Retiring Early

Thursday, March 08, 2007

Watching like a hawk

As you all know, I've been spending a lot of time watching the markets and waiting patiently to deploy some of my cash on the sidelines. I've also been very busy at my day job and with my moonlighting effort (more on that in another post). Finally, home projects have sopped up every last remaining bit of time. I just quite simply haven't had a lot of time to capture my thoughts here, until now. Here is a a little update:

As I've mentioned several times, I'm watching the markets even closer than before (and I watch they a LOT!) I do believe we are still only at the beginning of a an overall downturn, but I do expect it to round out at the bottom over the next 4-6 weeks with a significantly higher finish to the year. We do have a lot of wicked volatility right now with up and down days alternating like waves hitting the beach (tsunami waves, at that.) Trading in a market like this is definitely not for the faint of heart and you have to have some pretty well defined goals. My goal? Create or add to long positions at rock bottom prices.

Anyway, It's clear where people are putting their money -- some sectors and equities have had shallower dips than others and have started to rebound nicely and consistently. They're easy to miss if you're not watching like a hawk. It'll be interesting to see if this continues or not, but for a handful of names in defensive sectors, I think we are in ok shape right now. To that end, over the last few days, I have cherry picked what I consider to be GREAT entry points on two great, great names. They are considered defensive, staple stocks, and I think they have a lot of upside even in an expanding economy. Here is what I bought with the associated entry point:
  1. Altria @ $82.77 -- I got really lucky on this one. I was adding to a long term position on 3/5 and I'm lucky to see it up over $85 today. The ex-div date and Kraft spin off (both in the next 2-3 weeks) make Altria especially attractive.
  2. Costco @ $55.25 -- The stock has been testing the $54.70 level and has held well. Today, they missed earnings, but only because of a few one-time charges. The downtrend after the miss provided a great entry point for the position.
Btw, I know my blog has taken on an investing tone lately and I hope that is ok. I promise to sprinkle in more retirement-focused content. Investing well is just one way to help get you there.

UPDATE: It looks like COST broke through it's support in the mid-$54 range today, but the good news is that there is another great support level around $52. I'm not sure if it'll head down there for a test or not, but my guess is that it'll hold if it does. Excluding the one time charges, they were in line with earnings expectations, so I'm not overly concerned about it. If we break the $52 level, I may become more concerned.

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1 Comments:

  • At 3/08/2007 9:27 AM, Anonymous finance girl said…

    I love love love Costco as a stock. I think it's pretty immune to whatever is going on in the economy.

    I also think the same of Nordstrom.

    If I was to pick individual stocks those 2 would be on the list.

    One of my IRA mutual funds has a major holding in Altria (Fidelity Balanced).

     

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