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I started the week planning to watch the my portfolio and increase my existing positions if any buying opportunities arose. As it happened, with the extreme volatility, a couple of stocks that I follow got down to buy points so I added two new positions: TESS, a wireless distributor (two buys) and CINF, an insurance company. They both recovered nicely today, giving me gains of 12.35% and 8.36% respectively.
I also added to my positon in OLN, (Metals, Winchester & Chlor-Alkali) when it was down about 8% from my first buy, and was rewarded with a 10.22% increase today.
I feel that the fear factor has been lumping all Financials together, dragging some of them down far more than their exposure to subprime would call for. As Friday progressed, the market started sorting things out, so that CINF and other Property & Casualty or Multiline Insurors were up while the Mortagage Insurance and Financial Guaranty Companies were down for the most part. I will hold my position in MBI, a Financial Guaranty Insuror, because I think they have done a good job underwriting their subprime exposures and they are going to have fewer losses than most investors expect.
At this point I have approximately 80% of my funds invested. I am happy to be showing a profit after putting that much money to work in such a volatile market. It is good to have cash on hand to take advantage of opportunites as they arise without agonizing over what to sell in order to make the next buy. With that in mind, I will continue to hold about 20% cash so I can have the freedom to respond aggressively as situations develop.
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