Double Journey

I decided to post a page that includes all my current holdings in my retail account.  You will notice that most of these I have covered at one time or another in my blog post.  I thought I would consolidate it on one page and keep it up to date so that people could get a sense of what I own and why.

People say all sorts of things.  But if you really want to know what a man is thinking than you want to follow where he puts his money.   I read blogs all the time where people say they have great ideas but they don’t actually do anything that they write about.  That is not the case with this blog.  I put my money, my actual money, behind what I write.  So if you ever want to know if I actually did what I said I was going to do, just check out the page to see if I updated my holdings.  You can now hold me accountable to practice what I preach.

Over the past several weeks, I have been looking to take some positions.  While I don’t think the market is going to turn around and take off anytime soon, I am trying to take a few positions right now.  I do not want to try and pick the bottom, so I’ve decided to just try and take a few positions here and there over the next several months.  I have a very large cash position and I want to be well position if this market ever turns around.

So I am deploying some of my cash right now and I’m trying to be smart about it.  Things I am buying right now are for the most part, long term holds which I do not plan on getting in and out of anytime soon.  I’ve taken three positions.  Some of them I think are relatively conservative in this market, one of them is going to sound crazy.

• Health Care spider (XLV) - This is an ETF.  I actually picked this one slightly due to my fianceé saying she thought I should get into some healthcare stocks.  I had a hard time picking a winner in this space.  I had considered Johnson and Johnson or a Pharma like Pfeizer, but decided to just buy the basket of stocks.  The reasoning is simple here.  Not only do I think this sector will continue to fare well in the down economy, but I actually think there is some huge growth opportunities in the next few years.  The U.S. is aging.  You cannot fight demographics.
• Biotech ETF (IBB) - This is another ETF.  This ETF actually has  many of the same holdings as the other ETF (Gilead and Amgen for example) which means this is an undiversified pick.  This is OK if you know what you are doing and it does not represent an unusual amount of your portfolio, which these holdings do not.  Anyway, the same logic applies but with a twist.  This sector will continue to see consolidation over the next few years.  Many of the smaller players are going to get snapped up and the winners are going to become very big players.  On this one, I struggled between picking Gilead or Celgene as individual stocks rather than the ETF, but decided to just go the basket approach.
• Morgan Stanley (MS)  - This one might seem like the oddest pick given how I feel about the economy, the housing sector, and the financial sector.  But like I said, I am not looking to bottom pick.  As I have said over and over in this blog, the government is making it EXTREMELY profitable to be a bank in the future.  While there is certainly cause for concern, the banks that come out of this mess are going to make lots of money.  Morgan Stanley is going to survive.  They have already taken the very painful step of writing down their assets and deleveraging.  So I want to start getting into banks.  Not just any banks, the right banks.  These stocks may easily triple over the next few years and the winners fall aside, and the winners start reaping the benefits.  Many of which are on all our backs.  I thought about going with Goldman on this one, but in the end decided Morgan was the better play right now.

I was actually looking to buy a few more things today, before the market turned around.  But the government announced a plan to help out borrowers, and the market reacted positively to the news erasing earlier losses.  I really really wish the government would just shut up and stop changing the rules.  These wild swings in the market are making it hard on me, and everyone else, to be able to make any rational choices.  They are distorting behavior at every turn causing people to rethink decisions or act in ways they might not normally act.  I was about to do the very thing they are trying to get people to do.  They want people to start taking some risk and get back confidence in the outlook.  But when prices move wildly like they have been, it makes it impossible for me to get any sort of comfort level.

Only a quick post.  This is a very very busy week for me, so I doubt I will write much this week other than to make quick post on my current thinking.

Right now, I’ve been waiting for the pullback I was sure was going to happen.  I think we have probably reached a bottom a week ago.  However, the market bounced hard back up, and I didn’t think it was the right time to buy either.  But now that the market pulled back a little bit, I will probably look to buy tomorrow so long as the market doesn’t do anything nuts tomorrow.

If I buy, I will buy Novartis and Diageo.   I want to be in the drug and consumer staple large cap space right now.  Things that should survive even in a down economy.   To hedge, I will short the S&P even more than I currently am.

GameStop (GME) is set to announce guidance tomorrow. The stock has been killed the last few days on relatively no news. It has been down with the rest of the market as people are fleeing almost anything retail and connected to the consumer. However, I strongly believe that GameStop had a fantastic holiday and their guidance will look good. This should provide great stock price movement tomorrow. Be warned, if Gamestop comes out with bad news, this stock is going to come down. I just think you have more upside than downside at this point. If I can get in before the announcement, which is doubtful considering when I get up in the morning, I’ll look at getting in. It closed at $55.11 today, and I think you might have $7 or $8 of upside, maybe $4 of downside right here.

Today, it was announced that Howard Schulz would retake the helm as CEO of Starbucks.

The stock is on a free fall for the last year.  Just take a look at the chart

See how the chart moves in almost a straight line down to the right?  This is a VERY UGLY chart.  Yes, it is Janet Reno ugly.  But I think the trend is over.  There is no technical reason that it should be, at least not yet, but I think that Schulz taking over now puts a bottom in the stock.  I hate calling bottoms, but in this case I would.  The stock should open up significantly, it is above $20 in afterhours trading.  I wouldn’t get in at the bell, the stock will pull back in the morning, but I would watch the stock carefully over the next day or two.  If it can put a few good days together, than this sets up nicely for a good trade.

Only a quick post for now. Will elaborate later tonight. Just got back from Seattle and completed my move. Moving is hard. I don’t even have that much stuff, I had the movers pack my stuff, and I still feel pretty wiped out from the whole experience.

One stock I think I may do for 2008 is Polycom, the makers of conferencing technology. I really think this is a great growth sector, and the stock looks kind of cheap now. Don’t know if it is the right dime to buy right now, it’s been on a downward trend as of late, but I like the growth story. Will do some research later tonight and write it up.

are a few great stocks. I’ve started my wish list where I will put all the stocks that I’m actually interested in buying. I might buy one out of ten stocks, but it will give you an idea of what I’m thinking. I’ll update it regularly so check on it often. One of my goals this holiday was to figure out what stocks I was going to buy for this journey. Thus far, I haven’t identified any, and have only listed some good long term plays. I’ll continue to plow through some ideas that I have and hopefully come up with a good play for tomorrow or later this week.

Hope everyone is having a good holiday. If you want to get me a gift I really need some short term trade ideas.