RSS feedWell, after about a month of floundering, I decided to pull the trigger and sell both Savvis and Scientific Games. Basically, because each company had about a weeks worth of down days and had fallen about 7% from my purchasing price. This was at the beginning of the last week, and it turns out that Savvis has rebounded quite dramatically while Scientific Games remains in it’s quasi-downtrend. Part of me feels that I could have been more patient with Savvis, but this is just a lesson in confidence as well as discipline in your investing. My 8% stop-loss rule is in effect both to keep myself from being impatient with stocks that don’t perform immediately as well as to protect me from holding onto bad stocks too long. In the case of my last two purchases, I really wasn’t overly confident in my analysis of either which resulted in my being shaky in my faith of them. Granted hindsight is 20-20, but I do think after looking at Savvis’ charts it did not quite warrant being sold when I sold it. Scientific Games on the otherhand, I can quite confidently say that I am happy to be rid of.
Anyways, moving onto the analysis of my new position: Cosi. Many of you probably know of Cosi. It is a competitor to chains such as Au Bon Pain and Panera Bread. Cosi is not quite profitable yet but is a fast growing food chain with a stock that has fallen nearly 50% this year as a result of less than stellar growth. It is, however, a very new franchisor and operates many successful company owned locations. Third quarter results showed that the company’s new product initiatives have been quite successful and I have been watching the stock for a month or two now as it has been in what seems to be about a 5 month consolidation period. On Wednesday, the stock broke out and I purchased 190 shares for Portfolio A. While the fundamental analysis is not necessarily important given the goals of Portfolio A (which is just to find any stock with potential to grow in the near term), the Cosi’s technicals also look strong. It seems that this stock should continue to roll and I do think the 7.50 dollar range is not out of the question in the near term (1 to 3 months). I apologize for the lack of graphs in this post, but I think a quick look at Volume+, Price Channel, and MACD will give you a decent idea of the technicals that I am buying off of. Here’s to hoping Cosi can enter into a true uptrend in the coming weeks.
