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Cornelius Chan Blog

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Bargain Bin Blue Chips Update Q2 Week 1

90 views  2012-04-05 20:33   Tagsblue  chip  dividend  bargain  bin 

The DJI went down -1.15% this week, up +5.43% since the beginning of the year. There appeared to be something of a mild panic in the markets this week as stocks sold off in a hurry over a couple of days. On Monday just as the Dow was about to break through the 13,300 level, the markets cratered and tumbled to a low of 13,020 this morning before slithering to a close of 13,060. All of my European bargain binn'ers fell by a significant degree and some are now just pennies away from my low-ball preset buy prices.

I caved in this week and sold all my shares of Veolia Environnement (VE). I had bought shares at $12.46 and sold at $14.96, grossing myself a 20.06% gain over the two months of holding time. I feel quite foolish for having panicked and sold my shares, however I felt (and feel) there was another market correction of 10-20% coming like last summer. I had been up 33% just last week, and was seriously contemplating selling then. This is a good lesson for me because it means I did not believe in two things: my purchase price was cheap enough and the fundamentals of VE are strong enough. I will remedy this situation by doing two things: lower my preset undervalued purchase price of VE and do some more serious company analysis to determine any significant weaknesses. That way, if I am lucky enough to buy shares below $10 and hold until shares reach $100 (all-time-high: $96.48 on 07/12/2007), I will have done gone gotten a 10-bagger; something I can be proud of. If I can't get VE, there are always the rest of my dirt-cheap buy list stocks to choose from...

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