Thursday, June 08, 2006


A really bad day

One of the worst trading days of my career, both in absolute and relative terms. The portfolio declined 1.7 percent. The really annoying aspect is that my portfolio value barely moved up during the afternoon rally even as the major indices moved back to near break even (I thought according to Cramer such interday recoveries are almost statistically impossible?). I must admit, I really hate days like this.

Anyway, I sold most of my CTIG shares (I wanted to sell them all but my order wasn't fully filled). I've soured on the stock somewhat ever since the company reported a loss last quarter. Not to mention the stock is up 40 percent from where I bought a couple of months ago.

Well, as I posted a few weeks ago, we are nearing the bearish crescendo of the 4-year cycle, and it's becoming "sell the rallies" instead of "buy the dips". A relief rally is close (just started), and you'll get a little relief, but that will only be temporary if you don't "sell the rally". That's hard to do with virtually nothing but illiquid stocks, but that comes with the territory ...
You "sold most" of your CTIG shares?! I see TOTAL daily volume on it was 18.3K shares and it's at 0.37!

So this must really have been an insignificant portion of your $700K portfolio. It surprises me then that you kept it this long or ever bothered with so few shares.

You have a very strange portfolio. Not sure which
position(s) contain the bulk of that $700K but it obviously wasn't CTIG.
I really enjoy your blog and we have exchanged emails a few times.

Watching the "pain" as your portfolio retreats some and I thought I'd throw in my (potentially wortheless) comments.

I'm not sure when you started the blog (and investing) but at least for the last few years (almost 3) we've been in a bull market. Most "experts" I read (Cara, Neely) as well as all the data from the 4 year cycle says that not only are we going down for a bit more; but potentially much lower. Obviously things could turn on a time and we could have already reached bottom; but that does not seem to be the consensus of the folks I read or 100 years of 4 year cycle data.

One interesting stat I read multiple times is that the average return from 4 year cycle market bottom through about 15 months out was 50%.

Given that I am of the mindset to preserve my equity and then go full force when I am convinced we are near a real bottom. In this regard, I am mostly in cash after being 100% invested at 2005 year end and if anything am playing shorts more than longs right now. You have had great returns and I admire what you have done but if I were you I'd be mostly in cash right now, waiting for some clear signs of a bottom.

Best of luck.

Mike, thanks for the comment, I tried to address it in today's post.
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