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TMFFlushDraw (93.42)

The Market Finally Comes Around



January 25, 2011 – Comments (0) | RELATED TICKERS: LVS , FSLR , SPWRA.DL

My investing moto is "buy short term, sell long term" meaning I want to buy on short term panics in stocks I don't want to sell until far into the future when my investing thesis plays out.

This strategy has also led to a revelation I made recently when reviewing my stock performance: I am rarely wrong long-term but rarely time the market correctly short-term, leading to some big short-term losses. 

Take my biggest win recently: I have been invested in Las Vegas Sands for more than three years until recently. I bought thinking that Macau was a phenomenal investment, Singapore would be a huge market and Las Vegas would at least hold its own. Originally I bought a few shares at $70, watched the stock go to $140, then down to $70 where I sold half my position for no gain. Then the tumble truly began when the recession hit and I added to my position at $17, $7, $4 and $2. I was sitting on huge losses but my thesis was still intact (if the company didn't go bankrupt). It turned out to be correct in the long term and I more than quadrupled my money after selling bit by bit and missing some of the run to the mid-50s. Correct long-term, terribly wrong short-term. 

That mantra is playing out again in solar stocks as we speak. I started buying solar stocks in 2009 after seeing how fast costs were falling and how long-term there is no way we can ignore this abundant power source. After all, more solar power hits the Mojave Desert (a tiny desert) than it would take to power the entire world. But again my timing was off and solar stocks languished into 2011. The fundamentals kept looking stronger and stronger but the stocks kept going lower and lower. I ended 2010 with three losing positions but the knowledge that I knew I would be right long term.

Well First Solar finally went into the black for me last week and the run continues as SunPower powers forward today. I'm expecting a lot from solar as we transition to cleaner power sources and I see 2011 as the year the market finally comes around. Hopefully this thesis is correct long-term as well.

Travis Hoium (TMFFlushDraw)  

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