Why we were stopped out, and Why I did what I did
The sudden pre-market stock crash alerted me. It was across the board, so I didn't see the cause and pattern at first.
Then it emerged
http://news.yahoo.com/s/ap/20060427/ap_on_bi_ge/china_economy_4
The US and Chinese economies are surging, as are Japan, China and to a certain extent India's. China's was recently said said to be running even hotter than expected. So they are trying to get back control by raising interest rates and by limiting coal mining.
A recent article in The Economist echoed a few similar points about China:
1. Loose monetary controls have allowed gross speculation by individuals and corporation. Housing has skyrocketed (sound familiar?).
2. Over construction particularly in steel - Steel is now in oversupply with more supply coming online. Coal is needed for steel.
Essentially, China has major industrial problems. It's banks are unprofessional and are hiding massive debts and bad loans. China knows that it must clean up, but local governments operate fairly independently. We'll see what effect this truly has.
Specifically targetting commodity, oil, and mining sectors, China hit our portfolio. But will these stocks really be affected?
ET - They just announced record results and are expanding to China. No reason for the drop. We were stopped out at $25 and got back in at $24.7. We earned an extra $0.30 per share or ~1%
GRP - Ok, they just announced earthshattering results. Gas is one area where demand is not going to slow down. A slong as oil is above $40, there will be exploration. Stopped out at $49, got back in at $48.8. Earned an extra $0.20 per share.
JLG - Earthmoving equipment. CAT just released earnings of mammoth proportions. JLG is sold out for the year and looking to increase manufacturing. China's move could affect them, except China is shutting down the smaller, more dangerous coal mining sites. Stopped out at $27.5 and back in at $26.8. Earned an extra $0.70 per share
JOYG - We are exposed here. Coal mining uses JOYG equipment. But I think that we are ok getting back in. JOYG equipment is used in all types of mining. I thought we might see a rebound, but there wasn't one. Stopped at $64, back in at $64.85. Ended at ~$63
MRVL/TRID - Damn. Both bounced up before I could make a move. After announcing record results, TRID fell 8%. They didn't even enjoy a pre-earnings run up. That's bullshit. This company is printing money. They have no known threats, and have incredible design wins for the holiday season.
WIRE - I wanted to take advantage of a pullback on a top performing stock. We will be patient and dump shortly. In at $39.5.
TIE - No event but down because of China. But their business is China proof. China will buy planes. No doubt about it.
Then it emerged
http://news.yahoo.com/s/ap/20060427/ap_on_bi_ge/china_economy_4
The US and Chinese economies are surging, as are Japan, China and to a certain extent India's. China's was recently said said to be running even hotter than expected. So they are trying to get back control by raising interest rates and by limiting coal mining.
A recent article in The Economist echoed a few similar points about China:
1. Loose monetary controls have allowed gross speculation by individuals and corporation. Housing has skyrocketed (sound familiar?).
2. Over construction particularly in steel - Steel is now in oversupply with more supply coming online. Coal is needed for steel.
Essentially, China has major industrial problems. It's banks are unprofessional and are hiding massive debts and bad loans. China knows that it must clean up, but local governments operate fairly independently. We'll see what effect this truly has.
Specifically targetting commodity, oil, and mining sectors, China hit our portfolio. But will these stocks really be affected?
ET - They just announced record results and are expanding to China. No reason for the drop. We were stopped out at $25 and got back in at $24.7. We earned an extra $0.30 per share or ~1%
GRP - Ok, they just announced earthshattering results. Gas is one area where demand is not going to slow down. A slong as oil is above $40, there will be exploration. Stopped out at $49, got back in at $48.8. Earned an extra $0.20 per share.
JLG - Earthmoving equipment. CAT just released earnings of mammoth proportions. JLG is sold out for the year and looking to increase manufacturing. China's move could affect them, except China is shutting down the smaller, more dangerous coal mining sites. Stopped out at $27.5 and back in at $26.8. Earned an extra $0.70 per share
JOYG - We are exposed here. Coal mining uses JOYG equipment. But I think that we are ok getting back in. JOYG equipment is used in all types of mining. I thought we might see a rebound, but there wasn't one. Stopped at $64, back in at $64.85. Ended at ~$63
MRVL/TRID - Damn. Both bounced up before I could make a move. After announcing record results, TRID fell 8%. They didn't even enjoy a pre-earnings run up. That's bullshit. This company is printing money. They have no known threats, and have incredible design wins for the holiday season.
WIRE - I wanted to take advantage of a pullback on a top performing stock. We will be patient and dump shortly. In at $39.5.
TIE - No event but down because of China. But their business is China proof. China will buy planes. No doubt about it.
posted by Andrew at
8:56 PM
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