Week 32 LiveRocket Performance - (-0.76%)

Week 32 (versus previous week)
Dow 1.13%
S&P -0.08%
NASDAQ -0.23%
LiveRocket -0.76%

YTD
Dow 2.78%
S&P 0.24%
NASDAQ -3.4%
LiveRocket 19.12%

Since Inception (Nov 4, 2005)
Dow 4.7%
S&P 2.6%
NASDAQ -1.8%
LiveRocket 30.46%

Despite a strong 2 day gain mid-week, the markets are still down. Five weeks of negativity have shaved 8%+ off the Dow and Nasdaq. The overselling peaked early in the week and we saw on Tuesday the beginning of money selectively returning to the market. The key word being selective.

We missed most of the crash because of our stop limits pushing us out of stocks and into cash. In retrospect, the mistake I made was getting into the market prematurely 2 weeks ago. I believed that the rebound had come. Instead it was a dead-cat bounce. It's not often one experiences a 4 week 10%+ drop in the DOW when the economy is strong and there are no real shocks (i.e. compared to the damage of Hurricane Katrina).

What continues to catch my attention is the chorus of voices from the Fed, all of them singing the song of more rate hikes to fight inflation. I think that the market has digested the worst case scenario (a 0.5% cumulative hike). As always, the smart money is rolling in and now is the time to begin placing bets on the right investments.

From a stock picking point of view, it is clear that the market is negative on technology (especially consumer gadgets like PCs), on housing and on infrastructure. Any earnings releases that are strongly positive will be treated as a last gasp before a slowdown.

I think the next few weeks will be dominated by 3 milestones: Fed meeting in late June, July 4th holiday, and the 2 earnings releases. Not a lot of buying pressure, but I think money managers are placing their bets as we speak.

I have seen resilience in a lot of stocks and am analyzing. I also think that a bunch of the stocks that comprised our portfolio are bargains. For example, off-shore oil rig companies (DO, ESV) are raising prices. That means a lot of upside.

We were stopped out of Zoran this week.
We are sitting on a cash position of $119,551.02. I do see selective investing next week. I may suggest playing the volatility and market softness by doing rapid trades (get in, lock in a gain, get out).

DIS - Flat for the week. Disney was hit by the lost court case where they have to pay $125M to Michael Ovitz. Disney was also downgraded on slower growth, especially at theme parks. At the same time, I see a lot of positives.
* TV - Advertisers are increasing the rates they pay to Disney.
* Digital Downloads - Disney has strongly embraced iTunes and is finding an enormous revenue source for existing entertainment shows. That's almost 100% pure profit.
* Movies - Cars, Pirates & Toy Story. Cars was not a new record setting Pixar movie but it depends on longevity. You can't beat movies for cheap entertainment.
* Theme Parks - Disney announced plans to consider a new theme park in Malaysia. They will get a boost in the stock just by moving forward.
* Increased Interest - Disney may benefit from a flight-to-quality as certain investors look for less volatile stocks