Taking My Measly 17% Gain

One of the Asian gaming stocks I bought at the end of March was up 30% two days ago. Yesterday, however, a sell-off occurred and almost half of that paper profit vanished.

I watched the stock intermittently through the day as I was working. Near the end of the trading session, I had a decision to make: should I sell it? (to lock in the 17% gain that remained) or hold on to it? (hoping for a recovery in the future) It was an especially tough call to make because the trading volume was essentially equal to the previous day's volume. If the volume had been lower, that would have indicated more clearly to stay in the stock. If it had been higher, indicating a "distribution" day, that would have indicated more clearly to get out.

4:00 PM drew ever closer. The volume was neck-and-neck - how to make the call? Well, I had recently listened to a podcast interview by Bill O'Neil on investors.com. He had made a casual comment about having good sell rules that stuck with me. He said, "Stocks are kind of like people, when they act strange there's usually something wrong at a deeper level." Dropping 13% in a day, even on equivalent volume to the previous day, qualifies as acting "strange" in my book.

At 3:56 PM, I sold my shares and confirmed that the order had gone through. 17% locked in. I slept well last night.

As these things sometimes go, the stock rallied this morning. It is up to what would be a 24% gain if I hadn't sold it. Due to the rules of trading in this account, I can't just buy back the shares I sold - three business days have to pass for my sell order from yesterday to clear the system. Did I get "shaken out"? Was I hornswaggled and bamboozled by superior market operators who manipulated me into doing what I shouldn't have done?

Nah. I'm just a lucky mug who got to enjoy what would be the ride of a lifetime for most people - a 17% stock market gain in two weeks' time. Can you see me grinning like the Cheshire Cat? That's my sad face for the profits I "lost".

The McCain Nausea Reflex - Guilt By Association?

With the 2008 election coming up, I'm asking myself, "Who will best lead the USA as president in the next four years?"  From where I sit, it's not as cut-and-dried a decision as one might think.

I am a believer in limited central government - as you might have guessed from this previous post.  One of the reasons why I am so disappointed with the current US administration is that "W" won me over during his campaign in 2000 with his talk of "learning the lessons of Vietnam" and "reaching across the aisle".  I had no idea the neo-conservative branch of the Republican party would render him into little more than a goofy-talking sock puppet mascot for their agenda of global economic and military supremacy.  Yeah, this from a guy who bought the Iraq WMD argument and voted for "W" again in 2004.

Of the two major candidates, John McCain embodies my political and philosophic views more accurately. (of all cadidates, that would be Ron Paul)  Yet, I am just as susceptible to a reaction of disgust for what we have all been through in the past eight years (let alone the shocking meltdown of the US financial system in recent weeks) as anyone else.  In 1993, the Democratic leadership of the House of Representatives was implicated in a sordid fraud scheme that involved the House post office.  That straw was enough to break the camel's back and give the House of Representatives a Republican majority for the first time in 40 years.  1980 gave us Reagan Democrats and I suspect 2008 will have its share of Obama Republicans.

And yet, I wonder, is all this reactionary decision-making serving us well?   Taking a step back from the whole scene, it is highly unlikely that a John McCain presidency would look anything like "W"'s regime.  He's not one of the Washington good ol' boys with a hundred butts to kiss, he wouldn't have a rabid war hawk with ties to the defense industry as a VP, and there isn't a snowball's chance in hell he (or any other Republican president for the next decade) will get a rubber-stamping legislature.  Put simply, just because he voted the party line 90% of the time doesn't make him a "W" clone.  It makes him a Republican.  George H. Bush's presidency didn't look anything like Reagan's did before him.

A Democrat president with a Democrat-majority congress could lead to the kind of "We've got a mandate" mentality that leads to cures far worse than the diseases they intend to cure.

Well, I'll tip my hand.  All I want for Christmas is some old-fashioned gridlock in Washington for the next four to eight years.  Like the kind we had under Clinton, where congress would squash the president's agenda and then the president would veto congress's bills.  As far as I'm concerned, that was a key contributor to the prosperity we experienced from 1995 to 2000.  And if this somehow manages to suffocate the global military hegemony we've got going on (long after its purpose, winning the Cold War, died out) as well as atrophy the federal bureaucracy by oh, say one third to one half, that would be nice too.  OK, now I'm really dreaming, but hey - why not?

See, my problem is, I'm just old enough to remember the reactions to oil, war, and power which swept Jimmy Carter into the presidency.  Such a great smile.  Such a thoughtful, gracious person.  Such a disaster for the country, policy-wise.  Whoops, that looks like guilt by association as well.  Maybe I'll just stick to my guns and write in "Ron Paul" on my ballot.