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austinhippie (70.80)

Recent sells and new buys



May 18, 2008 – Comments (0) | RELATED TICKERS: MWA , DAVE

Well, I invested in ACAS, AINV, BAC, BWLD,CROX, PNRA, MIDD,MVC,LOOP, MVC, WLT, MWA/B, PRAA. I recently sold ACAS, AINV, BAC, CROX, PNRA and WLT. And frankly I am just waiting for the dividend to pay out and give it a couple days before exiting from MWA/B at a substantial loss. But I can put those funds into a couple of other opportunities that are likely to do profoundly better than MWA. MWA is in a market niche where it will eventually do well, but I have a hard and fast rule about companies with PE ratios in excess of 50. Most companies that I buy have PEs less than 10 and for agressive growth I am willing to go up to close to 20, but that is it. I have just opened positions in DAVE and HANS and added to MIDD. I am wanting to add to my holdings in DAVE and PRAA. They both look great, with DAVE being a little higher on my list.

But really long term and not at all short term, once I acquire more shares of DAVE and PRAA, I would like to build up my shares in UNH and look for a good entry point for WFMI. I made loads off of both of those last year by buying at the nadir in the summer and selling mid-fall at their heights. But I feel so let down when I let go of a stock just because it has increased in value by 15% to 30%. I don't allow myself to regret any buy or any sell. Because I know that I am learning and that I will remember all of these experiences in future. But it is kind of sad when you get to know a company and believe in its story to the point where it succeeds and then you have to let it go because it has done well.

I have also recently decided because of my crazy success with CROX (25% overnight) that I really don't like short term ownership. Even though so many opportunities like it readily abound, the volatility, even though it is upward, is no less disconcerting than a precipitous drop of a similar caliber.

I ditched BAC because I think there is worse to come, especially with Bernake (sardonically paraphrasing) saying out loud that it might be a great idea for the large institutional banks to cut their dividends. I think they just might take him up on it. If they do so, I will likely buy back in. It would make the banks much more robust if they chose to do that and the drop in the share price we would witness at such an event would make an extremely compelling buy point. But it is too much risk for me now. How unexpected it is that holding a large portion of my tax deferred holdings in a thinly traded small cap gives me dramatically greater comfort than holding one of the world's largest and best run banks. But that's how it is. In a couple years, when we all ride the bull back up, the difference will no doubt be stark.

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