All Fund Holdings Updated Mid October

Much like a mutual fund sends quarterly reports which shows all their holdings, I will do a comprehensive display of all positions once a month. September's break down can be found here. This time I put it all into Excel and brought it into the blog so it can be shown by weighted dollar amount, and % of fund, instead of just the stock symbol/sector like I did in September. As always the top holdings (all those >1%) can be found in the right margin of the blog, and I update that at least weekly.

For purposes of this analysis I broke foreign holdings into 3 categories: (a) China (b) India (c) All other

Looking at the breakdown below, I have to say this would of looked very differently just a week ago. Some major changes created by the recent market swoon

1. A large increase in energy exposure - while I did cut back on Trina Solar (TSL) this week, I added to the deep sea oil drillers earlier this week (which hurt Friday), and then added back to my oil service trio heavily on Friday. I also added Bolt Technology (BTJ) and CGGVeritas (CGV) late this week. Until I did this analysis, I was shocked to see the energy exposure up to 28% of the fund. That's a bit too heavy for what I intended; and with the potential for oil to drop to (gasp) $78-$82 I am sure the market will throw the baby out with bathwater. Remember my positions are not exploration type of stocks whose prices rise and fall with the price of crude. But in panics markets don't differentiate.
   
2. India was increased this week. I am a bit wary of increasing any further simply because emerging markets are very overextended and prone to falling but (a) this week's scare in the Indian markets created some opportunity and (b) these companies continue to execute as shown by ICICI bank's results Friday.
3. I was underweighted infrastructure and mentioned last weekend, I wanted back into these names on pullbacks. While this was not a major pullback, it was something so I have started re-establishing larger positions. Infrastructure was the biggest sector of the fund back in August and early September, before I prematurely pruned the names back. It is now back to 10% of portfolio and if the market drops further, and creates even better prices in these stocks I'd like to get that to 15%+.
   
4. My short positions are down to 7.3% of the fund; this is the lowest in a while as I let go a lot of my short positions in layers into the Friday selling, letting go a big blast in the last 5 minutes of the day. Again, I cannot short companies directly - if I could I'd be directly shorting financials, homebuilders, retail, and restaurants. So instead I need to rely on these short ETFs which are sort of blunt instruments instead of fine tuned combs. With that said, on day's like Friday UltraShort Russell 2000, and UltraShort Real Estate were up 7%, and UltraShort Real Estate was at plus 6.5%. Markets usually don't go straight down so I'd expect to see some bouncing next week and into that I will re-establish some of these positions.
5. I applied a lot of cash Friday as well - I went into the day at 14% and now below 6%.

Other thoughts:
Overall without a lot of direct exposure to the hottest part of the market, China, I was able to do very well these past 4-5 weeks. Any fool could of bought the 5 largest Chinese stocks trading in the US and done well I suppose this past 6 weeks.

Most of my exposure is in some way related to global growth so the risk now is the fear factor that global growth will slow due to US economy heading to recession. My thesis is that if China and India and Brazil drop down to 5-6% growth, the stocks in my portfolio will still be outperformers; however with 9-11% GDP growth in those countries, I don't think a lot of people are positioned for any type of slower growth in emerging markets as they are priced for perfection. So US companies who rely on foreign growth could unfairly be beat up. With that said, where are you going to invest for growth if US companies are slowing and you feel global companies will slow down due to slower growth in emerging markets? You won't have anywhere to park your money.

That same theory (slowing worldwide growth) could hurt crude oil price 'perception' as well, if not reality. The reality is entire cities are being built and entire populations are moving from rural to urban - so for every Prius we buy here in America to save a tiny bit of energy, it is getting overwhelmed by the demand dynamic by emerging markets. These minor energy saving initiates we do here are like handing a person on the titanic a bucket and saying, start bailing out the water.

Throw on top the nationalization of energy companies and this hurts supply even more i.e. Venezuela has been producing less crude as they have kicked out international majors; Iran sitting on some of the largest crude deposits in the world has to import GAS since their refining infrastructure is in such disarray. So while this is a crowded trade and needs some gas let out of it (pardon the pun), once the chicken littles of "oil to $55" get done clucking, we will go back to reality. As you see I don't have any exploration companies - so crude at $62, $72, or $102 doesn't matter to me. Short of crude going to sub $50 I don't see budgets being pared back for deep sea oil drillers, oil services, et al. That doesn't mean the market won't panic and throw these names out the window if crude dare go back to where it was a few months ago (gasp, the $70s?) Another reality, crude is priced in dollars - with Ben taking us to 4% (I truly believe it) within next few meetings, I don't see any salvation for our dollar - and that pushes up price of crude. Sooner or later world populations are going to want crude taken off the dollar standard.

