Jack, I don't think many were surprised by the Fed. But the labor figures are what really set off the Dow, along with American Express rumors. I remain highly confident of a WMT correction into the high to mid twenties this month. I added to my short position today. Nothing really fundamental has changed with WMT since Jan., yet the stock is now up over 73%. WMT's forray into some real estate ventures is also troublesome to some "balance sheet" investors. The technicals are now screaming correction on most fronts, and soon.
Unless they grow domestically +20%, they will not hit projected revenue estimates. We are now into the 26 PE range, with a company struggling to grow the top line 15%. This is just too much "leveraged exposure" for me in my judgement. We are also talking about a company with net margins of 2.5-2.9% (spells cash flow risk) and some warning signs on the ability to finance inventories. Currently they are leveraging themselves "against " their suppliers. But this eventually leads to higher prices for WMT from them, as they too must make a profit.
I'm glad you've finally made a profit with this stock, which really has not moved for two years. Keep in mind though, you'll probally get a cap gains cut to 20%, versus 28%. (I know, I'm not counting on it either, until I see it in black and white.)
As far as moving money around, yes you must consider taxes, and move money, where you believe fits your risk/reward criteria and objectives, net of taxes resulting from the move.
I recently sold 95% of my CPQ holdings, which was the first time ever I sold, because I beleived I had a better place for the money with the same or better risk/reward level, even with the tax burden. I try to do this analysis "everyday", and really do it in depth about once per quarter.
Enjoy the Fourth of July weekend, and good trading. LF |
