I'm Back!!!!

I first would like to start out and say it’s great to be back!  Do to some unforeseen circumstances I was unable to blog for the past 4 weeks.  Unfortunately the past 4 weeks have been devastating to the stock market, at least for those stocks that I follow.  The only stock that held up was Apple (AAPL), which has pulled back off its high of $644.00 a share.  No worries as Apple can buck the trend of most markets as Apple is in a world of its own!

Earnings have started off pretty well and it appears as of today that buyers are starting to step back into the market.  The headlines have been pretty negative as worry that the economy is slowing in the US, China, etc, housing issues, high oil prices, European trouble, and banking issues to name a few.  If I listened to this garbage day in and day out I would never invest in stocks.  As an investor you have to look past all the negative news and filter out all the junk that is being put onto the news wires.  I scan each of my investments throughout the week and look for anything that could negatively impact the business.  If the story hasn’t changed I continue to own that particular investment.  Of course the price of the stock may go down during that period of time, but that is to be expected.  The reason I’m bringing the subject of negative news is mainly focused on the recent price action in Westport Innovations (WPRT)

Westport has been recently brought back down the earth.  After hitting an all time high of $50.19 on March 21^st 2012 it has plummeted roughly 33% as of yesterday’s close of $33.47 a share.  Talk about being punched in the gut!  Very disappointing!  This downturn could force someone to quit investing in stocks all together.  I’m here to tell you not to panic.  This has happened before too many high flying growth companies and they have rebounded nicely after a sharp downturn.   Since I started investing in Westport back in July of 2010 the stock has had extreme volatility.  On 4 occasions WPRT has went from peak to trough in excess of 25%.  Below is a list of date ranges to where WPRT traded crazy!

July 27^th 2010 high $21.34
Aug 25^th 2010 low $15.51

Equates to a 27.32% downturn

April 6^th 2011 high $27.90

June 8^th 2011 low $19.66

Equates to a 29.53% downturn

July 13^th 2011 high $28.05

Aug 8^th 2011 low $20.01

Equates to a 28.66% downturn

Sep 20^th 2011 high $34.23
Oct 4^th 2011 low $22.63

Equates to a 33.88% downturn

As you can see this isn’t out of the ordinary for Westport to trade from one extreme to the other.  Don’t worry about the wild price movements.  If negative news comes out that is detrimental to the company then I would be worried.  Yeah I would like to side step downturns, but sometimes they aren’t avoidable.  The story hasn’t changed for Westport.  I wouldn’t put too much time into the recent news that Cheniere Energy (LNG) is building the first LNG export facility in the US.  The US has an abundance of natural gas and one facility isn’t going to drive natural gas prices up over night.  As of today natural gas has hit an all time low of $1.95!  Some say it could hit $0.75.  Westport will still benefit even if the price of natural gas goes up 50% it’s still a $1.00 cheaper than a gallon of gas.  Also, remember that 150 fueling stations are being built as we speak to support the natural gas revolution.   That’s right millions of dollars are being spent on natural gas taking hold as a major alternative to foreign oil.  Be patient and WPRT will give back to loyal shareholders in the near future.

Clay-


Full Disclosure

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT)-Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor.  All recommendations is strictly my personal opinion and the information is intended for learning purposes only.  Invest at your own risk!

Monster Portfolio 2011 Week 33 Results

MONSTER PORTFOLIO 2011

Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 32 08/26/11

$2,333.12 Stock
$82.88 Cash
Total $2,416.00

Since Inception: -8.19%

Back out cash inflow and we have a balance of $1,828.00. 


My portfolio gained +6.38% vs. last week results.  Not a bad bounce off the low’s!  I wish I could smooth out the volatility, but it doesn’t appear I can do that with a couple of grand.  For many of you that follow my blog my portfolio is wild.  I own 3 individual companies of course it’s going to be volatile. 

For those of you who are long term investors this portfolio isn’t for you.  It's for those who would like to turn a little bit of money into something potentially larger in a short period of time.  Long term investors should be investing completely different.  Investing in index funds is a perfect way to come accustom to the stock market.  The last month or so has been out of control, but I don’t want that to deter anyone from investing.  If you are a person that can think long term, this short term volatility shouldn’t bother you one bit.  I constantly hear people say I’m going to have to work another 20 years in order to retire. I lost a lot of money in the stock market and I can’t see the end in sight.  Folks there is no evidence that this is true! The market will snap back!  Human nature is to get down on yourself when things aren’t going your way.  I have the same problem, but a few months later I’m back on the saddle looking for a way to make my money back sooner than later. 

If anything I’m a great example of a person that can manage to weather the storm.  I don’t know too many people that can withstand losing 20% in less than a month and still feel good about the stock market.  I take the market downturn as a learning experience, but also as an opportunity to exploit the best situations for potential financial gain.  You have to be active.  When you’re losing money it’s easy to stick your head in the sand.  You are not doing yourself any favors.  Address the situation.  Determine if your investments are still worth owning.  If you come to the conclusion that there are better opportunities to make money elsewhere sell your investment immediately.  If you continue to like your current investments, it’s a perfect time to buy more.  Remember you are investing for your future. 

My philosophy is when in doubt buy more. LOL! I have always made most of my money when stocks are out of favor and have lost a lot at the top.  When I feel great about the stock market that is when I should be selling.  Invest when others are scared and a majority of the time you will come out ahead.  Even though my portfolio has fell back into the red I still believe investing in stocks is by far the best vehicle to create wealth over time. 

Clay-

Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)

"When in doubt buy more!"