Thursday, March 08, 2007

Last of the shopping spree - CNBC Contest

First, I should report that I am now in the top 25%. Not surprising.

I suspect the main reason is because I am not full invested, I still have about $400K fake cash left. Therefore, it is time to go shopping. My strategy this time is to do a market sweep because 60% of a stock performance is based on its sector. I included 2 of Cramer's recommendations - after doing my homework of course.

So here are the picks and the reasons:
Goodyear Tire (GT) - token purchase a la Cramer
Medco Health (MHS) - ditto, although the Healtcare sector is somewhere in the middle, the stock did not stand out
Next, I try to buy a bucket of minerals with XLE, but you can't buy anything but stocks, so I chose the following as a substitute.
Phelps Dogde (PD) - Mining stood out in analysis, and may be in consolidation mode
XOM -oil is up this morning ($61/barrel), might as well pick the granddaddy of them all
AMD - 52 weeks low? what? I am taking a risk on this one, will do more research this weekend to determine if it really needs to be here
Diageo (DEO) - worst of the worst, here I was going for a pick in a sector that is not doing well now, I intend to pick the best of the worst, ROX, however its capitalization is too small for CNBC, so I settled on DEO.
Wayeheurser (WY) my token NW stock is actually in a good sector, the only big name in the tree sector.
AIG - a worst of the best approach due to capitalization pick, alternative to VTKI

I should be almost as fully invested as I set out to be by now, so expect more sporadic postings on prunings et al.


DonCasiragi said...

I will say play the sub-prime their lows NFI and NEW are up 50% this week. They are both up 6 % each today as I writing this after free falling last week. FMT has also recovered. The shorts have closed in on LEND- it is 45% shorts as we speak- this indicate a likely short squeeze as we see in NFI and NEW this weej when it rallies big next week. It has fallen to 0.5 of book value- that is way discounted and i suggest a buy. I will buy LEND at this point but sell position in a week- quick money can be made...on the reverse- to play a contrary position pick up EQR- it is a play on a souring of mortgage loans and increased requirement for renters.

Ira Krakow said...

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