The two areas I have been missing (aside from direct China exposure) are the mining companies and dry bulk shipping - the former I believe is more exposed to 'worldwide slowdown' fears, and the latter appears to be in a bubble itself (also relying on world GDP growth to infinity). Hence, to be insulated as much as possible by any worldwide slowdown talk - I'd rather be in agriculture because once you let the genie out of the bottle (rural to urban migration, better living standards) there is no going back. So while copper/base metal prices (within a long term uptrend) might suffer a bit (near term) if perception is that worldwide growth will slow, we will still need more food. Hence I am favoring these fertilizer companies even more each day I mull the future direction of the fund. And I'd still say the long term commodity bull is there in mining names as well so a correction in those names would be a great buying opportunity for a 3-5 year view.

Julian Robertson Calling for "Doozy of a Recession"

Since I am not in front of a TV or CNBC during the day I don't know if this helped to cause the market to further weaken, but legend Julian Robertson had some bearish comments on Friday. There is a 3 part video found here at this link if you'd like to see the interview in its entirety. Again, this is one man's opinion; but a very smart man, and a man who has had billions of investors money in his palms over the years. He is up there with Buffet, Soros, et al as one of the best investors of the past few generations.

• Hedge fund legend Julian Robertson said Friday he expects the U.S. economy is heading for a "doozy of a recession."
• "I think we are going to have a doozy of a recession," Robertson told CNBC's Erin Burnett. "I think the credit situation is worse than anybody realizes, and...I think we're getting little inklings of that. I don't think any of the normal indicators you would look at in the economy are really very strong. As a matter of fact, they are weak, and not really getting any better."
• Robertson, founder of the investment firm Tiger Management, also expressed some concerns about the devaluation of the dollar. "I think the Federal Reserve will trash the dollar until such times that there is some turn around in the economy, or until such time that they see that as self defeating," he said.
• According to Robertson, Bernanke is doing what he can to help the economy. "I think in a sense, he is trapped in the sins of his forefathers," Robertson said. "I think he is doing exactly what he can do: ease ease, ease; cut, cut, cut; print, print, print."
• Robertson is credited with turning $8 million in start-up capital into more than $22 billion at the peak of the tech boom.

Again, 1 data point but what I find is a lot of truth from old men with no stake in the government's happy go lucky song and dance. Even Greenspan, now that he can say things he could not as the Fed Chief makes a lot more sense, and sounds a lot more dour. Old men are cool like that. I also do think Uncle Ben is trapped. We have to print our way out of a recession and push the bubble along to a new place. Somehow to keep the US consumer going we need to reach a new nirvana of interest rates low enough that they can recapitalize their debt into new Adjustable Rate mortgages. The problem with that is home prices are falling. Oh brother.

As I keep saying, why is there ANY doubt we won't continue to be cutting? I am blown away smart money was up until Tuesday pricing in only a 1/3rd chance of a cut on Halloween. 4% is the minimum we are going; certainly could go lower the economy really starts to weaken. Watch those job numbers in the next 6 months (and no don't watch them when they are released, watch them on their 6th revision when the true number is released) In fact, strike that, ignore the government numbers (even though the market won't) and just read the job cuts from company after company in their press releases.

Wachovia, AOL, Boston Scientific, King Pharma, GMAC, Novartis, Intel, Johnson & Johnson - its not just financial companies.

Et tu Redux!

Back on August 31st, I penned an entry called Et, tu September? in which I outlined the real issues affecting the economy. The market proceeded to ignore everything I outlined and rally for 6-7 weeks straight, given its most juice by the 9/18 Fed cuts. So while keeping those economic thoughts in mind, I realized I had to switch to a "let the market dictate your moves" thought process, or risk being left behind. But I like to revisit these thoughts every few weeks to see what has improved/gotten worse since then. I really don't see much improvement in the vast majority of the line items listed below.

