Sometimes I wake up with an idea, go to the computer and write a complete post and publish it to TPCI. Sometimes I begin drafting a post weeks in advance with a plan to post it at month or quarter end. I began drafting this many weeks ago in anticipation of the end of June. My initial opening line was "I'd like to get things going UP instead of sideways". Doesn't that just bite. After the bloodbath of June, sideways would have been great!
The TSX began the year at 11,746. At the beginning of June is was 11.762. The end of June 11,294...down 4.85% for the year.
The TSX began the year at 11,746. At the beginning of June is was 11.762. The end of June 11,294...down 4.85% for the year.
Obviously I need to change something. I still have faith in my two main funds, the Endeavor and Resource Funds. I'm thinking I need to change my strategy for my trading account. The winners are still winners, the losers are still losers and the do nothings are still doing nothing. My strategy has been to hold the winners, with the expectation of further gains, and hold the do nothings with hope that they'd turn into winners. Because I don't sell anything at a loss, I'm still holding a couple of losers with the faint hope that eventually I'll get my money back. Well, guess what? It's not working! For seven months now the winners have fluctuated between break even and plus 5 to 10%...and because we can't put two decent months together the gains of April disappeared in May...and the whole process began anew. My do nothings have taken a similar path except that they've been fluctuating between break even and minus 5 to 10%.
What to do? I'm thinking that I should identify a couple of undervalued stocks to add to my account with the hope of a nice short term run up. You guessed it, I'll be watching BNN until my eyes bleed. I think I've mentioned how painful watching BNN can be. One rainy day when I've nothing to do I'm going to watch it for a whole day and document how many times they mention and analyze the first headline story of the day. They really should be embarrassed. Michael Kane leads with an overnight news item at 6:00 AM 'Peg time and after rehashing it over and over all frickin' day long it's Pamela Ritchie's lead story thirteen hours later on Market Call Tonight. But enough about BNN.
Thankfully there are some short cuts to BNN research. I've previously mentioned Stockchase.com. Stockchase capsulizes all the BNN guest analysts' comments about the stocks they talk about. They include the date of the comment and the stock price of that date. Once I identify a few potentials, I'll be looking them up on Stockchase. The Bullboards on Stockhouse.com are also an interesting read although you have to recognize that these comments are posted by retail investors with an agenda of their own. Still, worth a read.
After identifying a couple of undervalued stocks, I'll bail on a couple of my present holdings to raise the money. This step will take a while as I'll try sell at the top of the aforementioned 5-10% curve. The decision to sell a good stock is not easy. On the other hand, it can get pretty boring watching as real good stock go up and down in the 5-10% range. The fact is, the real good, real big companies seldom spike up in value. As someone once said, "elephants don't gallop, they just plod along".
I've initiated the first step by putting in a few sell orders. I picked four good ones and put in sell orders equal to their 52 week highs. They're all so far below that right now that I don't even have to watch. Maybe, just maybe one or two of them will get there in the next few weeks (or months) and I'll have some cash for bottom feeding.
