30-Jul-08
Little posting, less trading
I haven't made many moves over the past two months or so. The market is stuck in a trading range and despite the volatility, I haven't found many low risk high return plays. Over the past three weeks, I've underperformed as energy as pulled back, and while the momentum is gone from the sector, several look cheap enough to sustain a price floor in the stock even if oil drops to $100.
Other than attempts to find the bottom in Lehman, fishing in the financials still seems to be difficult. Even at these depressed prices, most of the larger financials are trading at or above book value. Assuming their book values are artificially inflated, the stocks can fall a bit before I would sense capitulation and find it worthwhile to go long. I've lightened up on my WFC short (I am one of the few investors who have shorted financials this year and have lost money on the shorts!).
From the long side, I was tempted to add to TEX or initiate a position in BUCY. Other the last two weeks, these would have been profitable. BUCY remains on my watchlist.
Financials I'd like to hop into on further weakness include WBS, FAF, and BAC.
As you can sense, there's little in the way of assurance on what I'm looking at. I find most securities to be fairly valued, and I think I'd lean slightly to the bearish side for the general market. Other than falling commodity prices, I don't see catalysts to improve the malaise of the economy.
Posted at 12:40 in Market Report | Permalink | Comments () | Top
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1 Comments on "Little posting, less trading"
As far as Financials go, I believe RBS is at an interesting valuation. Lots of growth to come... dipping their toes in China in consortiums with other banks. You might want to take a look a MKL which has a strong investment portfolio to hedge their specialty insurance core. This stock is around $70 under my entry point (and I thought I paid a fair price). I own both of these. Especially in MKL, I have a buy and hold/accumulate when po$$ible strategy so I haven't stressed about the drop. It's a good entry point, I think.
Posted on 30-Jul-08 20:39 by jfabrega
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