Much like on Friday I am going to close some small positions - even in names I like. I have to say the action in the market is so arbitrary it is worrying me. I'm finding fewer and fewer names to like from a technical perspective as the bear market claims more and more victims....
#1 Illumina (ILMN) is a healthcare technology stock that has treated us very well, a $10.5K gain since inception in December 2007. However this is a case example of a stock the bear has finally found, and has not been participating with the general healthcare space. It is very expensive but that has not stopped it in the past. We like this name and we'll revisit it later - but that appears to be a double top I spy (hence making it a short from a technical perspective until proven otherwise). We're selling the remaining 0.1% stake today.
#2 Gafisa (GFA) is a Brazilian homebuilder of extremely cheap valuation which cannot catch a break - despite an awful chart we made money on this name by taking profits much higher; $3.1K gain. This is a case example of why to take profits when the going is good - we sold a good bunch in that May spike, while losing money on most of the other parts of the position. Most of what we owned of late we punted into that spike north of $30 last week, so we are selling the remaining 0.1% stake today. We've have held this since November 2007. We'll be back to this name in the future and at some point I expect to make a lot of money here. Sadly, we're making more money with US homebuilders at this time because that's where the hedge funds are.
#3 Millicom International Cellular (MICC) is a telecom name that serves smaller Latin American countries as well as parts of Africa, etc. This name we've held twice; the last time around we rebought on July 31st under the theory of "buy stocks that are beaten down" but it has not rebounded from that $75-$76 area we bought. We selling for a very small profit as its in the $76s today and exiting the 0.2% stake we had remaining.
#4 Baidu.com (BIDU) is the Chinese search engine giant; another very pricey stock but another name where valuation means little - it trades on sentiment. We've been in and out a few times - I cut some earlier today and the chart looks to be in (potentially serious) trouble so I'll exit for now and re-assess later. $275 could turn into $225 without much work at all. This is the last 0.1% stake. We have a $9.0K gain overall in this name.
#5 Perfect World (PWRD) is a Chinese video game company that trades at a very large discount to growth but no one wants any piece of it. We began this position in May 2007 and are exiting the remaining 0.2% stake and taking a $5.2K loss. Aside from being a decent trading stock between $23 and $25 the near term future does not look too bright.
Usually I'd keep these sort of stocks in the bottom of the portfolio as "holding" stakes but the idea is to buy them on stronger action/breakouts - which has not been a successful strategy over the past few months in the market. So we're going to exit for now - all told this is only 0.7% in total of the portfolio but 5 less names to fuss over. I continue to like them all fundamentally, but fundamentals simply mean nothing at this point as I keep repeating. This makes investing with my methodology almost impossible.
To be blunt I could probably cut another 10 names with similar charts. This is why the market continues to have me worried. There are very little charts of strength. Most big up days are simply oversold stocks rebounding to technical resistance before they begin selling off again. That is very bearish action despite looking good when the nightly news reports tell you what the stock market did that day.
No positions
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