Lessons Learned, Week of Feb 13, 2008
Overall, I think I’m betting far too heavily in one sector (Financials) and I’m too anxious to buy. I think I have the fast run-up in the Financials from the prior week stuck in the back of my mind and I feel like I need to jump in when the prices dip. So far this week, that has been a bad idea as the prices just move lower each day.
Compounding the problem with overweighting in one sector, that sector happens to be at the mercy of the news (or lack thereof) coming from our Government. That is a very frightening place to be and I don’t think I’m going to speculate in such a volatile area again. At the very least, I think that buy-the-rumor and sell-the-news is the only way you can get close to this sector right now.
I also don’t feel good about keeping these positions for so long, but I guess I feel like the downside risk can’t be that much greater at this point and any piece of good news will send these stocks much higher. I may be kidding myself and I may come to regret this decision later, but this is where I’m at now and only time will tell how it plays out.
