MarketBook 4/18/08

Yesterday was a crazy day for me, in terms of managing my portfolios.  Firstly, let me reiterate that I am still in the progress of revamping my management strategy, as I am learning more and gaining more experience.  That is going well, and yesterday’s activities were a good example of the positive progress I have made, whereas many days I am learning from my bad moves. 

I learned more about the markets, portfolio management and investment strategies yesterday than I have in all the years I have been investing/trading.  As I said a few days ago, I am now focused on quality in my portfolio management strategy, rather than the quantity of swing trading as some day traders do (remember, I am not a day trader).  As a result, I spent the day yesterday (when I had the time outside my normal day job) focusing on Google (GOOG).  This was new for me, because I have typically stayed away from stocks like this in the past, but with their earnings coming out yesterday at market close, I knew there was a play to be made here. 

All day I struggled with whether to short or go in all the way with GOOG.  There was increasing amounts of bad news going up to the earnings release and there were good arguments on both the bulls’ and bears’ sides.  Ultimately, I just had to sit and wait without moving.  It was too risky.  That was the first good thing I did. 

As the day went on, I started to become less confident in shorting Google.  I reviewed as much of their financials and two previous earnings releases as I could.  I reviewed previous statements and press releases.  I monitored media reports and pundits’ articles on the subject all day long.  I reviewed the ComScore ratings, which showed negative performance in Google’s paid ad-clicks.  I even have to admit that I spent (too much) time reading peoples’ comments on the Yahoo! forums.  That actually encouraged me more than anything to sit and hold, so that was actually a good thing. 

Overall, what happened was GOOG blew earnings out of the water after the market closed.  Since I was waiting and watching, I was able to take advantage of the subsequent increases in after hours trading, getting in at $500 (I originally could have gotten in at $450 b/f the market closed), and the stock continued up to the $530 area.  Currently, it’s still there as the market opened today. 

That doesn’t happen much for me, but I have to say it was a good move and I had a blast doing it.  That is the kind of thing that makes investing/trading so addicting.  This isn’t like gambling.  It’s an economist’s (an economist like me, anyways) paradise.  Now, I have a stop/limit order on GOOG, because although yesterday’s jumps worked to my advantage, one day’s research does not make me confident enough that this is a real long play. 

In other news related to my portfolio, I am now moving on to extensivley focusing on energy and commodities.  I also have put stop/limits on EZA, OIL, and FRO, because volatility in those spaces are starting to get to me.  I have ridden them a long ways.  Now, it’s time to start getting down and dirty with those positions. 

As a result of the continued acquisition news, I offloaded some of my position in FTE.  I am still long this stock, but it was time to reduce my position and limit the losses that my continue through the acquisition process. 

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One Comment

  1. Posted April 18, 2008 at 3:34 pm | Permalink | Reply

    Nice writing. You are on my RSS reader now so I can read more from you down the road.

    Allen Taylor

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