know that I should have probably only invested in the A list to begin with, but as anyone who can see by the constant 200 picks that I have active in my CAPS portfolio I tend to get excited about ideas.  There are some amazing values out there right now.  Tightening things up and concentrating my funds in a handful of best ideas is for the best.  So while times like these aren’t fun, they can actually be healthy in a weird way.

Focusing on trimming down my portfolio and adding to my best companies is certainly a lot more productive than what happened in Pakistan yesterday where investors literally stoned the country’s stock exchange after it fell for the fifteenth consecutive day...not that I'm not tempted to hurl a few rocks at the NYSE from time to time :).  Forget the new ban on short selling, the threat of getting stoned would definitely help prop up stocks.  (see article: Pakistani Investors Stone Exchange as Stocks Plunge).

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Two of the "A Tier" companies that I have been adding to my positions in are power companies.  I cannot talk about specific names because I have purchased shares of them within the past ten days, but I have blogged about my new found love for electric companies in the past (see post: Put a charge into your portfolio by playing this trend).  It gives me comfort to see that one of my favorite investors, Jim Jubak, is bullish on this sector as well.  Here’s what he wrote on the subject just this week: Get better returns with less risk?).

Speaking of electric companies, remember this show?  Old school baby.  Say is that Morgan Freeman in the middle of that picture?  Weird.

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 Given the near 90% shellacking that its stock has taken over the past year (falling from $14 all the way down to $2) it’s obvious that the figurative bears love Circuit City.  Apparently, real bears love the company as well.  The other day, a real one broke through the front window at a Colorado Springs location and shopped around for a while (see article: Bear Breaks into Colo. Springs Circuit City)  I wonder if he picked up a flat-screen TV for his den. 

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Quick Hits

-  Schlumberger Announces Second-Quarter 2008 Results: SLB beat analysts’ estimated by $0.03.  I’m looking forward to earnings season because the oil and gas sector companies that I have in my portfolio are going to crush it and they may finally get the respect that they deserve from Mr. Market.  SLB is currently up nearly 5% on the day.  Go, go, go.

-  Legg Mason to back Yahoo board slate:  Hooray.  I got the Budweiser merger wrong in CAPS, but it looks like I might end up getting my Yahoo! call right.  I'm only down 2 points in it right now and a major investor is standing behind Yank instead of Ichan.

-  Freddie Mac mulling $10 billion share offer:  Are they serious?!?!  Who on Earth would anyone want to buy equity in Freddie?  Bonds, perhaps, but stock...NO WAY. 

Deej

Long SLB