THIS DOW 12,000/S&P 1,300 THING
Never underestimate the power of round numbers on market averages and individual stocks. This is lesson I forgot coming into this week, as I wasn't expecting the type of upmove we have seen here recently.
Round numbers act as a flashing billboard...it's the single best advertisement for the markets there is. It serves as means of getting sideline money to act. News reports that typically give 15 seconds to the market, devote a 3 minute segment to the markets and back it up with carefully selected fundamental facts that contradict what was said about the economy in an earlier segment. It's journalistic curve-fitting at its best.
As all of you who have been reading the postings on this blog know, last year was magnificent on the upside with a greater than triple digit percentage gain for our accounts. This year, however, has started off with a thud, as our names have been slowly sliding back to Earth following the moon shot they had in the last six months of 2010.
I added to our oil/gas spin-off play today at what I think will be seen as an absurdly attractive prices in 12 months. I am also looking at adding to our subprime/consumer credit restructuring play, as it has been very strong since we initiated the position in late December 2010.
We have almost liquidated our technology bankruptcy reorg play completely after it has seen a gain of 400% since we first initiated the position almost exactly one year ago. Have a very small portion remaining. Once we fully liquidate the position, I will be describing the investment, thoughts behind it and analysis completely on this website. I feel it will be very educational for even the most experienced of investors.
We are also getting set to release a new pick to all members in the coming days. I like to describe it as the safest 200% gain you can potentially have in a stock with a market cap under $50 million. It's heavily insider owned, has an activist angle at work and is tremendously undervalued.
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That's all for now. Hope your day was a peaceful one.
