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Liquidkick
H2O
Registered: 05/03/02
Posts: 2,635
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I am gonna bleed tomorrow...
#7884509 - 01/15/08 05:00 PM (16 years, 17 days ago) |
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I already see it. My oil is dropping! My seeds are dropping! My tech is dropping! Pharmaceuticals, chemicals and tobacco floating but still red!
SIGH, i have big positions in OIL and TECH.
EVERYTHING IS RED!
Here comes the blood. I have no more money and i can't short or get puts!
SIGH.
Do i sell and take a hit? SIGH...
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Visionary Tools



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Re: I am gonna bleed tomorrow... [Re: Liquidkick]
#7884758 - 01/15/08 05:41 PM (16 years, 17 days ago) |
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Nahh, wait untill the market bottoms out.
Or find for yourself what Donald Trump has said on the oncoming recession.
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geokills
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Re: I am gonna bleed tomorrow... [Re: Liquidkick]
#7884907 - 01/15/08 06:12 PM (16 years, 17 days ago) |
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> Do i sell and take a hit?
NO! You Cannot Afford to Panic!
I have a note sitting in front of me, leaning against the very monitor I'm typing on now... it looks something like this:

If there's one thing that has consistently fucked up my trading strategy, it is PANIC! I tell myself time and time again not to panic, and yet I can still empathize and understand exactly where you are coming from because I found myself making this mistake again as recently as last week! It is very hard to watch your assets vaporize before your eyes, especially when the market is as confused and rapidly changing directions as it is right now. Even so, you must remember the key principle here, that stocks on average are the highest yielding asset class on a long term basis. Granted, it isn't the most comforting thought when your portfolio is painted blood red and continuing to hemmorage, but it would be reckless to start selling off high quality assets after you've already rode out a very strong downtrend.
Technology will, in all odds, be down tomorrow on account of Intel disappointing on its quarterly report after the bell today. However, overall technology has been vastly oversold, and while there probably won't be any nearterm catalysts in the first half of 2008 to get technology moving strongly to the upside, that day will eventually come. In the short-term, we should even see a little bounce or "relief rally" because the Nasdaq has really been pulled down hard, which always leads to at least some measure of a short-term bounce - just remember to lighten up when your stocks are going up. Too often I get over enthusiastic on up days and end up blinding myself to the downside that lurks around the corner. It is important to sell small pieces of your positions on up days, and buy them back on down days - particularly in a market as trecherous as this one!
The whole day today was wretched, and the after hours action just added insult to injury as people indiscriminantly sold off the good with the bad.
To address a couple of your specific concerns... while oil is in a short term downtrend, I would highly doubt that it's going to fall by much or for long. If you take a long-term outlook, oil should remain at (and most likely well above) $90 a barrell for the foreseeable future, and in all odds will only continue to rise over time. Agriculture has had a monster run over 2007 and has remained relatively unscathed from the recent selling pressure, so you may want to lighten up on that position but I surely don't advocate selling it all as it has been proving its resistance to this terrible tape! There is a worldwide food shortage and for the long-term, agriculture should continue to run very positively. You could probably lighten up on pharmaceuticals, as there really doesn't seem to be much great news "in the pipe" (coming in the future) in terms of new drugs. If you own traditional pharma stocks like Merck or Pfizer, I would consider rotating out of those and putting your money into healthcare cost containment, which should benefit if the economy continues to struggle, as saving money will be priority number 1 for corporations and health services providers. Healthcare cost containment includes companies such as Medco Health Services (MHS) and CVS Caremark (CVS). Disclosure: I own CVS and MON.
Now I don't know exactly what stocks you're currently invested in, so please take my advice to sell or rotate with caution. But I do know how bad it is out there, and it really is important not to panic, and to also protect yourself as much as you can. I took a loss on paper of $2000 today, & have lost over 10% since the year began !
It hasn't been pretty by a long stretch, and it probably won't begin to GET pretty anytime soon. But my gut tells me we've weathered a big part of the storm here.
There are a few good names out there that are very cheap right now, without much cause. Consider AT&T, which has fallen almost 10% since last week when the CEO made a comment about consumer softness, while noting that their wireless business is very strong, and that they will make their numbers when they report earnings on 24th of this month (next week). His statement was almost as good as a guarantee that AT&T will meet their quarter, and yet people freaked out about his comments stating the obvious about the weak consumer, and the stock is discounted 10%. Combine this with the fact that AT&T offers a 4% annual dividend, and should be raising their dividend soon, and you have a great buying opportunity. Disclosure: I own AT&T (and plan to buy more this week ahead of the quarter).
