Monday, October 20, 2008

I've Been Wrong!

I'm back from vacation. Just "enjoyed" last two weeks.

What did I do wrong? I mean, I did some things right, but rights will take care of themselves.

Didn't sell anything before going on vacation. Gross error. Cost me a lot. Didn't leave any buy orders for insanely low prices on some of my stocks. Cost me as well.

What to do now?

First of all, I'm selling Ebay and Red Hat. I don't care about the price anymore, those companies don't have much growth potential in this environment. Ebay's quarter was so-so, outlook is just horrible. Meg Whitman was a very good CEO, with her retirement this company doesn't have any direction. Decision to draw on credit line to finance next takeover just makes my decision easier. I prefer companies without debt right now. Red Hat has OK business, but growth is slow and investors doesn't seem to care about it.

Second, I'm not buying into this rally. If it goes way higher, I'm selling something else. I don't know if we escaped Great Depression v2.0, but recession is still coming and I think that October lows will be retested. Then it would be time to buy. Carefully, in stages, in small increments.

Oil is tricky. I didn't think it could go that low that fast. It overshot my price target, 90, by a wide margin. Now it can go any direction. But long term outlook should be still down. Other commodities are simpler, commodities don't go up in recessions. is a special case in my portfolio. I'm thinking of buying more. It's way too low, it can't be right. Of course, I can be wrong.

Full disclosure: at the time of publication author had long positions in RHT, EBAY and TSCM and no positions in other stocks mentioned. Positions can change any time.

Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.

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