sold most of my AMAT today at $14. Reasons:
1. tax loss selling. I've made large ST gains this year, trading KLIC, RIG, and solar stocks (long and short). In addition, beginning 1/1/11, the IRS will get info from brokers, on cost basis for all stock sales. I need to clear out my old positions, so in the future my broker's cost-basis numbers match mine. I'll wait 31 days, then set orders to buy back AMAT at 12$ and down.
2. While the S&P 500 has set a series of higher highs in January, April, November, and December, AMAT peaked in January, set a lower high in April, and has yet to take out the April high. $14 looks like as good a selling price as I'm going to get, in this upcycle.
3. Bookings peaked in July. There isn't a perfect correlation between a peak in stock prices, and a peak in bookings 0-6 months later, but it's as good as any signal. siliconinvestor.com (thanks, Gottfried) It's not different this time.
4. We are in a cyclical bull market, but also in a secular bear market (inflation-adjusted stock prices peaked in 2000). That means BuyAndHold doesn't work, especially the closer the S&P 500 gets to 1500. Although I'd guess in 2011 the S&P 500 will be up 5-20%, I also see a lot of volatility, with multiple 10%+ pullbacks. The volatility will be caused by Europe's sovereign and bank debt, China's inflation, persistently high U.S. unemployment, oil over $100, housing foreclosures, and/or political/military shocks. BTDSTR* will give better returns in 2011, than BuyAndHold.
disclosure: no positions in semis or semi-equips, for the first time since early September 2008. Also have a higher cash position today, than at any time time since late September 2008. I used margin a lot, during late 2008, through 2009, and into 2010. I will be very reluctant to use margin in 2011.
* = Buy The Dip, Sell The Rally. |