Likewise, Transocean (RIG) has been beaten down a bit and it may be a good time to start picking away at this name as it is the king of oil drillers; and the only driller that has the rigs capable of getting to deepwater oil reserves, which is where many of the new finds are located. It takes years to get new rigs built, so they should hold their dominant position through 2010, and oil prices should rise, which will increase the rate at which they lease their rigs. Great visibility too, as they book contracts ahead of time, so it is easy to get a feel for what their future prospects are. Visibility is very important in a market as uncertain and confused as this one. However, as a word of caution, buy it slowly over time, as oil could continue to fall in the short-term. Disclosure: I own RIG.
This is a bear market, the trend is down, it's not going to be easy to make money. Right now you need to think about capital preservation, not capital appreciation. So look for stable growers trading at attractive valuations, preferably with a safe dividend to help cushion the downside risk. Try to stay away from the high growth "momentum" stocks, stocks with high PE multiples. Even though some of these companies should do well, they face strong headwinds in a market that is full of people looking for anything to sell. Typically when people are jonsing to raise cash, they'll sell their most expensive / highest multiple stocks first. So please be very careful with those!
It is also prudent to keep cash on hand at all times. 5 - 10% would be the absolute minimum amount of cash I'll have on hand at any given time, and preferably around 25 - 30%, especially when the market is as bad as it is (I'm currently at 26% cash).
Just remember, for crying out loud don't go and sell out of all your positions! We should be nearing a short-term bottom here, the market is oversold and should bounce (maybe even tomorrow afternoon). Not to say it won't continue lower in the intermediate run, but remember not to sell all at once. Lighten up a bit tomorrow afternoon or later in the week if we get a bounce. Don't sell all at once!!
Good luck, we could use it!
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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Liquidkick
H2O
Registered: 05/03/02
Posts: 2,635
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Re: I am gonna bleed tomorrow... [Re: geokills]
#7885479 - 01/15/08 07:54 PM (16 years, 17 days ago) |
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I am all out of cash. It went poof today.
Chilling out for now, but there is a week of bank earnings coming up which doesn't look good. More like hell.
I am going to slowly scale back here and get some cash.
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5150
phantom

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Re: I am gonna bleed tomorrow... [Re: Liquidkick]
#7885655 - 01/15/08 08:23 PM (16 years, 17 days ago) |
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i wouldnt sell anything concerning oil, they will come back up u ever read any
http://www.amazon.com/Investment-Biker-Around-World-Rogers/dp/0812968719
-------------------- "the way of the warrior is the resolute acceptance of death" Miyamoto Musashi
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Liquidkick
H2O
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Re: I am gonna bleed tomorrow... [Re: 5150]
#7886930 - 01/16/08 12:51 AM (16 years, 16 days ago) |
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No i haven't read that book, but will take a look at it when i get a chance.
I probably won't sell any of the oil. I might sell 1 or 2 stocks to get some cash. Who knows. I want to cry sometimes.
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geokills
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Re: I am gonna bleed tomorrow... [Re: Liquidkick]
#7887786 - 01/16/08 10:31 AM (16 years, 16 days ago) |
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I feel your pain. This market is disgustingly difficult. My positions in Monsanto (MON) and Freeport-McMoran (FCX) were down some 10% earlier this morning. Apple (APPL) has been getting crushed all month, now 20% off of its recent highs. This really is painful! I'm not giving up, but it sure is disheartening when over half of your gains for the entire last year go up in smoke in the first two weeks of the new year!
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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Liquidkick
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Re: I am gonna bleed tomorrow... [Re: geokills]
#7888390 - 01/16/08 02:15 PM (16 years, 16 days ago) |
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Oh god, i have a position in MON.
I was like oh shit! My money!!! WOW. I am hurting here. Past 2 days i have taken huge hits.
What do you think? MON going back up?
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geokills
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Re: I am gonna bleed tomorrow... [Re: Liquidkick]
#7888496 - 01/16/08 02:50 PM (16 years, 16 days ago) |
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Yes, I think it will go up in the long run. Agriculture should continue to be strong, but in the current environment, almost everything is getting hit. If you can't take the pain during the interim, well that's your choice to make. Just remember that Monsanto is only 12% off of its highs - pretty light compared to other companies like Apple down 22% from their high, and especially financials, many of which have been cut in half. Therefore, if the aggregate market pressure continues, it is conceivable that Monsanto has farther to fall. That said, I am holding my position, and believe there is a good chance it will fall to $100 / share (another 10% lower from where it is now). If it does fall back to that level, I will buy more to lower my cost basis. If it doesn't, at least I still have some on the table.
