I bought a Financial Zune
Have you ever felt like the person who bought something and then the next day the item was out of favor and all of your friends had something else? Of course you have. Today, I feel like the guy who bought the Zune when everyone else bought iPod’s. Put another way, I bought Betamax when others bought VHS. I feel like the one out in the cold. To top it off, I had the iPod with a VHS player and sold them both at a discount.
If you are still reading this, you are probably wondering what my point is. Well, I own FNFG when I should have owned C, BAC, WFC, USB, MTB… should I go on? The names I mention are on a historic run. A run that might come once or twice in a lifetime. In the past week, I lightened up on financials and placed a trade on the one name that is sideways or down (FNFG).
I am chronicling my trading on this blog with a portion of money that I have set aside to trade in the public eye. If you read our content, you will hear us discuss our other accounts. I want to review what I have done in a couple other accounts this week.
In an IRA that I have, I traded out of the QQQQ’s back and bought BAC at $7.44 on 3/25/2009. Great move. However, I went against my original intent, got a little nervous about the BAC mortgage exposure, and sold my BAC shares at $11.91. I was thrilled at the price. Who wouldn’t be? I made 59% in about 6 weeks! My original intent was to hold my BAC shares for the long term as what I was calling my “lottery ticket”. The mortgage exposure that BAC has (thanks to the Countrywide purchase/takeover/take under/government handout) could put them in the catbird seat when things turn. These shares are in my IRA. I don’t trade in that… normally. Should have stuck to my original intent, turned a blind eye and known that I was in at a fantastic price.
At this point, having missed 2 points, should I jump back into my position? Take my lumps and just look at this as a higher cost basis? For some reason this is hard for me to do.
I will say this over and over on this blog. There are 2 types of traders. A trader either:
- Hates to take the loss.
- Hates to miss the gain.
There isn’t much in between those two types. I am a hardcore hates to miss the gain person. I can’t stand to miss the gain. ESPECIALLY, if I was well aware of the ‘story’ behind it.
To top things off, I saw the uptick yesterday as a good time to lighten up on my position in Citi. It has been on a tear. I was still holding 1000 shares in my primary account and felt that I could lower my cost basis intraday. I sold my shares at $3.51 and placed an order to get back in at $3.33. I know… those prices seem silly right now. However, prior to the Goldman Sachs upgrades in the banking sector yesterday morning, they were within reason. Citi dipped just below $3.42 and hasn’t looked back. At the time of this writing it is at $4.34 pre-market.
I can take solace in the fact that I still have financial shares. I own MTB, AIB, C, and the XLF, which is an index on the financial sector. I feel like I need to act, but I am standing still when looking for a good price.
I also have a feeling that there will be another shoe to drop. The commercial mortgage market hasn’t shaken out yet. WFC has a huge exposure in that area. Will they take a hit, or will they continue this climb? Time will obviously tell.
Bottom line for me is that I am feeling left out of the rally in a sector that I have been following closely. I need to adjust and take some meaningful positions here. Will we see a pull back? Who knows?
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