Retiring Early

Saturday, July 21, 2007

Tough market these days...

MoneyOk, time for a portfolio and market update.

It has been a turbulent few weeks -- up $5000/day, down $8000/day, up $3000/day. Apply, rinse, repeat. I hung in there -- until Thursday.

I have started taking profits in a few areas (only a few) this week, and thankfully I was selling into the strength of the market on Thursday. I took my CLWR gains (up about 30% on a deal announcement with Sprint), and I also sold off AEDAX, a Euro growth mutual fund because I couldn't justify the expenses I was paying vs the EZU EFT. They were basically performing the same, so why pay the expense premium, even for such a consistent fund manager? I may re-evaluate paying those manager expenses when this wicked bull market slows down and finding good returns becomes more difficult. Since Europe is doing so well, I did move some of the proceeds directly over to EZU, but not all of them.

I was also pretty lucky on my CAT investment -- the run up over the past 5 months has been incredible. When it missed estimates and was downgraded, it fell over 8%, which was a ridiculous overreaction. What did I do? I bought more! The luck part of the story came when CAT closed only down 4% for the day, so I MADE 4% on CAT yesterday. Sometimes you just get lucky.

Those were some of the bright spots, but on the other hand, I have had some pretty challenging days with both GOOG and SHLD. In an earnings miss from GOOG and a 50 pt down day for them, I lost my 10% gain in the stock. Thankfully, it wound up closing only 30 pts down, so I'm even on the stock from where I bought it. I'm holding strong and expect good things from the stock going forward.

On the SHLD front, I firmly believe in the investing and asset mgmt talents of Eddie Lampert and I expect good things to happen over the next few months. Wall Street is rightfully becoming more interested in the retail side of Sears, which I (somewhat boldly) think is the least attractive asset that the company owns -- time will tell. I have added to my position on the slide down and hope to see a turnaround in the stock in the back-to-school time frame (when retail picks up again) or when Lampert announces another investment stake or an all around buyout of some company.

One other recent sore spot for me is with GS. The financials are getting killed right now, but I'm hanging in there. I may even buy more as GS nears the 200 level, which would be one heck of a fire sale.

Other than that, the rest of the portfolio is doing incredibly well -- at one point last week, my entire portfolio was up nearly 7% for the month of July alone! Of course, as you'd expect, I have given up some of those gains over the past week, but I'm ok with that given that it was a broad market sell-off.

How is this market treating you? Are you buying, selling or hanging tough?