I keep saying Google will miss; frankly I do not know of course - but the chart action is putrid and in all previous recession advertising is the first thing to go... so it's a risk. For all I know enough ad traffic is moving from traditional places to the internet and Google will smoke the number and we'll be looking at Dow 20K tomorrow on "the bull is back". But I continue to play better safe and sorry and with a nice 2 day spike in Baidu.com I can book some profits as a bonus. So I am going to sell Baidu.com down to a 0.8% position (cut about in half) here near $320. I'd love to buy it tomorrow near $280 on a Google selloff, but now I'm just being plain greedy ;)
It would make even less sense for Mercadolibre (MELI), a South American e-commerce company to sell off on a bad Google number, but logic and sense are never the market's strong suits. Knee jerk reactions, however, are. So I'm going to take about 1/3rd of that position off as we spike nicely to $50, and drop it to a 0.9% stake, and ask the stock gods to let me get back in at $44 tomorrow if Google makes the markets cry. These 2 names are starting to act like fertilizer stocks with these breakouts ;)
Frankly the next 24 hours is all about the Google as whatever Citbank (C) says or writes off tomorrow, CNBC will say "it's in the number" "the bottom is in" "kitchen sink quarter" "the Fed is behind them" "we love Citigroup" and "buy buy buy".
Long Baidu.com, Mercadolibre in fund; no personal positions
1 comments:
Actually, your selling similar companies in the same sector as Google make very good sense. You are correct that Google is a wild card right now. Lots of people were burned this last several months.
In fact,I believe that there are three ways of valuing the market.. The two traditional approaches are fundamentals and technicals. I firmly believe that 'psychology of the market' is a very valid third method... (Not that I know how to implement it yet..)There are investors that factor this into their equations, such as Paul Schaeffer with his 'sentiment' ratio.. But, laying in bed (here in California) at 5:00 AM and watching CNBC, I see a lot of evidence that (particularly in the opening period 'amateur hour', but thereafter as well,)emotions play such a big part in the market.
If the market was truly a well thought out environment, you wouldn't have to do what you intend..
Thx jegan ;-)
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