Tactics Going Forward

If you followed my advice on December 23rd, you would have either:
1. Put a trailing 5% STOP on your positions
2. Put 5% of your portfolio into puts3.
3. Bought AAPL puts when it hit $200
(http://liverocket.blogspot.com/2007_12_23_archive.html)

Alternatively, you would have bought any of the puts I reccomended on Jan 6th


The ideal approach was to use a combined startegy of puts and trailing STOPs on the long positions. For LiveRocket, however that was just not possible because, as I stated previously:
1. I do not have the bandwidth to jump out and jump back in (not until February)
2. LiveRocket follows a long approach - no puts

I am hoping that most of the positions will recover over the next few months. MVL, for example, is already back. We did miss a prime opportunity to buy back in at a lower price (my favorite method of maximizing gains). However, I think all will be fine.

Now that earnings are being released and most are positive, the market is breathing easier. Note that companies with US exposure are suffering (HOG, for example) but global oriented companies are doing fine (IBM, CAT, JNPR). That is exactly what we expected.

In the next few weeks, I predict another see-saw:
1. Jan - Mid February - Slight rise in markets. A wave of good earnings coupled with the current oversold conditions will stabilize the markets and even move them up
2. Mid-February - Renewed doubts and concerns. More indications of US recession.

Do not get lulled into being bullish. You should close out short positions and re-open them in about 2 weeks.