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.
Best,
Saul
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