Thursday, December 27, 2007

Looking for Opportunity/Update

The market is moving mostly lower on a day with some negative, but mostly non-significant data numbers. There continues to be a battle among the brokerages and banks, each downgrading each other and cutting price targets. This is an element that is interesting. Brokerages have to make recommendations on stocks, but what happens to their opinions on their own company or their direct competitors? It seems tough to believe what one says about the other, and the only brokerage people seems to be trusting right now is Goldman, as they were the only ones to profit from mortgage troubles.

The energy stocks I recommended are really taking off. Here are the results so far. This is only in one week!

None have dropped. Potash up 19%, Mosaic up 14%, Monsanto up 10%, Diamond Offshore 10%, Transocean 10%, Schlumberger 9%.

I think these names are getting overheated in terms of price. Their earnings are growing rapidly, but that is all getting priced into the stock. I'd wait for a pullback before stepping in.

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