Friday, September 7, 2007

First Day, and what a day!

What a day, week, and month to start publishing a blog about the stock market. Today, the three major indexes were all down 1.5-2%, with some big-name individual stocks falling 5% even without any mention of bad news.

There has been lots of news in the past week, and even more market reaction.

Apple cut the price of the iPhone, and introduced new products. Investors freaked out because of fears of lower margins, and the stock has fallen 10% in just a few days.

Homebuilders are hovering at or near their 52 week (and, in many cases, multiple-year) lows. I regrettably bought Hovnanian (HOV) around 16, assuming that was a bottom, and it has fallen since. I believe the industry will eventually recover, but it's certainly going to be a tough period over the next few years.

Poor data on jobs shook the market today (Friday, September 7), as a loss of 4,000 jobs, compared to the estimated creation of 100,000, represented the worst report in years.

There were few bright spots in today's trading; arguably, the best result is that it now seems inevitable that the Fed will cut interest rates significantly later this month. Until then, this September seems like it will live up to its historically volatile, negative nature.

Personally, I'm primarily invested in value positions, since the short-term future of the market is so uncertain. Hovnanian is obviously the extreme laggard in my portfolio, but some of my other positions, like Toyota, are also now lower than the price I purchased them for. However, I'm in it for the long run, and I have supreme confidence that my investments will recover and flourish.

Until then, I may speculate on short-term performance by playing options.

There will be more on my individual positions, portfolio, and investment ideas to come.

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