Since August 31st the changes have been

1. Housing correction continues, and continues to intensify
2. Home builders are now doing "Sales of the century" to slash prices, and get rid of inventory - this pressures current home owners to lower their prices - home owners who previously were in denial about what their house should sell for.
3. As the 3rd party market for securitized mortgages dries up, lenders are forced to keep loans on their books as opposed to slicing/dicing and packaging to some fool in a European bank or a hedge fund, so they become MUCH more conservative and hence the SUPPLY of buyers (those with both ABILITY and WILL to buy a house) drops considerably.
   
4. Bush had come out with a limited bailout scheme at the time; since nothing gets done in this country politically that has dropped off the face of the earth. Has anyone heard more about it?
5. House as ATM drag is now starting to show in retailers numbers; Credit Card as ATM is now what stressed consumers has changed to. This cannot end well.
   
6. Grocery inflation now showing even in the government numbers which massively understate the situation. European central bankers acknowledge this, but US central bankers continue to deny any (major) problem. But real people with real budgets know what is happening.
7. Commercial paper market did improve but now appears to be slowing again. Treasury yields dropping like a rock again this past week as credit crunch concerns mount.
8. "Free market" economics takes another hit, as large money center banks need to create a fake customer (themselves) to buy the crap that no one else in the world will buy. Once again showing free markets are great on the way up, but all the free market proponents scramble for "non free market" solutions, once the free markets (nearly free of regulation) screw things up. Who pays? Everyone. Who benefits? Those who took the massive risks. Paulson and co. continue to deny any moral hazard. Now we trot out the excuses that we must 'protect' these banks because any major blowups will hurt us all.
   
9. I mentioned construction, mortgage, financial jobs - you are seeing the cuts. I am even seeing cuts in areas outside of this (did you see that even Intel was cutting jobs; it got lost in the hoopla about their earnings number). As the US economy slows even those multinationals who are benefiting from the flailing dollar are going to be cutting back their US operations. Who pays? US workers.
10. One of my favorite calls was this: "Earnings cuts in the financials - just started getting downgraded this week by the analysts - how are they even going to be able to provide guidance in October when the location of all this credit risk is in many ways unknowable (how do you tell what % of loans in a CDO you own is going to default in the next 2 years?) We are probably looking at earnings revisions down #1 of a multi step downgrade program in these names." Since then what happened? A few weeks ago the banks "came clean" and did their kitchen sink quarter, which I smugly laughed at to self. Market cheered; market went up - everything was 'contained', 'now we know the scope of the problem' they said. Not so much. This Monday we come up with Super Bailout fund; something we obviously would not need if everything was 'contained' and 'measurable'. And financial companies who don't have the black box mechanism and mark to model mechanisms of the investment banks are now showing us the reality. And again, how can they forecast the future when many don't even know what exactly their exposure is? Both Paulson AND Green...err Bernanke have said we need to better transparency in these 'innovative' financial products. Where were they 3-4 years ago in the middle of the party? Why did we not need better transparency then? Oh I know - in the middle of a party you don't want to do anything to break it up.
11. China bubble only inflating more. A market based on earnings that if based on US GAAP would have 40%? 50%? less earnings? And with companies inflating their earnings by investments in stocks - not operations. Like I said the next drumbeat you will hear in the upcoming months is "can emerging markets continue this growth level with a possibly US recession" Bulls will tell you the US is irrelevent or close to it for emerging markets; and bears will say look for negative growth in China/India/Brazil with US recession. Obviously the truth is in the middle, but the question is, is this market pricing "in the middle"? Or is the Chinese market pricing it? For that matter the Chinese market is not pricing in any negative and with its closed market we cannot use it to try to make sense of anything, but we can use Hong Kong which has DOUBLED since August. See my post here from August "The Case for Hong Kong" Well at this moment I am going to change my stance near term; with the market up 50% since August and the mania in China, any fears of US slowdown effecting emerging markets won't necessarily hit Shanghai because people there apparently live in their own world (see "Shanghia the Mystical Land of Premium Valuations", but it will effect an open international market like Hong Kong. Hence while bullish long term, I am pulling in the reigns near term on Hong Kong.

