Journal Entry # 24 (11/3/09)

We are heading into the homestretch with Thanksgiving a couple of weeks away and then, before you know it the Christmas holiday season will be upon us.  Talk about an early start, I have seen retail stores advertise their Christmas & Thanksgiving specials during the week before Halloween.  Shopping to accommodate your holiday preference! 

Anyway, what has been on my  mind lately was a strategy I initiated into a very high profile portfolio the other day and because of the volatility I experienced during the execution of it placed some apprehension on the merits of the trade.  There is an adage in my business that there is no such thing as a bad security (unless you have credit concerns then you shouldn’t be involved in it to begin with) just a bad price (or entry point).   The security I purchased experienced a 6 handle move (6 different price points similar to saying it traded from $10 - $15) in one day and recouped 4 of those handles the next day. Talk about volatility.  Fortunately, I didn’t execute at the richest point but neither in the cheapest point but at a level I thought was fair and a good entry to execute the strategy needless to say it was closer to the cheapest point.  After the day, I went back to drawing board, studied my notes, gathered together various resources and pondered the soundness of the trade and reassessed the strategy from its fundamentals and surmised  that I executed the trade in front of technical tsunami (overbought market).  Only time will tell if I get rewarded.  Now that it is on, I can’t be cute on the trade and eek out the last point. I should exercise discipline that if and when I achieve my price objective take the results and move on to  fight another day. I think the technical correction I experienced during my execution is mild for what I think will come down the pike. Stay tuned….