Two Articles and One That Makes Me Question Everything

Global markets were hammered today. Look for this to carry over big time into our markets tomorrow.

Today I introduced that I was adding two shorts to my portfolio. I actually think I am going to add a third but will at least save that for tomorrow and see really what is going to happen in our markets before I rush all into the short side of things.

Couple of good articles I came across while not working on Martin Luther King Day.

The first one is from CNN Money called, "Will the Cure Be Worse Than the Disease?" which pretty much echoes what I had said before this current rate cutting campaign started by the Fed. You may be able to skirt a recession now, or at the very least shorten it's duration, but the flip side is that you create a bigger mess later on.

But here is my main issue with this article....isn't it at the very least three and soon to be four cuts to late? I was all for standing firm and riding out the storm but now standing firm makes little sense. The Fed has already eased the rates, significantly. You have to continue down this road to it's fruition. You can't change the game plan now. The decision has been made. The time to stand up and not change the rates was back in September, not now. So while it is a good article, it's a few months too late.

And my friend Zach from Zach Stocks posted, "2008 - How to Profit by Sticking to the Plan". You have to love Zach's writing style, while at times a bit verbose for my taste, it is not so much filled will insider talk that it is inapproachable. His ideas are always well researched, fair, and balanced. And this little three point post is fantastic and really got me thinking. I understand perfectly well about staying involved with investing and not just looking at the numbers and panicking when the shares drop. But his first point, which probably should be the most obvious of all of his points really send me into thought.

Just what the hell am I trying to do? I went back to the start of this blog and read what I said that I was planning on accomplishing. Basically, it was to beat the S&P on a weekly, monthly, and yearly basis. But thinking about this and how this blog has evolved and how I have taken to looking at the markets through this blog.

I think that basically it has boiled down to 2 major areas.

1) I want to pick big companies that can are stable and positioned to take advantage of their current markets. My goal is to leave these names alone unless something truly changes in the fundamentals of the company.

Stocks that currently fit into that mold are PEP, PG, KO, and MCD. All these names you should know, Pepsi, Proctor & Gamble, Coke, and McDonalds.

My big miss here, Ford.

2) Stocks and EFTs that can take advantage of an immediate market condition. I have really focused recently on EFTs in this space, however, I have made plenty stock choices that have fallen into this category.

Stocks that fit into this category is Las Vegas Sands, Gilead Sciences, Bank of America. Yes, I include BAC here because I was hoping for a bottom and when I realized that it just wasn't there I sold out of the stock. I also chose QQQQ as an EFT to take advantage of the tech resilience at the end of 2007.

I took both Transocean (RIG) and Barrick Gold (ABX) really to balance out the portfolio. But come to think of it, I really liked the continued out-performance of oil (RIG) and believed that gold (ABX) would be a good hedge for some of the problems that I saw coming ahead.

I added two shorts (DOG & SDS) today based on my feeling that the markets are poised to see another 10% drop in the coming months based on the markets reactions to the president's bail out plan and the wording of Bernanke's comments on the economy.

My misses, DaVita.

So what does that leave? AGN. I picked Allergen wanting to have some kind of pharma company in the portfolio. The stock has performed well, showing a gain of 12% since I added the stock. But the basic question now becomes, do I hold onto it because I believe that the stock will perform well going forward or was I just lucky and get rid of it since I have no plan for the stock?

I remember doing the research when I picked AGN but ultimately I have forgotten what I really am looking for from the company.

I am going to go back and see what I really want from this stock. If I want to hold it, which category am I placing it in? My buy to hold or my take advantage stocks? If it falls into the second category, what will trigger me to sell the stock?

These are the things I need to know going forward. And as you saw in my picks earlier today, I am going to give a reason and a true time frame of what I am looking for in my picks.