Below is the original post. (please note at the time Ben had not cut by 50 basis on the Fed funds/discount)

But this is the ledger as I see it, and the roadmap ahead:

The Bad
* We are in inning 2? 3? of a housing correction
* Home prices are sticky; as homes are illiquid. We are just now seeing the first serious falls, and these drops so far, seem minor versus what should be coming down the pike in the most overheated of markets, as prices are so out of whack with income it's silly.
* The supply of buyers is constrained by much tighter mortgage standards - leading to pure economic theory, less supply of buyers, increasing supply of inventory = not good for prices. I mean really, who can afford a $500K mortgage in CA with a fixed rate of 6.25% fixed? That's a $3100 payment, before property taxes. There are only so many people in this country who can afford that. I'd argue a very small amount. Oh and did I mention jumbo rates are north of 7%? I am being generous with the 6.25% rate. The same example applies to the $400K mortgage in Seattle and northern Virginia, New Jersey, Hawaii, Boston, the $350K mortgage in Arizona, Nevada, Maryland, Chicago, Portland, Denver. Where will these people come from? When they cannot resort to interest only 2/28s?
* And after we bail these people out (not with Bush's plan, but with the next generation of Bush's plan that will need to be created), who is going to be able to afford to buy those homes when these bailed out owners want to sell? Or after the bailout will they be content to sell for $150K less?
* When people even in good financial shape see weakness in housing they also naturally get cautious and retrench on their plans to buy, and this feeds on itself (you go first... no you go first... no you... someone buy this house!)
* The retail "my house is my ATM" play, seems to be over. Retailers already foretelling this; remember stocks are discount mechanisms for the near future (6+ months out). Yes people have been calling this for years, but our consumption culture has always made them look like fools. But with the spigot of the ATM as a house now truly gone, people won't be able to refinance their credit card debt into a new mortgage. (and keep repeating every 2-3 years)
* Even those people who have no plans to sell their home, feel poorer on paper, and hence have natural tendency to tighten spending when feeling less flush in cash, even on paper.
* Same point above but in regards to stock market gains - how will they feel with a potential 15% correction in stocks? More retrenchment?
* Grocery inflation as this ill begotten push for ethanol (using inefficient corn) is rifling through feedstock, corn syrup and any of the thousands of items which use corn as a basis, and now seeping to the end consumer.
* Commercial paper market still extremely dysfunctional
* Bush's aid plan is going to help less than 100K out of millions who will be suffering in the home market
* The fact that free market Bush is even alarmed enough to come up with any sort of plan. Free markets are great... until something goes bad, I guess. Even for Republicans.
* Construction jobs - they are going to be accelerating into an abyss. Granted, some portion is illegal workers who were never on payrolls (official ones, that is) in the first place. But this is a trailing indicator. Who needs more homes when inventory is >9 months, on the way to ? 12?
* Mortgage jobs - huge cutbacks already announced and will be filtering through the future unemployment reports
* Financial jobs - we should start seeing lay off notices soon enough (next week?) I already read that across the pond there are cuts in credit departments already hitting. If we go back to pre 2004 levels of 'credit' (revert to the mean?) what does that mean?
* For those that remain, their year end bonuses will suffer. This year will be down, but NEXT year looks to be really down, as entire departments will no longer be needed/existing. What does this mean for the NYC and affiliated areas high end real estate market? I know, I know, those poor millionaires...
* Earnings cuts in the financials - just started getting downgraded this week by the analysts - how are they even going to be able to provide guidance in October when the location of all this credit risk is in many ways unknowable (how do you tell what % of loans in a CDO you own is going to default in the next 2 years?) We are probably looking at earnings revisions down #1 of a multi step downgrade program in these names.
* Internet ad spending down as financial companies provide a large bulk of it. Could Google disappoint? Psychological blow of all blows - the teflon stock of our era missing?
* China looking like an exact mirror to NASDAQ 1999-2001? New bubble? The Shanghia Index over 5000, was only 4000 just over a month ago, and almost 100% up in 6 months? 50 PE on an index? Oh and a large portion of those earnings are investment gains, not operational earnings. With a country full of newbie investors who have never been through any bear market? Remember what happened when China fell just 7% in Feb 2007.

I could go on, but I am getting depressed....

The Good
* Big Ben has a mighty white horse and has been shining his armor and is ready to arrive and with a simple few cuts, will solve all problems
* Presidential candidates will be jostling to propose bailout after bailout, inciting moral hazard issues up the wazoo. (It was a stretch to put this on the good side but I needed at least 2 items to consider this an official list)

And I think that's about it for that side. I guess you can throw out the 'natural resiliency of the US financial markets and economy' but will that really be a salve in next 6 months?