This is not an easy market by a long stretch. I am amazed by the violence with which high quality names are being sold off alongside low quality names. Options expiration this week will probably lend even more pressure. I'm down another $1200 today. This is the nature of the market, can you take it? I'm holding on, but just barely!
If we have a strong up day, I aim to take about 5% off the table to help bring my cash position above 30%. It is very important to sell something on up days, so you can buy back when the market gets crushed soon thereafter. That's how things are stacking up right now, and unfortunately, I haven't been selling enough on the up days - but hell if I'm going to sell on the down days!
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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geokills
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Re: I am gonna bleed tomorrow... [Re: geokills]
#7888715 - 01/16/08 03:39 PM (16 years, 16 days ago) |
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Monsanto in after hours trading is now another 4% lower, to $108.50 a share. As to be expected with a high multiple stock that has had an impressive run over the past many months, people are booking profits and taking the name down. It's not going to be good for short-term upside, but if you can treat it as an investment with a long-term outlook, I think it is worth holding onto. That said, I noted above that I will start buying it back if and when it hits $100/share. Given how terrible the market is, I'm going to buy very slowly, so that I'll still have room to buy even more if it hits $90/share.
Be very careful out there. Many high multiple stocks (stocks with a PE ratio above 20) are just getting killed!
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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Liquidkick
H2O
Registered: 05/03/02
Posts: 2,635
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Re: I am gonna bleed tomorrow... [Re: geokills]
#7888935 - 01/16/08 04:24 PM (16 years, 16 days ago) |
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Yeah I saw the after hours it hurts. I need a rebound tomorrow and just sell it off. I don't have much on the table.
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geokills
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Re: I am gonna bleed tomorrow... [Re: Liquidkick]
#7889841 - 01/16/08 07:27 PM (16 years, 16 days ago) |
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Liquidkick
H2O
Registered: 05/03/02
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Re: I am gonna bleed tomorrow... [Re: geokills]
#7890713 - 01/16/08 10:14 PM (16 years, 16 days ago) |
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Yeah i looked at the chart and i kinda know where i am on the chart. LOL.
I am gonna sell all my PBR, MON tomorrow. KEEP HAL around and PZE.
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geokills
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Re: I am gonna bleed tomorrow... [Re: Liquidkick]
#7890870 - 01/16/08 10:39 PM (16 years, 16 days ago) |
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You're in PZE too? 
These coincidences are a bit eerie!
PZE does carry an attractive valuation, and with the South American economies becomming increasingly capitalistic, provided the government doesn't do something crazy, PZE should have a lot of upside ahead of it. I have a small position in the stock with a basis about 2% below where it's trading now, and am hoping that it will fall a little bit so that I can pick up more.
My current positions are (from smallest to largest):- Petrobras Energia - PZE - Oil
- Monsanto - MON - Agriculture
- Freeport McMoran - FCX - Commodity Copper/Gold
- St. Jude Meical - STJ - Healthcare
- Altria - MO - Tobacco
- McDonalds - MCD - Low Cost Casual Dining
- Proctor & Gamble - PG - Consumer Staples
- CVS Caremark - CVS - Drugstore Retail and Pharmacy Benefit Management (the latter is why I own it)
- NYSE Euronext - NYX - Worldwide exchange
- Transocean - RIG - Oil driller / Rig provider
- AT&T - T - Telecommunications/Wireless
- Apple - APPL - Consumer Technology
- Google - GOOG - Advertising Technology
I'm a little bloated right now, in that I have more names than I'd prefer, as it takes a lot of time to keep up with them all! Nevertheless, I believe in the long-term fundamentals of each and every one. Monsanto and Freeport McMoran probably have the strongest headwinds working against them right now, so I am thankful that they are among my smallest positions. Apple and Google have been beaten to all hell, but they are strong earners and I am still well above my basis on both names, so I'm waiting until they report their quarters (on the 21st and 31st respectively) before taking any action.
