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*Wall Street – House of Pain

For one of our friend’s who asked about the recent drop, and how we have to play it now.Also can be a good read for another believer who asked, “How to start off, if I don’t have any background of where the market is now?”Read on…

Is the bull market over? Do we have to start learning to short stocks in order to gain money now? Why hasn’t the market recovered since the last week’s sell off? Why is everything RED in my portfolio? Is there anybody who is still making money out there? How to play these times? Is Mr. Bear hungry?

aaaaaaahh Lot of questions! Lots and lots of questions! Sad faces glaring at the plasma screens at the exchanges. People selling in panic, people taking profits, people loading up the trucks in order to bring their averages down. Moreover, importantly everybody is trying to keep themselves as diversified as possible.

Why the market is down?

Because of rising yields and the fear that there won’t be any cuts in the interest rates in the near future, housing concerns, treasuries being sold, heightened concerns over inflation, decreased M/A activity, all, are one way or the other responsible for the recent drop. Most of these are inter-related. Concerns on inflation, decreasing the possibility of cutting interest rates. Treasuries selling adding to rise in the yields, are driving investors from stocks to bonds. yyaaa there are a lot of reasons, and I’m sure educated financiers, or money managers can write books on current situation.

What to do now?

Very SIMPLE, play it safe. Do not fill your basket with just apples! Do not buy unless you know for sure this short term trend, that is prevailing in the market now, will not effect the stock you are going to buy.

Play stocks which have some good news coming up (Our Morgan Stanley Play, with Discovery coming up) Wait until these gusts settle down. I don’t think this is the end of the Bull market. Just see the way companies are still reporting increased profits quarter after quarter, and year after year. That speaks for the bull market. Unless the S&P posts some loss when compared to the last quarter the bull market is not done. Let the gusts blow over.What do we do if the yield rise do not stop and we don’t have a cut in the interest rates and rather see an interest rate rise as Ben just clued after the last meeting? oh Just keep your portfolio into stocks that get hit less on that news. Keep away from the financial plays if this environment prevails even after the earnings season for financials.I’ll keep trying to find out those picks that will make you some MAAADD MONEY.

BTW: Did you but some TEXG in that beautiful drop down. I didn’t have enough cash to cash onto that drop 😦 I think we missed that boat. But I like it anywhere below 2.5. These are the kind of plays you can play now.

EVCC is also on a dip. If you can dare, add some. But mind you add only on your speculation that the test results would be positive.

Play things responsibly. Don’t worry about the drop in the market.

Cramer was bullish on AAPL yesterday, I don’t know, but my gut doesn’t allow me to buy it now. Just wait for that drop when we have it released. I feel we may get it on sale.

And how about getting some GOOG just around here at 500!!!!!Good luck to ya all


June 12, 2007 - Posted by | Blogroll, Future Buys, Holding, Long Term, Profited, Short Term

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