All CASH, all the time

Soros said he believed that current financial market turmoil was destroying capital and if investors managed to hang on to capital they would be "doing pretty well."

"Either you have to be very very cautious or you have to be very nimble. One or the other," he said.

This is a tough market for sure. Much more difficult than the ones of the past few years. That is why cash is king. Experience helps. Caution is imperative...

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My stops were hit. Simple as that. DUG sold off at 31.79. I sold TWM at 77.
I am now almost 100% cash.

The positions were small. The losses were small. Still they were losses. That's the game though: you have to be able to predefine your loss limits and then be ok with it when they are hit. Nobody likes to take losses. However, the large gains, limited losses strategy is time-tested and a very effective one to follow.

That being said: It is always important to learn from what happened so as to not repeat them/ "Fool Me Once. You Can't Be Fooled Again."

Dug:
Timing was too early. This segment is in full bull mode. Something will trigger it DUG to shoot up. I have no doubt about that. Any mention of the US easing interest rate cuts will turn it on a dime. I still am bullish on the DUG but my stop was hit and I will not re-enter to fight this trend. There is summer driving season approaching, gas is already at almost $4 a gallon where I live in California, and the fed has continued to back lowering rates over inflationary concerns. Its a strong combination. However, it will turn. The language at the next fed meeting may be a catalyst here. I will be looking for DUG at that time.

TWM:
I missed placing my original stop at 79 to break even on half of my shares after gaining profits on the other half when it went to 81. At 77 I ended up even overall, minus commissions. Technical mistake on the stop. I will double check that these are in place in the future.

CMED:
A tiny loss here. ($20). This is one of my favorite companies. I was surprised to see it fall through support at 40 so easily but that is why I placed a tight stop at 39.51.
I will re-enter this company almost for certain when my opportunity price is hit. This looks to be no higher than 37 right now. The 40 price did not offer the screaming OPPORTUNITY that one needs to look for in this market. That is why I had such a small position.

CASH, OPPORTUNITY, PATIENCE, DISCIPLINE, TRENDS, FUNDAMENTALS, TECHNICALS.

These have worked well in the past to create a high gain/loss ratio. For right now CASH is there to look for new opportunities. I will be more discerning on my entries in this market going forward. The overall plan is in place.

The earnings were not horrendous. However, I do not believe it's now "all good" with the markets. Mozilo and his like really screwed the public. And we will have to pay for it. The market will reflect this as well. It's just a matter of timing imo.

In the past my strong point has been to identify strong companies and build positions at the right price using metrics such as PEG, PE, management strengthm and some technicals. This is the toughest market I have seen which is why I have been and continue to remain mostly in CASH. I will get into small positions only when tremendous opportunity affords itself.

Best,
Jon

Best,
Jon




This blog is for informational purposes only. It does not give investment advice.