I have to warn you up front, after reading through this before sending it out to you I’m a little worried. You might think I’m a bit “off my meds” today — I didn’t have one coherent idea to share, so I ended up with a stream of consciousness that’s a jumble of ideas, ranting, and updates on companies that, I suppose, pretty well reflects the yo-yo nature of the stock market this week. If you want the short version: I still don’t like graphite, iron ore is a disaster for the same reason graphite is but I still like Altius, and I sold my Xerox shares. The rest is all over the place, but feel free to read on… hopefully it won’t feel too much like you got stuck sitting next to a drunk guy on the plane.
Much as I’ve felt inclined to slowly increase my cash position over the past year or so, I do find “high uncertainty” weeks like this incredibly enticing — when the market drops a couple percent and stocks I keep an eye on are falling by 5-10%, like many did on Wednesday and Thursday, it’s hard to resist scooping them up.
Yes, I know the old saying that we should avoid “falling knives” (though sticking strictly to that strategy is a little like walking through a store and saying “20% off? Meh! I bet on Black Friday it’ll be 50% off!”), but cheaper prices always catch my attention. I had a buy order in for a favorite insurance company stock for a while right about at its most recently reported book value, which I consider a very good price, and it finally triggered this week — so I own a few more shares of Third Point Re (TPRE), and I’m delighted to own those shares, despite the fact that the stock could easily fall further. But there were a dozen other stocks that I would have considered adding to if the markets didn’t bounce right back today with our job numbers, and I’m sure there are plenty of stocks I don’t own that will hit attractive prices next time the market freaks out a little bit.
Which is not to say that I’m going after every stock that is down, or even that I’m only buying (I sold Xerox today, more on that in a minute). I ...