August 13, 2010 | In: Uncategorized

Dow may be slightly up by the end of the day

Looks like the storm is over, the Nikkei closed up, and some of the European markets closed while in the green. The Dow is still in the red, but it looks to me it’ll close up by the end of the day.

I lost quite a bit of money in this storm, but I learned some very important lessons that will help me in my future trades:

1- Never follow the trend if you can’t sell the stock an hour later
2- Never believe the analysts
3- Never think that a stock will never go down again
4- Only buy a stock after it starts going up after a week of correction (not just 1-2 days).
5- Citi is always good stock below 4

Number 3 is why I made so many bad decisions in my stock picking, I bought BAC at near peak at 14.40, as well as IMAX at 15.25, as I thought any correction will be minor, and the major trend of the stock is up. The bad news that hit the markets have wrecked havoc, and I think they erased trillions of equity value in just a week.

Not knowing Number 4 in the list made me choose to buy BIOS at a high price, as well as MFC. I did make a profit with BIOS, but the stock gave me headache for 2 weeks. MFC is still giving me headaches. I do expect the correction to end soon though, the decline in the stock has shed 5.6 billion of the company market capital so far. There must be an end to this…

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