A Strategy for Making Sense of It All
The market hit a new high today and many of our stocks have hit new highs the past week. What does this mean?
We are in earnings season so it's really hard to take the day-to-day market fluctuations seriously. For example, oil prices softened today, knocking down our oil services/equipment stocks. We have had a decent rally as we roll into the season and that was mainly market makers placing their bets. Some profit taking will be expected as we roll along.
My primary concern is whether we will see a repeat of last year's sell in May and go away. Certainly the ominous rumblings of the housing meltdown and interest rate hikes make for disturbing potential. I will be re-introducing STOPs shortly to protect from such a drop.
Meanwhile, I can't help but ponder my investment strategy. I's pretty basic: do my best to assemble a team of All Stars. Like a baseball team manager, I want every one of my boys to be homerun sluggers but I accept that not all o fthem are. Some will hit slumps. Some will become unreliable and need to be released. That's the hard part: knowing when to make the trade.
Earnings season is like the playoffs. It's a chance to see my team perform and hopefully spring forward as much as 10%. It's a chance to find new recruits. Mostly I hope that my team has a lot of players that will have upside surprises.
Right now my biggest concern is with TRID, TIE, CTSH, & IMA. TRID & TIE should be trading much higher but the market just avoids them. Do we continue to accept the 1 year slump or trade them? CTSH is more a matter of future growth - I need an earnings cycle to get better visibility. IMA - I just hate that they overbid for Biosite. I hope they lose it.
Meanwhile, I am already considering other stocks. The trend is your friend
We are in earnings season so it's really hard to take the day-to-day market fluctuations seriously. For example, oil prices softened today, knocking down our oil services/equipment stocks. We have had a decent rally as we roll into the season and that was mainly market makers placing their bets. Some profit taking will be expected as we roll along.
My primary concern is whether we will see a repeat of last year's sell in May and go away. Certainly the ominous rumblings of the housing meltdown and interest rate hikes make for disturbing potential. I will be re-introducing STOPs shortly to protect from such a drop.
Meanwhile, I can't help but ponder my investment strategy. I's pretty basic: do my best to assemble a team of All Stars. Like a baseball team manager, I want every one of my boys to be homerun sluggers but I accept that not all o fthem are. Some will hit slumps. Some will become unreliable and need to be released. That's the hard part: knowing when to make the trade.
Earnings season is like the playoffs. It's a chance to see my team perform and hopefully spring forward as much as 10%. It's a chance to find new recruits. Mostly I hope that my team has a lot of players that will have upside surprises.
Right now my biggest concern is with TRID, TIE, CTSH, & IMA. TRID & TIE should be trading much higher but the market just avoids them. Do we continue to accept the 1 year slump or trade them? CTSH is more a matter of future growth - I need an earnings cycle to get better visibility. IMA - I just hate that they overbid for Biosite. I hope they lose it.
Meanwhile, I am already considering other stocks. The trend is your friend
posted by Andrew at
9:39 PM
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