Wednesday, March 22, 2006

Portfolio moves

Jones Soda had a great day today finishing up 9.78% on pretty big volume. The stock has had a fantastic run lately and I'm hoping it continues. It's up over 50% from when I bought it a few months ago and things are looking good.

I sold FRX two days ago and it was decent timing. I had a good gain and I ended up selling it in the morning around $44. The stock then started to drop and ended the day down over $2 I think (I sold it when it was down under 30 cents). My main reason why I sold it is that there is too much news in the near future. This sentence doesn't really make any sense, so this is what I mean. They have a patent trial coming up that could potentially take another two months to wrap up. If they lose the trial, they will basically lose 50% of their sales -this is a huge case! Some analyst reports put the probability of them winning the trial at 75%. This is a good number, but then you have to think that they still have a 25% chance of losing 50% of their sales (scary!). Here's my thinking: this won't be settled for another few months so what's going to make someone buy the stock now? It just seems that there's too much potential for selling rather than buying. If I was looking at a stock and I knew they had a 25% chance of losing half their sales in two months- I would wait it out. This is assuming I have no great insight into the trial. Even if someone wanted to get in because they think FRX will win, why buy now and not a month from now? Logically, I would think there will be more selling pressure in the near future (but I'm probably going to be wrong). I just didn't want to take that chance with a position that turned out to be my biggest position. There's a very small chance they might settled, which could be a good thing (look at BMY today, which I almost bought at 22...).

Other news: added Intel a few days ago. 2006 might be a little tough, but it looks cheap, and I think they will get back on track.

1 comment:

Apollo said...

Looks like your investments are tracking well.