Monday, August 2, 2010

Prepare For Disappointment

I had great hopes that last Thursday would be a good stock market day for me. I was sorely disappointed. Mentally I was ready for some lousy results on three of my companies that were reporting earnings that day, but the rest of Wall Street wasn't as sanguine and brutally punished those securities.

The percentage moves were huge for a one day period. Bunge had been trading around $54 and was pummeled to $46, Neutral Tandem was taken down from $13 to $10.50, and Brunswick moved up from $14 to $17.50 [ a short put that stopped working ]. Lots of shares changed hands, probably lots were momentum driven, as the market reacted first and studied, if they did, later.

If a person's investing time horizon is longer than a nano-second, BG and TNDM were, and still are, attractive at those lower prices. The negative bet against BC will also still work, but it will work better for new money as it continues to act strongly. It will take another couple of quarters before company results start looking promising and I feel smart again. Bunge has already climbed back to $52; that's up $6 from the day of panic.

Nap time.

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