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I'm running out of ideas

I'm running out of ideas on stocks to buy...  been consolidating my portfolio over the past couple months.  Oil stocks are high, retail stocks are high, everything seems high.

Stocks seem pricey to me.  HD and WMT keep having declining and flat earnings and that's unsettling.

SunTrust dumped 4 mil or so, of their KO stock that they've held since the depression.  They said they might unload the other 40 mil or so later this year.  Looking at the technicals, I decided to unload all of my KO.  In fact, it seems SunTrust wants to unload a whole bunch of stuff.   Maybe they know something I don't.

I'm conflicted between:  (1) cashing out my portfolio totally, or;  (2) increasing my short position - which I did again today.

We're in mid-May now, and it'll be a looong six weeks before the next earnings season.  Some people think next quarter's earnings estimates may be on the high-side.  I dunno.

What should I do?  Any suggestions?

- Vooch

By Vooch at 2007-05-15 13:49 | Stocks | Vooch's blog


RE: Running out of ideas

Stay liquid.  I'm not sure about cashing out completely, however.  That involves timing and you might be sorry if one of your core holdings, like Home Depot, gets acquired.


-theo
By Theo at Tue, 2007-05-15 14:33 | login or register to post comments

I agree with Theo. There is

I agree with Theo. If you are willing to hold on to cash and miss a few opportunities when the market is overvalued I think that shows discipline. Warren Buffett didn't look great in the late 1990's missing out on the tech bubble but he who laughs last, laughs best.

There is so far only one sufficiently undervalued stock from my quant screen (ASPV), but I am concerned about its lack of pipeline thus far: its mission is to research new indications for current drugs for rare diseases, but it only has one drug right now (Cellcept).

Thanks also for your comments, plus those of PelcMarek and SChin, on my Wesco notes.

Disclaimer: I own shares of ASPV.
By First Principles at Tue, 2007-05-15 19:15 | login or register to post comments

I went to look at ASPV, but

I went to look at ASPV, but it didn't have enough data points because it's too new of a company, so I had to pass.

Personally, I don't like to invest in drug companies focused on rare diseases because the customer base is rare (low) also.  I like companies that are able to sell it's product to everyone - it seems to be an easier way to get the growth.

- Vooch
By Vooch at Tue, 2007-05-15 19:24 | login or register to post comments

I concede your points--I was

I concede your points--I was including it to say I can't find much out there to invest in, either.

By First Principles at Tue, 2007-05-15 20:41 | login or register to post comments

Re: Running out of ideas

I think it is a good time to reduce risk in the portfolio, buy the 'high quality' stocks that Jeremy Grantham at GMO and Bill Nygren at Oakmark have been writing about.  These are relatively stable and growing blue-chips that normally trade at high premium to market multiples and are now at similar multiples, some even at discounts.

Think PEP, BUD, JNJ, WMT, HD, TYC, UNH, etc.
By Bruno at Wed, 2007-05-16 10:31 | login or register to post comments