The overall markets continued their bearish slide to new lows, and finally took the last remaining bright spots in the market with it - and thus my portfolio.
The market began this bearish turn in late May. However, stocks in the energy, drilling, machinery, and agricultural sections of the economy had continued strong and many continued to mark new highs. This was no surprise, considering supply and demand in these sectors.
However, even the market leaders can't fight the trend forever. And true to form, the bear market finally got its claws on the high fliers and is beginning to bring them back to earth.
Having built my portfolio on these aforementioned last remaining leaders, it is no surprise that it took a beating this week. While the S&P 500 lost 1.21% for the week, my portfolio took a 11.08% hit. Ouch. Welcome back, kid.
The carnage: Seven positions were entered and promptly exited this week for losses averaging 9.4% each. The eight remaining positions still on the books are all currently showing losses.
The only position of these that shows real potential for big gains is RBN (Robbins & Myers). To a lesser extent, BABY (Natus Medical) looks promising as well. Hopefully these positions will hang on long enough for the general markets to hit a near-term low. The beginning of a new uptrend in the markets should provide an impetus for these stocks to take off. But, regardless, I won't hesitate to pull the trigger to exit these positions if they hit my stops.
As the markets maintain their bearish tone, it is important to focus on the fact that odds are we are much closer now to a near-term bottom. With the leading stocks in the market finally getting knocked of their perch, the signs of capitulation are starting to pop up. And that's what you need to end a bearish slide. You need investors to finally all throw in the towel in a flurry of high volume panic selling. Until we see that, this bear market will continue wearing us down.
Meanwhile, I'll keep maintaining my watch list of industry leading companies with solid fundamentals. These will be the companies that will eventually lead us out of this bear market and will out-pace gains in the general market.
Positions exited on Thursday:
PBR @ 64.34 for a 9.0% loss
CAM @ 52.36 for a 6.1% loss
NBL @ 94.95 for a 8.7% loss
ARD @ 47.55 for a 13.7% loss
I'm new to this whole "blogging" thing and haven't quite figured out how to make my excel spreadsheets available for people to view on this site. Bear with me as I figure out a way to post this info. In the meantime, I'll just list my existing positions and performance to date:
Portfolio start: Monday, June 30, 2008
S&P 500: -1.21%
Portfolio: -11.08%
Positions:
OXY, RBN, GHM, CNQ, ECA, SWN, BABY, APA.
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