We have gone through the WORST TAPE in my investing/trading history.......
The last 6 months have been extremely traumatic for most participants of the market.....
It did not mattered if you were value investor or aggressive investor.......
It did not mattered if you were in mutual fund or stocks or ETF.......
If you were in options......then the decline in equity was faster......
The decline was so severe & relentless that even ones own concept of safe stocks were severely challenged.......
There were NO safe stocks.......
Every stock was taken for a major haircut......
It did not mattered if any company was an undisputed leader in its field.....it lost minimum 30%
Average decline in this market was 40% .........
So......
Why..... nothing worked in this market...when PE was only 17 ????
We were NOT in any bubble @ all ?????
Because...when PANIC/FEAR of deep recession takes over no LOGIC works ......
There was NO support for the market ...thus NO support to stocks @ any level......
Market treated every stock as if it will be affected by sub-prime & credit squeeze......
All stocks were being treated as if there will be "negative growth" going forward.....
The psychology is so fragile still that some new sectors will be taken DOWN who have fared better overall......like Ag,gold......
So ...what we have learned from this freefall ????
Most investors/traders will NOT learn anything @ all???
Because they are dismissing this freefall as once in a lifetime situation???
That will be a mistake......
The biggest take from this freefall is one NEEDS to reduce exposure in an uncertain market....
The other lesson IS ...take profit if it is given to you.......
Spread the risk around in many stocks in different sectors.....
So.....hopefully we are entering an UP phase of the market !!!!!
What IS a PRUDENT strategy NOW........
Go for sectors which has gone down the most in this freefall.......
Technology is one sector which has been creamed in the last 12 months...from CSCO to GOOG....they are all @ new LOWS.......
Retail has been downgraded & is looking attractive NOW after basing earlier and IS actually in an improving mode......
Financials & Housing had a sharp rebound in last week...MAY need rest !!!!
Growth sectors like Solar has many question mark in terms of credit availability so must be underweight until competitive landscape & growth picture becomes clear......
You can play all the new strong sectors with ETF as it IS safer way to go.....
ETF will be biggest beneficiary in the UP phase of the market.......
I am mixing beaten down techs /retail/ETF in my portfolio to OPTIMIZE my returns.....
US$ SURGE is bad news for Gold/Oil/Ag as those commodities are in freefall now...so have a cautious approach......
US$ SURGE is great new for US market because worldwide investors will invest in US market because of its LOW valuation & expected further SURGE in US$...gives them double kick in boosting their return on their foreign currency based investment......
I am quite OPTIMISTIC about US market going forward.......as we become the centre of universe again......thanks to Fed,Treasury,Legislators & White House!!!
I am NOT as optimistic about China & India as they face many challenges in their economy with their tightening of credit availability and coming slowdown in their economy......
So stay Home and invest/trade in upcoming sectors of Techs/Retail/Financials/Housing all through safe strategy of ETF !!!!!
Good luck on RESET of your strategy !!!!!
BLOG does NOT give buy or sell.
Enjoy Easter holiday !!!!
Saleem
22 comments:
Saleem,
I absolutely love your blog this morning! You are so right on the money. What do you think about XLF? Also, is there an ETF for retail and if so, what do you think about that rather than the risk of an individual retail stock? Thanks for your thoughts this morning. I am looking forward to Monday. Best wishes.
Hi Doug,
XLF & double the $ is UYG for financials.....
Retail ETF..I have not located any???
Yes.....those ETF is great as strategy for financials.
Saleem
Saleem,
RTH or XRT ??? I think that XRT has oil in it with retail, so I dont know if it would be good or not? RTH I believe holds 20 retailers? If you get a minute to take a look, please let me know what you think. Thanks.
Hi Doug,
XRT is the best retail ETF...I like their top 10 holdings ....
It has NO oil of any sort..
89.97% consumer services
9.12% Consumer goods
.64% business services
So..It IS the best retail play based on where the price/reward ratio..only cost $32.96 & is option eligible.....
