Friday, July 11, 2008

Bookkeeping: Adding to Perfect World (PWRD)

This market is so strange. A slow motion train wreck that will never reach a crescendo. Half our positions are actually up, but the half that are down are taking a beating in the back alley. I'd actually prefer the market to simply give up in the last hour as people leave to go to the Hamptons. Death by a thousand cuts is just not working for me.

Anyhow, I am loving the action of Perfect World (PWRD) so adding another layer on top of what we have. We added a bit Tuesday as well. The last 4 days it has been holding up like a champ and we love this sort of technical strength - you'd think they own a pawn shop in the US or something. It remains dirt cheap at 17x forward earnings for double that amount of growth. This is a chart begging to break out, if the market would stay flat for 3-4 days. It is back up to 1.6% of portfolio and I'd add more but cash is down to vapors.

We are now down to 0% cash. We either have Ultrashorts or long positions. I don't want to liquidate the remaining Ultrashorts (despite seeing a ton of names I want to add to) until/if/when we have that last traumatic selling event OR the market turns on a dime. I'd have to see S&P 1275+ to be convinced. In either scenario (pukey type selloff or reversal past 1275)--> I am going to actually turn the key and become for a short time at least a 100% long mutual fund - and see how the other half live (ok it's not actually half, it's how the other 99.9% live). With my luck, the moment I did that, the next day we'd have a Black Swan Event and have a repeat of Black Monday, 1987.

I want to add one of these darn pawn shops but they refuse to fall down. Very strange action considering how strong the government reports show the economy is ;) So either their charts are lying to me, or the government reports are. Hmmm.... ?

[May 15: New Position Started in Perfect World]

Long Perfect World in fund and personal account

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