Another day, another yawn. Sorry about last week. If you were looking for some daily commentary, I was otherwise occupied running around NYC for the week, and it makes it tough to get the content side in. The excitement of the FED meeting was the big story for the week, but I covered that in a Thursday/Friday edition.
I was in NY working on two new ideas I will be delivering before the end of the year. I’m going with less ideas, but bigger and better ones.
My observation today is one of frustration. I’m frustrated because there’s an evident change in the character of large caps, but no change at the small and micro cap level- yet.
For the first quarter of 2008, it was “Sell the Rips, Buy the Dips”. My single best trade of 2008 was the Monday morning after the Bear Stearns debacle was announced. Goldman Sachs (NYSE: GS) was simply beaten the morning, and I made $21k in two days by having the courage to buy.
In fact, I looked at a chart of AAA mortgage portfolio values today, and it is moving to the upside for the first time in a long time. The porfolios have appreciated from a low of $51 on a $100 par value to about $58- the chart has not broken the downtrend line, but it’s coming close. I’ll show the chart in a future edition- this is a very positive sign for the beginning of the end of the turmoil in the mortgage markets.
However, along with the micros going nowhere, I have been frustrated on the short side of the rips for the last month. Two of the four horseman of the last bull market- AAPL and RIMM just keep going up with no major correction in sight. I caught AAPL the first time, but now I holding nothing as it rockets. I am long a few put options in RIMM right now, and the stock keeps cranking higher.
On the micro front, the stocks I am covering are a snore fest at the present time. SPKL can’t seem to get through $.90- PNWIF gets Costco going, announces Australia, and can’t find any volume. EFSF has been silent on the DRTV campaign, so I guess investors are assuming it’s not working because the stock is very quiet. TCGD and NIHK are in comas. All in all, a very boring period in time.
On the plus side, I guess we needed a period of time where these stocks stopped going down, and simply traded sideways on low volume. We are right in the heart of that period, and I can’t wait for it to resolve to the upside.
On another note- I don’t believe the usual “Go away in May” strategy will work this year. The annual correction has already been priced into these issues, and the only question in my mind is whether we will have a decent rebound before the summer, or if we will have to wait until the Fall.