Saleem
Saleem,
Wonderful blog commentary today. Are we out of the woods yet? Hopefully, some stability will return to the markets with upwards pressure on prices. China and India have excellent growth prospects for the next decade at least. However, as we know, stock prices do not always reflect growth value.
Hi Standards,
Yes...it IS safe to mingle with SHARKS in US.....
China & India ETF are deep in bear market territory....check FXI & IFN???
I have learned one thing NEVER fight the tape...whenever I went with my FA analysis ...I got CREAMED....
Remember China Olympics this summer...90 days from NOW...look where BIDU,FMCN,SOHU,SINA,NTES,SNDA,NCTY are trading...????
Tape never LIES ????
Saleem
SALEEM
I am beginning to see the light! thanks
China has to start to dim as it was geared to Olympics preparation and general growth. Last year while there I saw growth every where no palce untouched!! Lots of didtute peole but a rising middle class!
THe growth will soon be in the past. China is having big problems with inporting materials--just look at the DRY shipping problems they have had the past 5 months. The rates are up HUGE, that was some heavy lifting they China was doing to keep there ecomomy booming. It has to end! They have drove rate to the extream to keep there ecomomy growing.
SO US $$$$ is the economy to bet on. It is hard to believe that retail can come back -- it has been so beaten back. Teckies usually go down spring to fall and POP for Winter --Christmass sales and big business buying new equipment.
I think V on any sell of is a winner too.
Just my .02 cents.
M
Hi Madmax,
We are TRYING to come UP from beaten down LOWS......
So...tech boats will rise with all other boats.....
We are @ 52 wk LOWS in techs...they will rise UP in a hurry......
Those normal cycle has no meaning when techs have been trashed.....
China & India hyper-growth is done now they are heading to 7% growth..from frenzied 11%+++for many years !!!!
7% growth is there in most developing economy...so no big deal about China 7% in 2009???
Saleem
Saleem
Thanks for your take on the retail ETF's Saleem. I am happy right now with HCBK for a financial. When it is done, the ETF XLF might need a break too so I will keep my eye on XRT for a retail play, in the meantime. I am loving the QLD!!! Another up day or two and at high of intra day I will buy a little SDS for profit taking. Hopefully the market might start looking like two days up and one day down on profit taking. That would be a nice rythm and a nice change of direction. I will talk to you on Monday. Best wishes...
Saleem,
Oh, no, I think you must have misunderstood my intentions. What I was saying is that there IS a disconnect between FA and tape. The tape should be heeded at all times. FA will get you the best companies to invest in (LDK?). But still, like you said, FA does not make the tape. Even with FA you can get creamed (as I know!). China and India have been dragged down by the US tape and help from Hedgies & special interest groups like GS IMHO. Yes they are beaten down,,,what a better time to buy????
Hi Saleem. I have been fishing through a lot of stocks and their charts this weekend to look for battered down stocks who seemed to have put in a bottom. AFSI, CELG, CY, SSRX, ROST, PRAA, HXM, HOV, BIDZ and RIMM. Most would have a logical stop loss near either their lows or nearby trend lines. Any opinions?
Hi Minaccess,
As markets are just turning UP from 16 months low......
Any diversified well researched stocks should be very productive...
In your list of stocks ....I am only familiar with RIMM...which looks "superb"........
Instead of HOV & ROST.....a better approach CAN be XHB & XRT ETF for home builders & RETAIL.
But...HOV & ROST "can run in a hurry".....
CY has solar component of SPWR??? has been a dog lately and showing tremendous weakness????
This is a market where MOST stocks should WORK...so play all your HUNCH !!!!
EWT may work as Taiwan had a china/business friendly victory...
Good luck on your strategy !!!
