Two recent buys -- BBND and TNDM are both owned by ValueAct. I have a little BBND to start at 2.63 -- ValueAct bought a lot at 2.80 and higher back in June 2010. These kinds of value plays usually take a long time to work out but can often be very rewarding when they finally pan out. BBND in particularly is one of those companies that looks terrible and has weak management. TNDM chart is much stronger and may be in play soon. So BBND is more of a tuck it away for later.
I'm still not sure what the market will do here... it should drop but then again. GE and AXP look good, REITs look good. JNK (corporate debt) is very healthy. The tech names are very pricey and deserve a correction but this may not cause a major selloff. Breadth has been weak for a few days but this can turn on a dime. The McClellan Oscillator is nearing major lows at -50. In June, Aug. and Nov. of 2010 -- the market bounced when $NAMO (McClellan Oscillator for Nasdaq stocks) hit around -58 give or take two points.
Many technical traders I follow have gone to 40% to 100% cash levels and have 'sell' warnings on. So there's plenty of cash out there that is waiting for a home. So it's a little unclear what's coming. But more importantly, it doesn't matter what's coming as long as you're prepared when what's coming comes along. The issue I have with pure technical traders is, they never ever get to buy really cheap stocks when they selloff sharply because other technical traders are selling.
Perhaps I'm wrong. But for example, I am holding the technically weak YHOO because I think the Street is not fully appreciating the balance sheet and that can change quickly. But understandably, cash is a very good position to have right now. Ultimately though, traders must embrace risk in some form. The main problem is how do we protect against large losses that devastate an account. As I've posted before, holding a loss until it becomes huge simply to avoid admitting a mistake can be devastating. I think men, in general, tend to be terrible at admitting mistakes. If you have trouble admitting you are wrong, to yourself, or your spouse, or in general, it would be good to keep this in mind and perhaps seek to let go of this fear. Once you let go, I doubt very much you'll be any worse off. Quite the contrary. Fear is a big big issue for traders -- in all its permutations. I've been thinking about fears a lot and how to overcome them. Perhaps I'll post some more on this later.