There was an interesting, albeit too short, interview a few minutes ago on Squawk Box with Michael Mach who manages the Eaton Vance Large Cap Value and Tax Managed Value funds. He said he tries to manage emotion in the stock market and that capital preservation plays an important role in how he runs his funds.
These are things I have written about before, things I try to do in my practice and pass along in this blog. In the course of having a properly diversified portfolio you will have some stocks that are down. I don't think that they are down is the thing but why they are down.
We own a big broad line retailer. The stock had a great run last year, but like the market is off of its highs. The most recent news from the company has them beating past guidance. In this instance, that the stock is down with the market is not reason to be nervous or upset.
We own a tech stock that is down in the last few weeks a little more than the Nasdaq. The news here is also good, they are taking market share from an 800 pound gorilla and winning all sorts of new business. I expect the stock to outperform the sector in both directions. It is doing exactly what I expect it do. I wish it were going higher, but its not right now.
That being said, if the market goes below the 200 DMA I would not hesitate to sell either one. I don't know yet if I will, but in that instance a problem with demand for stocks (as I would see it) could become more important than what's going on at the companies. You may disagree with my approach but there is not much emotion in any of this. That is the point here.
The market works a certain way. The price of good companies goes up more often than not. I know that is simplistic but I try to keep it simple.
Wikinvest Wire
1 comments:
Roger-I have been reading your blog for a few weeks now. The 800 lb gorilla-could that be INTC or is it CSCO? Either way I am long both AMD & JNPR...and I beleive both will continue taking share from both of their 800 lb gorilla competitors.
Ray
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