Moving Bottom Up from the Heartland

One thing that I love about Wall Street is the different approaches investors bring to the table. Each investor/trader believes that his system will beat the markets.

In my opinion, this is what makes Wall Street unique. Can you imagine every single investor buying low p/e stocks? There wouldn’t be any low p/e stocks around!

Being a Contrarian Investor is going against the crowd and usually means going against what’s popular. But, what happens when the unpopular becomes popular? Let’s just say it is a good feeling.

Fortunately, one of the stocks in the WSL Portfolio has become popular right in front of my eyes. I wrote about Heartland (HTLD) because I thought Wall Street was selling off the trucking industry. In little over a month, the world has turned upside down, with the trucking industry being the top performer this past week and second best for the past month. The trucking index was up 14% this past week and 16% the past month. I think I caught a bottom.

Catching a bottom is what every investor or trader tries to do if one's plan is to buy low and sell high. No one has been able to successfully time the market on a consistent basis and odds are no one will, the key word being consistent. But, by buying out favor stocks in out of favor industries, you at least know you’re near the bottom. It reminds me of that one saying,”I rather be early to the party than never show up.” Or you can take Peter Lynch’s words:

When stocks are attractive, you buy them. Sure, they can lower. I’ve bought stocks at $12 that went to $2, but they later went to $30. You just don’t know when you can find the bottom.

There are thousands of software programs promising when to get in and out of a stock and none do it on a consistent basis. I can promise you Warren Buffett does not look whether “X” is selling above its 50 day moving average, all 3 arrows have turned green, or whether it has made a double top. I can promise that if a stock goes lower, chances are Warren is adding to his position.

An investor must have confidence in his research (assuming he does any) and the stomach to add to his or her position. In addition, patience is also required since there are no guarantees that a stock or industry will become favorable again.

We simply attempt to be fearful when others are greedy and greedy when others are fearful

-Warren Buffett

HTLD 1-yr chart