Thursday, January 17, 2013

5 Year Highs, Now What?

The S&P 500 touched an intra-day 5 year high today. It's time to proceed with caution. That doesn't mean I've turned bearish, but it means it's time to pay extra attention to prices paid - when buying new stocks. It's also prudent to review your holdings and lighten up on companies that are close to or at their intrinsic value (IV). There will be better days (market pull backs) ahead to pick away at companies you like - it's good to have some cash around. In fact, I think 2013 will probably surprise most people, on the upside, but the volatility will be noteworthy. Volatility is opportunity. You want to be invested, but in the cheap areas of the market. That being said:

I have very recently sold my remaining position in tax preparer H&R Block (HRB) @ 20.30, which I bought in 2010 at $12.30. I have also sold 50% of my position in Agrium (AGU) @ $106.60, which I bought in 2009 at $47.

The plan for 2013 like any other year, is to buy cheap stocks and sell the expensive ones - sounds complicated eh? There's value in U.S. financials (banks and insurance), large cap technology companies, auto parts/car makers, healthcare and natural gas.

All the best in 2013.


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