Thursday, December 20, 2007

Bookkeeping: Adding to LDK Solar (LDK)


Well as expected LDK Solar (LDK) is all over the place. It was trading at $70 yesterday, late in the day. I was hoping to get some at $60 and if the market gods were extremely good to me, adding at the gap in the chart at $46.

For now I will be very content to add in the low $50s. I made a series of buys to take my position from almost nil to 2.5% of the fund (I bought a lot)

I bought 3 lots - 420 shares
smallest in $56s
middle in $53s
largest in $52s

If we get a drop to $46-47s I will add more. Again this is the danger of holding a stock with so much fast money in it - when they all try to rush out of the exit at once or the move works against them the stock can implode.

As the chart shows, anything over $45 still keeps us in a nice uptrend. I could of bet earlier and bought ahead of earnings but this takes us from investing to 'gambling' - 50/50 odds up or down. That's against the whole point of being in the stock market as opposed to sitting at a craps table. Now by waiting for the outside audit and the earnings report/conference call I have more information and can make a much better analysis of where LDK is going in the next few quarters. I could still be "wrong" in my analysis, but at least I have more information. It still might take some time to shake out some of the newer players to the stock, but I am content with this size position for now, and as I said above if we see further weakness I will be adding more in a move down to the $40s. Further, this is a very overextended sector ripe for a pullback so we could see some near term weakness. But that's what the big cash position is for.

Long LDK Solar in fund and in personal account

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