Stocks Are Down
The market seems to be down about 10% over the
last couple of months. Not a big deal -- I used this downtick to fill up my
portfolio, mostly with recommendations gleaned from the Motley Fool Hidden
Gems.
I've actually done quite a bit of
trading since my last stock post in January. I sold Sirius Satellite Radio
(SIRI) short at $6.51, but I've already covered it at $4.99. I don't normally
like shorting stocks, but when I see a highly overvalued stock that looks likely
for bankruptcy, I consider it.
I bought
Montpelier Reinsurers (MRH) at $33.15. It's done nothing. I acquired Deckers
Outdoor (DECK) at $21.99, but I've held it for less than a week. Same thing for
Ark Restaurants (ARKR), acquired at $27.51.
I bought WebZen (WZEN), an Asian
videogame company, at $6.29 in January, and it's already down, um, 20%. In
March I bought Lakelands Industry (LAKE) at $19.89, but it's already down 30%.
I'm not sure what I was thinking. I also bought Petrokazakhstan, a Russian oil
company, at $38.88, and it's down 30%, too. I suck! And to top it off, SMTC
Corporation (SMTX) at $1.14, also down 30%. And I added to my holdings of Acme
(ACU) and QLT Phototherapeutics
(QLTI).
I don't pretend to understand
macroeconomics enough to predict the future, but I am concerned about the
gargantuan trade deficit, as well as the huge government deficit. It seems to
me the dollar is largely being held up by pure force of will by Asian countries
that have too much invested in the dollar to just let it collapse. Our
adventure in Iraq could certainly be worse, but it shows no signs of ever paying
positive dividends, either financially or
politically.
Oh, and I shorted
Blockbuster Video (BBI) at $10.10. I love Blockbuster, and use them regularly,
but it seems to me that they're wasting a lot of money attacking NetFlix's mail
order business, and anybody can see that in 10 years DVDs -- and all physical
movie media -- are likely to be obsolete, so both NetFlix's and Blockbuster's
business models seem doomed. Download will be king, and they've probably got
too much invested in the status quo to jump to that market enthusiastically
enough to be successful. It's stupid for them to be losing money fighting for
market share in a temporary market.
If
the market keeps going down, I'll keep buying stuff.
Filed Sun - May 1, 2005, 04:15 PM in
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