If we can manage a bounce this week, I may lighten up on my Monsanto and Freeport McMoran positions, even though I truly believe that they are well positioned for the long-term. If the world economy slows as much or more than people are anticipating, these names will suffer dearly and I'm not sure if I want to deal with that pain right now. On the flip side, Freeport is insanely cheap on a valuation basis. Thinking about swapping out of Monsanto for Coca Cola (KO) or to add to my position in Altria (MO), which will be much safer in a deteriorating market environment.
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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Liquidkick
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Re: I am gonna bleed tomorrow... [Re: geokills]
#7891112 - 01/16/08 11:37 PM (16 years, 16 days ago) |
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Crazy.
I have AAPL, BMY, DOW, HAL, MO, MON, PBR, PZE.
did some spread sheet stuff, and all of my commodities are down .07-.11. I might even dump HAL, who knows.
I am waiting for earnings on AAPL to dump that. BMY, DOW, MO, and PZE are staying on for now.
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geokills
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Re: I am gonna bleed tomorrow... [Re: Liquidkick]
#7891364 - 01/17/08 12:28 AM (16 years, 15 days ago) |
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I wouldn't be so quick to sell all of your Apple as it has been hit hard without much cause other than the fact that it is a high dollar, high PE stock... but with solid earnings growth and killer innovation, it is still very appealing. This is one name I think I'll be trading around a core position in for long while, along with the likes of AT&T and Transocean. I've even considering buying more of these three, right here.
Don't let yourself get shaken out man! If you follow the herd, you'll never be able to beat the market. Granted it may be a rough ride to battle a turbulent market, but just think of the huge upside that sets in as we emerge from a correction or a recession. You want to keep yourself in the game, 'cause those upside pops can come at any time. Though it's a little dicey here with the S&P breaking through its "tripple bottom", the markets are already quite oversold and don't forget that we're likely to get a 0.25 - 0.5 %bp rate cut out of the Federal Reserve at the end of the month.
Not trying to be overly enthusiastic here, I am no doubt concerned and cautious. I just don't want to see you throwing the good out with the not-so-good, that's all!
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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Liquidkick
H2O
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Re: I am gonna bleed tomorrow... [Re: geokills]
#7891756 - 01/17/08 04:16 AM (16 years, 15 days ago) |
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Ok, i am going to chill out and watch the market on a hunch. I believe MON will rally tomorrow and a few days after. This is from looking at the volume that was traded yesterday. There was a large volume of buying on this day. I am going to see if i can recognize what the smart money is doing.
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Liquidkick
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Re: I am gonna bleed tomorrow... [Re: geokills]
#7892898 - 01/17/08 12:46 PM (16 years, 15 days ago) |
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Something is going on with MON.
Down another 10 bucks. Seems like someone wants to keep MON down.
Is there a way to chart the Futures?
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geokills
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Re: I am gonna bleed tomorrow... [Re: Liquidkick]
#7893021 - 01/17/08 01:14 PM (16 years, 15 days ago) |
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What's going on is that Agriculture stocks in aggregate have held up extraordinarily well until this point. They are very highly valued, and are essentially priced for perfection in the short-term. Unfortunately, with the general concensus being that we are in a slowing economy, all commodity related stocks are getting hit, and hit hard. I'm not much of a chartist, so I don't know what to tell you about that.
I sold out of my Monsanto position this morning, to take advantage of AT&T being down, which currently yields over 4.2% annually, with the stock 10% off its highs, and an in-line quarter on the way along with an expected increase in the dividend during the early part of this year. You have to be defensive and invest in conservative names here. High multiple growth stocks just won't cut it when the economy is slowing and even worse when it faces potential contraction.
As I noted in my previous posts, there is little if any short-term upside in the commodity plays. If you can't take the pain on the way down, you should move your money into more conservative plays - companies that offer consistency with dividend yields and fair or low valuations! I am however, still holding my Freeport McMoran, as it trades with a PE of 9, and while it could fall to $65 at its worst (currently at $82), it should come back rip-roarin' as soon as the economy stabilizes. I will also ride Transocean (RIG) through this storm, likely for many years to come.
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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Liquidkick
H2O
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Re: I am gonna bleed tomorrow... [Re: geokills]
#7893279 - 01/17/08 02:31 PM (16 years, 15 days ago) |
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I now only have positions in AAPL and PZE.
I exited everything else.
I really believe with the economy and such, the big money players or "smart money" are screwing with the markets. They need to make money all the time so they are going to move volume based on their positions to cash in on the short. Then at the bottom, they are going to use massive volume to take stock and move it back up. It's all about the hedge funds.
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