Monday, March 10, 2008

Stocks for March 10, 2008

I'm composing this in the Chicago O'Hare airport. It's snowing with light flurries now. Watching them clean a plane with a modified firehose applied from a cherry picker is a site to behold, with billows of steam rising up. I had a presentation yesterday (which I think went quite well, thank you).

I have been listening to WNUA (FM 95.5). WNUA ( streams a strangely familiar blend of smooth jazz and hits from the '70s.

So this is what Easy Listening has become. I think I'm getting that gray-at-the-temple feeling.

Here is my new weekly list of stocks passing three or more filters.

SymbolTop RankedZacks PEG SuppDem VLIBD Stock checkup
PCLN1 111A+
RIG111 1A+
ISRG1 1 1A
MA111 A
RIMM1 1 1A
VIP111 A
AUY1 11 A+
BUCY1 2 1A+
CLR111 A+
POT1 1 1A+
TNE111 A+

A new stock on the Core list is Bucyrus International, Inc. (BUCY). Bucyrus designs and sells mining equipment such as rotary blast-hole drills. These stocks are off the core list:

  • AMTD
  • CF
  • CLB

Core list (with n of 10 weeks passing):

SymbolPassing weeks Earnings
DE5Earn 14-May
MOS5Earn 4-Apr
SWN5Split 26-Mar
BUCY5Split 26-Mar

Another down week, with the indices reaching 18-month lows. I thought we might see a bounce off the lower Bollinger Band this week, but the slide continues unabated.

A particularly difficult holding for me is Thornburgh Mortgage, which I bought on the recommendation of a newsletter. (A quick note: I do not blame the newsletter editor, who has generally been quite good; I take responsibility for my trades, both good and bad.)

Anyway, TMA had been trading in the low $9, and enjoyed a remarkable gain to $12. I sold $10 calls against it. Last week, they got a margin call, that is, their creditors asked them to cough off more collateral. They were unable to secure short-term loans, and the stock plummeted from $12 to $9 (last week) to $3 to $1.28 (Friday), an 86% drop. Ouch. According to a WSJ article (Sat Mar 8, p. B1, written by Lattman and Smith), their average mortgage holder has a credit score of 774. But a business such as theirs cannot survive if Goldman Sachs, ING, and JP Morgan Chase are seizing their assets. Their Chief Executive, Larry Goldestone, is quoted as saying, "Quite simply, the panic that has gripped the mortgage-financing market is irrational and has no basis in investment reality."

Trim back those winners and wait for an upturn in the Nadsaq MACD before venturing back into the market. The gold and energy stocks are doing quite well. So are the ultra-short ETFs.

We may see a bounce; this is to be expected in a bear market. But don't go very long and offset your longs with short positions. Enjoy trading this week.

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