Everyday Finance Portfolio Update for January 9

Following an abhorrent opening salvo this year, the market finally reversed course and delivered returns of 1.2% for the Dow, 1.4% for the S&P500 and Nasdaq Composite. This was following eight, yes 8 consecutive down days.

This is especially timely for me, since I sold my remaining two (QQQQ) Jan 49 puts Tuesday. I can't claim to be a clairvoyant, but I feared losing them to expiry since they were barely in the money, so I was able to lock in a few hundred dollars in profits during the carnage. On this topic of options on the Nasdaq, I'm still riding out 5 QQQQ Jan 57 puts that I had sold a few months ago. So, at these levels, I'm virtually assured full capture of the premiums there for another few hundred dollars (right now the bid/ask is at 0.01!).

I've also been deficient in my duties in posting a few recent trades since, both good and bad. I got a little carried away with last night's post. So here are the recent ones as evidenced out of the Ameritrade account (some of these are small trades in dollar terms, just unwinding positions to zero), followed by some commentary:

01/08/2008 15:54:58
Sold 2 QQQMW @ 2.11

This was good to unload these puts yesterday. Could have timed a bit better since the market really tanked in the last couple minute or two, but who's counting?

01/08/2008 13:35:24
Bought 20 (CRL) @ 66.71

I bought into Charles River Laboratories, it's up marginally since purchase. I will do a full post with research and analysis, but basically, I was very moved by an interview with the CEO earlier in the day on CNBC and the presentation at the JPMorgan Bio conference. They have an incredible business, they're growing at breakneck speed, they're investing in the right areas (not missing the boat on India, China, etc.), and they have something BioTech and big Pharma needs - CAPACITY AND SPEED - for preclinical testing, development, and many other early stage services.

I sold my stake in Akeena Solar (AKNS) that I bought a few days earlier.

The Good: The stock closed at 10.22 Wednesday. This saved me a few hundred bucks.

The Bad: I bought at 14; I didn't do ample research, I tried to play the trend. During the past year, the phrase, "The trend is your friend" has in fact been very friendly to me to the tune of a ~50% return last year in this account. However, jumping on after an 80% runup in the middle of a market correction was a bad trade. I quickly admitted my mistake and got out.

01/04/2008 11:22:05
Sold 6 (WYNN) @ 103.8001

I sold my remaining stake in WYNN resorts. There was a nice runup in 2007 following my purchase, but after a return to baseline and continued news on disappointing growth in Macao, I think the momentum's gone on this one for a bit.

01/04/2008 10:31:56
Sold 20 (CROX) @ 35.25

After a pretty decent return on CROX overall by selling most shares in the summer and fall of 2007 following a healthy runup, I capitulated and sold last week, recognizing the death of a fad. I actually think there may be another return to glory in a quarter or two when new product lines take off, but I think there's continued downside potential here. I sold out at 35, the stock closed at 28 today. Good riddance!

01/04/2008 10:23:26
Sold 20 (BGC) @ 67.51

As posted previously, I sold my remaining stake in General Cable Friday as well. The stock closed today at 61. Again, decent timing, but should have sold even earlier.

12/10/2007 12:12:12
Sold 7 (GRMN) @ 111.7901
12/18/2007 12:00:16
Sold 8 GRMN @ 92.6001

These two sales document my exit from Garmin. Again, the trend was not my friend, Garmin has simply started to encounter too much competition in a pretty competitive market (now cell phones are starting to come with GPS!). Overall, I had some great gains on Garmin during 2007 and while I would have loved to have sold at the peak, I got out with my shirt. The stock closed today at 76!

So, bottom line is, I was able to lock in a fair amount of gains, hedged a bit to recover close to a thousand dollars on the way down, but I was still too long overall for this recent correction. I'm gradually moving into investments which will require less active management (like (PBW)) and lower correlation (considering (PCY), and I've posted plenty on Prosper.com).

I would classify today's rebound as temporary and perhaps undeserved. I need to rehedge; I'm considering Feb puts and perhaps just buying some Ultrashort Proshares. Until next time!

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