Conclusions
Now I like Ben; in fact so far, I like Ben a lot. I think "come to the rescue" Al would of cut at least twice by now and maybe even a 50 basis thrown in there for 1 of the cuts for good measure. Heck, the market could of been at 15K by now if Al was still around. But that would not erase what is going on behind the scenes.

The one pillar that has been the bullish bedrock is employment. It's still at a high level; the unemployment rate still is low (granted many people are underemployed and working 2 jobs to pay for groceries and energy costs), but this is the number in my book to watch. With the financial industry from mortgages, to construction, to fancy investment bankers all at risk now.... hmmm. And with every lost job is a small ripple effect on other parts of their local economies.

So I guess it comes down to:
101 reasons things that could cause downward dislocation and potential 08 recession or at least dramatic slowdown

vs

Ben on a white horse along with government bailouts by frantic politicos who keep asking why does something like this happen every 5 years (answer: because the people buying you... err paying for your election drives generally profit from these excesses, and hence we never get preventative measures, just reactive and far more expensive 'solutions' after the fact).

The Velocity of Downturns

One signature of recent markets is how downturns, in general, happen in a much more constrained period of time than moves upward. I touched on this in "Buybacks Continue at Record Pace" last weekend.

And our pullbacks will be shorter in duration, rarer in nature, and perhaps more violent as the movement down is compressed into weeks versus months. Perhaps.

So when we have weeks like we just had we have to ask ourselves, would it of felt so bad if this sort of downturn happened over 3-4 weeks, rather than 1 week? Instead of getting hit for 1.5% down on Mon-Tue, or 2.5%+ on Friday alone, would we have felt such trepidation if the moves were -0.4%, -0.6%, +0.8%, -1.0%, -0.3% over the course of a week, for 3-4 weeks in a row? Probably not.

I spent some time looking at the major indexes and to put it in perspective we have effectively erased all gains from the post Fed cut. At 13,522 we are right back to where we were before 2:15 PM on September 18th, when the Fed decision sparked a massive run. All the glee and cheer that the Fed can bail us out of every problem afflicting the economy? Apparently erased. I kept mentioning this was like a keg party and enjoy it while it happens and lock in your profits, because it made little sense considering "why" the Fed was in such a rush to cut so severely. Now, at least in the indexes, if not in individual names - those gains are gone.

How violent is the downturn in relation to the upturn? It took 18 sessions to rise from 13,500 to 14,280 - a gain of 5.8% to take the Dow to all time highs (reached last Thursday before the late day intraday reversal). It took only 6.25 sessions (I am counting the last quarter of a day last Thursday) to erase it all, so a 3:1 ratio from time frame to go up versus time frame to go down. While the numbers are not exactly the same in the NASDAQ, S&P500, and Russell 2000, the scope and direction are identical.

So the takeaway is, while this feels bad emotionally, would you feel the same emotionally if the downturn had taken place over 3-4 weeks rather than just over 1 week? The ability to keep emotions out of your investing as much as possible is key, so try to keep that in mind. As I mentioned last Thursday, these 1 day reversals generally (not always) mark a change in psychology - we had one on August 16th (magically the day before the 'surprise' discount rate cut by the Fed aka surprise to us, not a surprise to 'someone'), and the market went on a major tear for 2 months and we had one last Thursday and thus far, we've lost 5.5% or so in a blink of the eye.

Bookkeeping: 'Rising Tide' Performance Week 11

Week 11 performance of the mutual fund

Comments: Well needless to say this was a tough week in the market. The indexes I follow fell 1.5% through Tuesday, started off terribly Wednesday before staging a late day rally to close flat (on hopes of more rate cuts). Thursday was incredibly boring (the calm before the storm) and today we got the tsunami with the indexes I track down about 2.5% today alone (Russell 2000, which are smaller stocks was down a whopping 3.2% today alone).

With that said, I am very pleased with how the fund fared. While today was a tough day, for the week Rising Tide Growth Fund was down -1.83%. This compares to a weekly drop of 3.9% in both the S&P 500 and Russell 1000. While I hate losing money any week, this is still a massive outperformance of over 2% for the week. So the fund continues to pull away from the averages, with a combined >5% outperformance in the past 2 weeks. Again to put that in perspective in weeks 1 through 9, the fund was beating the indexes by a healthy 4%. In the last two weeks, its tacked on an additional 5%+. Considering the carnage left strewn out there, I cannot complain. Only 2 more weeks until the first quarter of fund history is complete, and thus far being a fund manager is pretty cool.

