Me Vs. The Bulls

Just this month I broke even again on my stock portfolio. I had been down as much as 53% at one point, but now I'm up somewhere between 4 and 6%. I figured the Dow Jones was unsustainable at 8,200 so I sold my only winners, Tata Motors and Ford. I've included charts of those investments because I feel like every blog post needs pictures. The chart to the right is of my Ford investment. I bought in at $1.75 on November 11th and sold just a few days ago, on the 14th of April, at $4.26. I used a logarithmic scale for my chart so it doesn't look like it, but I made a 140% profit on that decision. I felt like a genius too because in the next day or two Ford plummeted to $3.41 in intraday trading. I didn't buy back in at that price, because I'm hella greedy. The Dow Jones rose 23% in the past 5 weeks, the biggest rise in post-war history. That made me doubt whether it would last since the fundamentals of our economy haven't improved. Things just look like they're getting worse slower. Not better at all. That's why I predicted then (and still do) a big fall in the Dow. So I'm waiting. And I'm greedy.

I also decided to sell my Tata Motors (pictured here) while it was at new heights. I bought Tata Motors on October 28th for $3.87 and sold it at $7.56. I bought Tata Motors for what I still assume will be the success of the Nano. However on the same assumptions of a bear market, I sold it. Also, most of Tata Motors' profits come from its commercial vehicle business, which has fallen apart in India and in its export markets. The Nano, wile exciting, is going to have margins so small that Tata will never make a lot of money on them. The benefit of producing the Nano is that Indian consumers will own a Tata as a first car, and hopefully they will be loyal to the brand as they trade up.

So, I'm predicting a fall. I don't know how long we have before it happens, and I don't know how bad it will be, but I think it's coming. I'm excited about Ford's long term prospects, but until GM and Chrysler (and probably a lot of their suppliers) go bankrupt, how can we think it's only up from here?

The only problem with what I'm predicting is that Ford had a great few days after I sold it. It fell to $3.41 and has since risen to $4.40 or so. It was up 12% yesterday and doesn't seem like it's coming back down. Dammit.