The Curious Investor

Hi all,

While I usually try to shy away from being too personal on this site, I feel like I do owe an update to the regular readers on this site as far as why I’ve been so dormant lately. As some may know, I’m graduating from college in a week so things have been quite hectic and, as much as I love writing in this blog, end-of-academic-career celebrating is definitely taking precedence at this point in time. Actually, truth is, I’ve been studying for finals the last week plus, but going forward it’s all good times! In fact, I’ll be leaving for a trip May 26 - June 12 so posts may continue to be erratic for the next month. Though, I’ll do my best to pre-write a few articles to keep you on your toes. Best bet is definitely to subscribe to the feed so you can stay on top of any new developments!

I will be starting a new post series in the coming days on The Elliot Wave Theory which I think will go handily with my recent posts on Dow Theory (Click for Parts 1, 2, or 3) and Fibonacci Retracements. So stay tuned!

Finally, as I will be leaving for my trip in less than week I think it’s time to address the status of my portfolios. As the markets have rebounded, many of my positions are looking ripe for the picking. I’m ready and willing to cut ties with at least a few of my positions and take profit while away. And, learning from my mistake during a week long trip in January, I will definitely have stop orders in place to make sure that I don’t cough up gains once again. Here are the price levels that I think represent some very good near term targets in various positions held in Portfolios A and B.

Portfolio A

Google - Continuing to hold. While valuation doesn’t support continued buying, I do believe there is upside that remains.

China Mobile - Stop Loss: $82.50. Has reclaimed the gap made early in the year and now seems to be trading sideways as the market figures out appropriate valuation. Willing to hold long term but am happy to take profits at this level should the stock reverse course.

Apple - At 34x 2008 earnings, the stock is reaching full value especially given a still jittery consumer climate and rosy Mac growth estimates. On a technical basis, I tend to like to watch for strength or exhaustion as a stock reaches its former highs, hopefully this will shake out within the next week or so of trading so I can make a more nuanced decision before I leave. If not, stop loss level is $181.50.

VM Ware - VM Ware had a textbook retracement from the gap down caused by its last earnings report and part of me is kicking myself for not selling when the stock reached the 50% retracement level at ~$70. The stock seems to be making a slow creep back towards $70 and will soon be testing resistance there. I’m not sold on the volume of this transient rebound and will set profit targets at $70.25 with a stop loss at $66.50. This is a tight range and I anticipate making a decision before leaving for my trip.

Portfolio B

Mastercard - Global growth and slow but sure capturing of market share has propelled Mastercard’s stock to all time highs and I’m sitting on a near double in this position. Can such a large company keep up this breakneck pace and justify a Forward P/E around 30? I’m not entirely sold, though I continue to believe in the fundamental story. No profit taking limit, but while I’m away a stop loss at $279 would seem prudent.

J Crew - J. Crew is my long term bet on a retailer. While it may not provide the home run returns that ANF and Gap provided their shareholders in the 1990s, you can be sure that with Mickey Drexler and Texas Pacific Group still quite involved, the cards are stacked in your favor. Unless the bottom falls out, I’m staying in this one.

Bank of America - Yet another rebound play. My floor is $35 which, barring a meltdown, should not be too much of a worry. It’s much too early to identify any points for profit taking.

MEMC Electronic Materials - Though silicon prices have stayed firm and the solar market continues to look strong, I’m still a bit worried about MEMC’s long term ability to deliver outsized gains. It would seem that the highs in excess of $90 seen three months ago are all but out of the question at this point and I’m, to some degree, ready to move on. Barring a surprise announcement of another long term solar contract, I’m looking to sell around $78-$80 and will not wait around for another drop through the $70 barrier provided the stock clears this hurdle by the end of the trading week.

Well, those are the updates for now. Stay tuned. I’ll do my best to post regularly for the next week or so and get some pre-written posts lined up for my trip away. But, no gaurantees!

Dan

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