What helped this week was a move to caution late last week, going to a heavier than normal cash position along with higher short ETF positions - I also locked in a lot of gains in my top performing long positions. Most of my remaining long positions still performed very well Mon - Thursday. Friday almost everything was thrown out. Top holding LDK Solar (LDK) put in another awful week, and continues to be a drag on the fund.

Price of Rising Tide Growth: $11.227
Lifetime Performance to date (vs Aug 3, 2007): +12.27%

Comparable SP500: 1,500.5 (+2.41%)
Comparable Russell 1000: 817.8 (+2.71%)

Fund return vs SP500: +9.86%
Fund return vs Russell 1000: +9.56%

Last week's results here.

Since the market cap of the median stock in the Rising Tide Growth fund (median $9.9 Billion as of October 07) is significantly below the SP500 index (median $13.1 Billion as of September 07) but higher than the median market cap in the Russell 1000 (median market cap $5.8 Billion as of September 07), I am measuring the fund against both indexes. Click here to see fund's holding by market cap as of October 2007.

Basis for indexes is 5 day weighted average of closing prices Aug 3-9
SP500 : 1,465.2
Russell 1000 : 796.2

To see why I use the 5 day weighted average of the first 5 trading days to smooth out the volatility of the indexes as the fund launched, see here.

Please click here: fund performance for previous updates

Throwing More Short ETFs Overboard

Ok this looks like lemming behavior now; I sold some more short ETFs in the last 5 minutes here as we close an awful week out. And continued to add to the infrastructure names in the 3rd round of buying those names today.

Markets were down 1.5% combined Mon/Tue, flat next 2 days and looks like we are going to end with another 2.5% today, so about 4% down week. Should make for good fodder for media - 20th anniversary of 87 and all.

How quickly we go from euphoria to panic. Humans... amazing creatures. I will update my weekly performance here in about 30 minutes as Marketocracy.com's data is delayed by 20 minutes so I am curious myself to see how bad the carnage was today.

Honestly I am really happy to get the prices I got today in names I was buying, although I know full well they can go lower. When I compare the prices I was "happy" to buy today versus the August lows though - that's a bit scary. ;) But this is why you need to build a good result when you have the wind to your back; to offset times like this, when only a knife is in your back!

Welcome Back Home Baidu.com (BIDU)

Reader msb pointed out an article here, which I read last night here, discussing Baidu.com which in a nutshell shows those Chinese capitalists are not so cute and cuddly when it comes to competition. Here is the story with China; they have our **** in their steely grip. What are we going to do about it? Not much other than jawbone. They know it. We know it. It's their ball and they can go home with it. This might be an isolated event (or not), but point is, if the state is behind you, I (as an investor) will be putting my cards on you. Right Halliburton (HAL)?

Therefore off this news and a decent chart pattern (and strength today), I am restarting Baidu.com (BIDU) into the fund. Don't ask me about the valuation because I won't tell. ;) With that said, I can make a valuation case on 2009 earnings (cough cough).

I had originally bought in the $166 range and added in the $189 range in mid August, and sold out my last piece around $283 September 21, thinking $300 would be a psychological area that the stock would stall out at. Wrong. $360s soon followed. I never had a ton due to valuation so it did not make a great impact on fund performance but it was a nice % gain at least...

I wrote back then:

I am completely exiting my Baidu.com (BIDU) position at this point. While the general strategy of the fund is to never completely leave a position it likes, (but instead to lever in and out of names as they go up and down).... since the stock can continue to run far past what one might consider legit, this one has just risen too much. I never had enough Baidu.com in retrospect judging from the magnitude of this run but the stock has risen >20% in 5 sessions ($230 to $280), and is up enormously from my purchase points on Aug 10th (upper $180s, up almost 50%) and August 16th (mid $160s, up almost 70%)

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. In days like this you really want stable stocks like Baidu.com which shows little weakness (I can't believe I just said that) A break at this level takes you down to the 50 day moving average, $270, or 15% lower. If we go there, I'd be a more interested buyer in scale.

So in essence I am buying back a position that I sold about a month ago for 11% higher... but buying a bit more.

Some highlights from the 2 articles above:
<