Well this is one of my favorite tracks out there right now by the artist Cassidy. If my investing right now were phrased as a remix to this song it would be "I had too many drinks and made a MIS-STEP!"
I say this because all good analysts must own up when the make a huge mistake. My big mistake would be holding onto Rite Aid for way too long. So here today I would recommend that you reduce your holding or sell outright RAD. I think the turnaround story will take a long time to develop. I am playing the fence and say if you have years to wait then this will be a nice play...if you keep dollar cost averaging down. RAD can be picked up at these prices for $3.5 a share. So I've admitted my mistake or mis-steps and would recommend getting off the RAD bandwagon.
Next, is a lesson learned about the power of the market. Remember one of my rules to investment that I speak of very often is "sticking to your strategy". Well, I broke that rule yesterday. I was reading up on stocks that may be big momentum movers and I got in on the wrong side of a trade. it was an industry that made sense, Electronic Retailers...specifically video games. The stock was GameStop (GME) and I wanted to get a jump on a stock that all of Wall Street said was going up during the earnings call. Don't believe me, do a quick search for GME and read the articles leading up to their earnings release. So I bought GME, the earnings came out, they numbers were great for the quarter, but they communicated that their next quarter won't be as good. This began the sell-off of GameStop and I had to get out of my position. So I took a nice hit, but I had to get out of this bad investment.
The bright side is that I will remain firm in my little old strategy from college that has produced BIG sized gains. I repeat to all of you young and new investors out there to stick with a strategy, and enhance it over time but don't try to be something that you're not. Warren Buffet taught us that when he didn't invest in technology stocks during the technology boom of the 90's. It wasn't something he was good at so he stayed away. So no more stock chasing for me on raggedy Wall Street preictions!!!
Now back to proof that our strategy is a beautiful thing. Check out the performance of our most recent recommendation. Online Resources (ORCC) has moved impressively to the upside to gains of almost 10%. This is a positive sign because currently the markets are in steep declines each day. And when you have a stock that is moving up during down market periods you've got a strong pick.
And now for my 2 NEW URBANOMIS PICKS:
I am re-recommending ZHONE TECHNOLOGIES (ZHNE) as a BUY @ $1.25. Do a quick search here on my blog and you will see that it was originally recommended at $1.10. If we were long term holders (like we should have been), we would still be owning the stop and adding to our position. But we took the nice gain and ZHNE has come up again in my stock screen. I love this play because one, we have seen positive momentum when we previously owned it and we are seeing that same type of activity again.
Next, i am recommending MedCath (MDTH) @ $22.45. I love this stock for all types of reasons. The first would be that I realize that my investing strategy often leads me to undervalued plays and beaten down stocks. MedCath appears to fall into the beaten down stock play. After reporting 4th quarter earnings this stock took a big hit. I believe it dropped from the range of roughly $26 dollars to around $22. It is also a healthcare play which is always a great play with the surge of baby boomers across the country. My buy price is listed above, the stock could have be bought TODAY at @22.25...but note it is beginning to move to the upside.
Honesty is the best key, so my job is to keep it real! So enjoy these picks.
Disclosures:
I sold Rite Aid for a 16% loss
I bought and sold Game Stop in the same day for a loss
I bought Zhone Technologies @ the BUY price listed above
I bought MedCath @ the BUY price listed above
I already own ORCC at the BUY price listed in my previous post
No comments:
Post a Comment