Saleem
Fidelity, GS and many other institutions have added LDK recently,check below:
LDK Solar Co. Ltd. NYSE
Institutional Holdings Description | Show Summary
Click on the column header links to resort ascending (ar_bk_up.gif (64 bytes)) or descending (ar_bk_dn.gif (64 bytes)).
Owner Name
Select a name below for more information. Date Shares Held Change
(Shares) % Change
(Shares) Value
($1000)
PERRY CORP 12/31/2007 423,997 423,997 New $9,786
INVESCO LTD. 12/31/2007 406,682 355,728 698.14% $9,386
FEDERATED INVESTORS ... 12/31/2007 368,200 (722,400) (66.24%) $8,498
TIGER GLOBAL MANAGEM... 12/31/2007 335,000 335,000 New $7,732
COATUE MANAGEMENT LL... 12/31/2007 320,000 320,000 New $7,386
GOLDMAN SACHS GROUP ... 12/31/2007 297,912 287,983 >1,000.00% $6,876
CADIAN CAPITAL MANAG... 12/31/2007 279,594 - - $6,453
MORGAN STANLEY 12/31/2007 269,935 233,980 650.76% $6,230
TOURADJI CAPITAL MAN... 12/31/2007 252,593 252,593 New $5,830
TIGER VEDA MANAGEMEN... 12/31/2007 224,000 224,000 New $5,170
HELLMAN JORDAN MANAG... 12/31/2007 216,900 165,400 321.17% $5,006
CITADEL L P 12/31/2007 209,927 139,958 200.03% $4,845
J P MORGAN CHASE & C... 12/31/2007 188,282 188,282 New $4,346
MERRILL LYNCH & CO I... 12/31/2007 186,649 102,220 121.07% $4,308
AMERIPRISE FINANCIAL... 12/31/2007 176,406 176,406 New $4,071
MARBLE ARCH INVESTME... 12/31/2007 174,000 - - $4,016
PRUDENTIAL CORP PLC 12/31/2007 173,200 (160,520) (48.10%) $3,997
CITIGROUP INC 12/31/2007 140,152 132,660 >1,000.00% $3,235
OZ MANAGEMENT LP 12/31/2007 130,000 130,000 New $3,000
PICTET ASSET MANAGEM... 12/31/2007 124,675 3,864 3.20% $2,877
analysts calling spwr a buying opportunity @ ~$70/sh, with an earnings estimate of 1.17-1.27/sh for 2008. Yet LDK with earnings projection 1.55- 1.89/sh sits at $20!!!
QLD is roaring this morning Saleem. Great call. Glad you got me in!!! Thanks.
Hi Doug,
QLD is the "mother of all ultra pro"
Stay with it and do NOT be trigger happy.....
Nasdaq IS going to lEAD this market much much HIGHER....
I am glad some of us saw the QLD lighthouse !!
Saleem
Thanks for the stick with it advice Saleem.
Hi Saleem. Soon after the open I bought CELG at 58, HXM at 56, MCRS at 36.30 and POT at 149.
Hi Minaccess,
All your stocks are great pick.
Good luck on a major UPTREND in markets.
Saleem
SALEEM:
Good Morning kind sir!!!!!!!!!! GREEN is hte color of money!! Yes
Wow I love it, Now I am am confused
Do I sell LDK , CMED and AGU.
POT and my DRYS ar eon fire.
Thank you so much for the QLD recommendation, up 7% as we speak.
The financials are on fire0who knew
Have a great day
I put order in to sell LDK and what are your thoughs about CMED I am in at $56.30.
Madmax
Hi Madmax,
You do NOT have to sell CMED or LDK...if you want to keep it...
Risk/reward on CMED/LDK is on the POSITIVE side.....so stay PUT !!!
Saleem
SALEEM
I have hung on for so long to LDK and CMED,
I will hold off selling thanks!!!
THis does not feel like a dead cat bounce. This upturn seems accross the board.
Wow what a market today!!!
At this point should we buy more LULU or QLD or take the profits??
thanks my friend
Madmax
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