Börsipäev 8. november
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Rev Shark:
If You Have a Plan, You Can Ride This Mo
11/8/2005 8:42 AM EST
"Risk comes from not knowing what you're doing."-- Warren Buffett
Each day the rally continues carries the heightened risk of a pullback. It is a common mistake to believe the market is like a coin flip in which what has happened on a proceeding day has no bearing on what happens next. That's not the case with the stock market: The faster and higher we go the more likely we are going to see a sharp fall soon.
But just because there is increased risk in the market doesn't mean that we should sell everything and go hide in a hole with a sack of cash. The key is to have a plan and know what you are doing. Being heavy long in a market that has moved like this one may seem foolhardy to those who don't have a money management plan in place. But if you have a system for taking profits and cutting losses the risk of riding the momentum in a market like this is greatly decreased.
Yes, the market is certainly due for a rest. It needs to consolidate gains and let the short-term holders take their profits and move to the sidelines. However, just because the market is extended doesn't mean that it is suddenly going to fall apart and go straight down. Good stocks that have been acting well are not suddenly going to go to zero when the market rests.
What is your plan for handling the increased risk that comes with each day the market continues to rally? Are you going to try to anticipate a top and start selling now? Many folks do that -- and many of them end up being way too early and missing out on some good profits as the market moves higher than they think is possible.
Are you just going to hold on and hope that pullbacks will be shallow and that the market will keep on running? If the market weakens will you continue to hold on and stay confident that the trend will resume? A lot of people paid a terrible price for that approach when the market topped out in 2000. The stories of those who kept the faith and rode stocks all of the way down are legion.
What I try to do as the market walks the high wire and risks grow greater is to take profits in select stocks that seem the most extended or vulnerable to a pullback, but stay aggressive in redeploying that capital into new stocks. When a market has been acting as well as this one, I want to be heavily invested, but ignoring the risks of a pullback would be foolish.
This is a balancing act now. We don't want to be overly anticipatory and turn bearish too early, but we don't want to ignore the reality of increased risk in an extended market. So we need to take some profits where there is the most likelihood that they will slip away, but we also have to realize that there is momentum out there that may last for a while and that means other stocks may offer good returns without as much risk. We have our work cut out for us today.
The market is looking a bit soft in the early going. Overseas markets are mixed. Gold and oil are trading down and the news flow is rather quiet.
Gary B. Smith:
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Banc of America initiates Texas Instruments (TXN) with a Buy and $36 tgt as they believe there will be strong growth in TXN's wireless segment in '06
Banc of America initiates Intel (INTC) with a Buy and $33 tgt, as they believe there will be continued double-digit growth in notebooks and strong growth in emerging markets across the desk-top and notebook platforms
Banc of America initiates Advanced Micro (AMD) with a Neutral and $23 target, as they forecast soid growth (+23% y/y) in AMD's PC processor business in '06 and 51% y/y growth in Servers, following 130% growth in '05
Goldman Sachs initiates Harley-Davidson (HDI) with an In-Line/Attractive, as they believe sales and earnings momentum have slowed and the firm sees few signs of a reacceleration beyond more modest current growth expectations near term
Börsipäevale lisab värvi ka Toll Brothersi (TOL) teade prognooside langetamisest: "we now estimate delivering between 9,500 and 10,200 homes in FY 2006 versus our 8,769 deliveries in FY 2005. This compares to our previous guidance of 10,200 to 10,600 home deliveries in FY 2006." Vihjed tarbijate meelekindlusele ja pikemaks veninud ostuotsustele hirmutas investoreid niivõrd, et aktsia on eelturul ca 12-protsendilises languses. Raha voolab välja ka teistest sama sektori esindajatest LEN, DHI, BZH, KBH, PHM. -
Tänase päeva üheks kummalisemaks kõlakaks on tõenäoliselt jutt, et Google (GOOG) võib olla huvitatud eBay (EBAY) ostmisest. Mitte, et keegi seda tõsiselt võtaks.
We note that the Internet Holdr (HHH +1.3%) broke out this morning, led by EBAY +2.6%. We also note that GOOG -1.2% is a notable laggard in the internet group. The only thing we're heard that could explain this discrepancy (besides the obvious profit-taking in GOOG as it hit the $400 psychological level), is a strange rumor that GOOG could make a bid for EBAY. No one is taking this rumor seriously -- as we hear that GOOG is going to acquire a new company every day -- but we're just passing it along because it's the first time we've heard this one.
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no helista poistele,äkki on sest jamast veel mingi kasu ka?
