I bought back into Baidu.com, not even 2 weeks ago @ $316. Not a ton mind you, just a 1% position as the valuation makes little sense to me. I wrote
While the valuation makes me woozy, the lack of growth stories in this market makes me think (barring meltdown) the stock will have a lot of institutional support. The mantra seems to be, if you missed Google, well here is another chance to play Google part 2. Along with technical reasons (stock is holding its 20 day moving average very well), and this news of government tilting the playing field in Baidu's favor, I will restart a smaller type position. 35 shares @ $316s or $11K - this makes Baidu.com now a 1% position again.
Well, now less than 2 weeks later the stock is approaching my "end of year" mental target of $400. So I'll "bid adieu" (ho ho ho) at $390. Folks I broke every rule in the book here, buying a stock I found very overvalued (yes I love the fundamentals, its just overvalued as heck), and then selling a stock making new 52 week high and full of momentum (and probably will get a Cramer "buy buy buy" tonight).
But it's a 23.5% return in under 2 weeks. That's a year of return for most stocks. Just have to take that off the table and not be a pig. Maybe it goes to $450 on the Alibaba.com hype - who knows. I'll let the momentum lemmings take it from here; I was at least able to buy Baidu.com near a support level when I entered (20 day moving average). From here its running on hydrogen. I'll redeploy the cash into stocks trading at steep discount, you know stocks trading at forward PE of "only" 60 or something. ;)
It wasn't a huge shaker in the portfolio since it was only a 1% position but good enough. I've never had enough of these big cap tech names since the fund started - some great % gains but they did not have huge impacts on performance since the dollar positions were smallish.
Thank you Baidu.com, we'll see you in the portfolio again someday (lower I hope)
No position
