A bit of philosophy on a dark day

No one likes a total down day like today. I certainly don’t. But a day like today, when everything was down, when several of my good companies were down 5% or more, when the Russell 2000 was down 3.30%, the S&P was down 2.50%, and the Nasdaq was down 3.41%, it was liberating in a way. I could buy good companies that were down a lot without worrying that there was company specific news affecting them. It was just herd panic reaction.

But to buy, I needed cash. So on a crazy down day like today, I got a gift of cash. I had a small position in CYBR, which was rumored today to be under consideration of a buyout by Checkpoint, so it was up 21 or 22% when everything else was down. What a gift! CYBR was at an adjusted PE of 47 before today’s rise, and when I sold some it had a PE of 57.

I sold 85% of my CYBR position for cash. I figured if it did get acquired, it had limited upside from here as it was already up over 20%, but if the acquisition turned out to be rumor or fell through, the price would settle down. I put some cash aside for taxes and living expenses (in case the panic got worse before April 15), and went on a mini buying spree.

What did I buy? Well I tried to concentrate on building some smaller positions that were down a lot on the day.

I bought some CELG at $100.50 (down 6.0%).

I bought some AMZN at $584.50 (down 5.4%)

I bought some LGIH at $21.68 (down 7.0% - at that price their PE was 10.1 and they pre-announced record closings already)

I bought some PN at $5.32 (at that price it had a PE about 8.9 - To my amazement it finished at $5.95, up 63 cents, or 11.8%, from where I bought it, a totally unexpected bonus)

I bought some INFN at $15.45 (down 4.8%, and down 15% in the past week and a half).

And finally I couldn’t resist:

I bought some MITK at $4.095 (down 7% - It also gave me a small bonus, closing at $4.20, up 2.6%)

And remember, I was buying these with inflated dollars as I sold my CYBR at about $45.90, up 21.3% from the day before. To be sure, that small amount of fiddling around the edges of my portfolio didn’t prevent me from having a big down day, but it was certainly satisfying.



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Thanks for sharing Saul and giving us insight into your thought process. I have this thing called a job that really gets in the way of interday trading. :slight_smile: I must be learning something, because I saw the sharp spike in CYBR price this morning and did ask myself if it made sense to cash in the gains and redistribute as you did or hold for more possible upside. I decided I didn’t have any time today to do anything (which was the right decision for guaranteeing my sustained employment).
It is hard to find cash when you want it and you shared a way that one can make that decision. I have too many falling knives to catch now. I especially liked how you pointed out taking the action made you feel better on such a horrible day. We all need to look for ways to keep our emotions in check…especially when we have to wake up to AMBA’s opening price tomorrow.
AMBA has 42% of their float are SHORT positions as of 12/31/2015! I think I’m making the high short interest a new rule of mine to avoid. Someone pointed out a few months ago to me that a high short interest isn’t a bad thing, but I’ve seen more often that it usually is a good indicator of poor performance ahead. Live and learn.


Hi F1fun
can you tell me where to look for short interest?


Here is where I normally look for short interest:




Hi usha. I use TD Ameritrade and it is right there on the summary stats of the company. They list the % of float shares that are are owned by people shorting the company which I believe is reported the last day of each calendar month.
I also just looked at Yahoo Finance and after you put in a company ticker just go on the left side and select “key statistics” under Company. The short interest % will be on the far right side.