whateverworks

Between Seasons

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Although I enjoy blogging it is nice to take a breather every now and then; therefore I decided that between contests I'd take the entire month of January off. Unfortunately the stock market remained just too "interesting"; so I ended up working as hard as ever to keep my Marketocracy funds from disintegrating.

MMC Trades

In my Magic Micro Caps fund (started in 2005) I sold a couple of "old friends". In spite of a recent upsurge, Universal Stainless (USAP) started falling again. My policy is to sell a stock if the price falls lower than it was 12 months ago (if I've held it longer than a year). USAP hit that point. I sold it, even though I'd made money on it previously. In a similar move I sold Silverleaf Reseorts (SVLF). In addition to the fact that it's down a bit over the last year, I don't anticipate it doing well during a recession.

I bought more Twin Disc (TWIN), Mesa Laboratories (MLAB), Natural Gas Services Group (NGS) and Northern Technolgies International (NTI).

It was goodbye to Spectrum Control (SPEC) when its stock plunged due to weak 4th quarter sales.

When Pope Resources (POPEZ) started to plummet I sold it fast, though not fast enough to prevent a loss. I should have forseen that this would happen even though it had been holding even during the last, few, difficult months. The company manages timber resources and real estate. Sooner or later the timber was bound to be negatively affected by a drop in home construction.

Now, with the microcaps, my biggest problem is finding stocks to buy. Microcaps are always volatile but in a bear market they do especially badly so that even good companies can sink past recovery. The MMC fund is down 12.99% so far this year.

Strategy Lab Trades

With the mid- and large- size Strategy Lab companies I can still have the opposite problem -- narrowing down to the ultimate winners. I'm confining myself to fields like biotech, health and pharmaceuticals where some stocks continue to rise.

Needing cash to invest in companies whose stocks are rising now, I sold my worst performers, VSE Corp. (VSEC) (though it is still in the microcap fund) and Quintana Maritime (QMAR) plus half of Freeport-McMoran (FCX)

I bought UltraShort Technology (REW) plus a tiny bit of $1,500 Claymore/BNY BRIC ETF (EEB), mainly to keep an eye on it. This once more puts me close to the maximum amount of ETFs allowed for compliance (25%).

Due to bad news on the legal front, I sold Apollo (APOL), though it had not crashed -- yet. To replace it I couldn't make up my mind between competitors DeVry (DV) and Strayer (STRA). So I bought them both. The rule that educational companies can do well in a recession is holding true so far.

I sold iShares FTSE/Xinhua China 25 Index (FXI) and again bought UltraShort FTSE/Xinhua China 25 Proshare (FXP). In the fall I'd gone from FXI to FXP, then back to FXI again. At one point I held them both! Someone who really knows how to time the markets should do very nicely just trading these 2 ETFs back and forth. Unfortunately that's not me.

So far in 2008 my Strategy Lab fund, down 7.98%, is doing slightly better than the S&P 500, Dow and NASDAQ. However I have no idea where it stands in relation to the other long-term contestants because the Website chart is also taking the month of January off while the Marketocracy and InvestorPlace technicians work like crazy preparing the next round and making improvements.

Topping my wish list for enhancement is inclusion of the huge number of foreign companies traded on the Pink Sheets, or at least those in the "OTCQX" and "Current Information" tiers. Almost all the ADRs are in those tiers, anyway.

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