Written by Pat McCubbin
Exact Stock Picks
Good Afternoon,
Let’s go back to April 5, 1999. Yes, that’s over 11 years ago. Some notable events happened that month. SpongeBob SquarePants made his debut on Nickelodeon and Wayne Gretzky played his last professional hockey game. Another thing that happened that day was the Dow Jones Industrial Average closed at the same level as it did today. But, it could be worse. Bill Gates was worth over $100 billion at the time.
Since that day the Dow has crossed over and under the 10,000 level 46 times from a high of over 14,000 to a low in the 6,500 range. What is this really telling us? The individual investor is at the will of so many forces in the markets it has been nearly impossible to employ any single strategy to obtain profitability. The short sellers have been killed the last two days, and those who were long got destroyed over the last few months. Nearly every big move in the markets takes about 90% of the stocks in the S & P 500 with it.
What we try to employ here at ExactStockPicks is an overall strategy of protection with the ability to obtain large moves in either direction. With each play that we put on we keep the potential risk level to a minimum, at most times between 3-7%. Are all of our selections winners? Of course not, but when we are wrong we never take exceptionally large losses. We feel in the course of a couple of weeks to a couple of months we will have the opportunity to make profitable plays without the added fear factor that absorbs those traders that are either long or short without an appropriate hedge. It is a strategy that takes time and patience and that is why we monitor all positions throughout the entire day and alert our members when its time to make moves.
In the portfolio today we made just a single move. We cashed out our two long calls on Cognizent Technology Solutions (CTSH). We opened this position on June 1st and the trade immediately went against us. If we were to have closed the position completely on options expiration in June we would have taken a loss over almost $500. We decided to close the short position when the stock sold off and take our chances with the calls. Fortunately, the stock did come back and we sold the calls for a profit of $80 and an overall loss on the trade of $20. A loser yes, but one we can live with. If we are wrong we need to improvise to cut or eliminate loss.
The short positions we made on ADTRAN Inc (ADTN) and Schnitzer Steel Industries Inc (SCHN) have certainly not gone our way the last two sessions. Fortunately neither one of them ran away completely and we are still close to the money on both.
With six trading days left before options expiration we are still in the ballpark with all of our stocks, but still have some work to do. This has been a slow beginning to July after a very profitable June, but we still have plenty of time this month to meet our goals.
Have a great evening and we’ll talk in the morning.
TEN Exclusive: Portfolio Update – 7/8/10 is an article from: 
