If we aren’t in the process of bottoming I do not care, better, since it will give more time to keep on adding if you have a cash hoard.
I do feel comfortable already adding to my principal positions: Berkshire Hathaway and Wells Fargo. I was a good part of this week busy studying about house builders like NVR, TOL and DHI just to realize that one of my biggest holdings under my nose: Wells Fargo, was comparatively a better risk/reward than house builders. So great news, since I always prefer to add to what I know and already have than to venture in new acquisitions, and besides I am already substantially exposed to the new housing construction sector via USG (United States Gypsum). When I realized that Wells Fargo had an EPS as big as several years ago but with a much lower stock price and that it could generate the current EPS under much worse conditions I realized that its share price recovery under better conditions was even safer than investing in home builders like NVR who are already substantially priced for recovery and whose management is under legal process due to high unjustified salaries. I also do not feel comfortable with house builders like DHT or TOL who have written off billions and where I still cannot be sure of the quality of the land and houses under their inventory and therefore cannot satisfactorily estimate if they will be further written down or not.
Given those facts I just decided to keep on adding to my good old holdings, too much of a good thing can be great! Thanks to the European banking problems and the Bank of America situation several good banks are paying the consequences and are providing a good stock price to add or buy.
I also bought Berkshire and Wells Fargo for my mother in law. So she now is a proud owner of those great american icons.
I closed the VXX (volatility) puts that I had sold less than 2 weeks ago, they are now basically worthless, it was a good and fast profit, there is now no need to run the risk to hold them for a very small potential additional profit and I leave the door open to sell more if the volatility should suddenly fall.
BOT 25 WFC Stock 24.05 USD SMART AUG 26 10:50:55 1.00
BOT 5 BRK B Stock 68.05 USD ISLAND AUG 26 11:00:12 1.00
BOT 1 VXX SEP 16 ’11 30 Put Option 0.12 USD NASDAQOM AUG 26 11:21:06 0.64
BOT 1 VXX SEP 16 ’11 30 Put Option 0.11 USD BOX AUG 26 11:25:26 0.97
BOT 1 VXX SEP 16 ’11 30 Put Option 0.10 USD NASDAQOM AUG 26 11:26:55 0.64
BOT 1 VXX SEP 16 ’11 30 Put Option 0.09 USD NASDAQOM AUG 26 11:29:39 0.64
BOT 25 WFC Stock 24.27 USD ISLAND AUG 26 10:59:22 1.00
BOT 10 BRK B Stock 68.03 USD ISLAND AUG 26 11:08:09 1.00