Saturday, October 18, 2014

"Well that was a fun two weeks . The US markets took a repeated drubbing, hedge funds were forced to liquidate positions, and Ebola talk scared the hell out of everybody. The facts are though, that the price of crude oil came down and there are other signs of Deflation"

Dow Jones Industrial Average 16,544.10 (Down) Week ending 10-10-2014
Dow Jones Industrial Average 16,380.00 (Down and Ugly) Week ending 10-17-2014

OMG! Well in the immortal words of Louis Rukeyser after the 1987 crash , "It's just your money, not your life".

 Personally, my IRA account which is mostly growth stocks has been hammered down 12.25% off of it's highest values of the year in this two week rolling sell off. But the one thing you must remember is you still own the same amount of shares in these high quality growth companies that you have picked out, so nothing has really been lost or changed.

The market at the end of this week reminded me of a Carnival shooting gallery. Opportunities arose at different moments of the day and then suddenly disappeared.

Schlumberger Ltd. (Symbol SLB) with its tremendous backlog of business flashed for a moment at $85.00

a share, by the end of the day it was back to $94.78 in aftermarket. 

Honeywell (Symbol HON) with its good business and its steady 2% dividend
slipped down to $85.00 also, only to end at $90.30 in aftermarket. Just like ducks moving across in rows waiting to be shot at. 

Celgene Corp. (Symbol CELG) tumbled down to $85.00 dollars per share after I had recommended it last week at $95.00 in my blog. That one I jumped in and bought, (took my shot!) and it ended the week at $88.15.

Gilead Sciences (Symbol GILD) had also dived down to $92.00 per share only to end back up at $100.95.

I added to my positions in two oil stocks, Continental Resources (CLR) and Triangle Petroleum (TPLM),  taking advantage in the temporary downward spiral in West Texas Crude oil prices.

I was selling positions in the shaky semiconductor area, such as Cree and Invensense, and adding to positions in the more solid Buffalo Wild Wings (BWLD) and Constellation Brands (STZ) consumer goods companies.

I think if you get another travel Ebola scare this week and the airlines get knocked down , I would look to buy some  Delta Air Lines Inc (DAL) at a bargain price.

The point is in this discussion is that with this wild volatility you need to to have some cash set aside to take advantage of such opportunities as they briefly show themselves. 

Just think of it like the target shoot at the Carnival. Take your shot when it is the best probability to add quality names at a discount to your portfolio. Get rid of names that you do not want to hold in your 2015 portfolio going forward to raise cash.

All that said, I think this week we could still have a little more downside. So if your duck briefly shows up, take a shot at him and buy in on a sweet deal!

"Life is a carnival"  ... rock group The Band


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