Thursday, May 18, 2006


Yesterday was a brutal day in the stock market, as the Dow got crushed by 214 points on a higher-than-expected inflation number. European and Japanese markets followed the US lead with record declines.

This is not the beginning of a financial apocalypse though, it's classic overreaction by momentum players and hedge funds. Today and yesterday will prove to be historic buying opportunities like the 1987 crash. Sadly I can't put my money where my mouth is, as I'm already 100% invested in the market and have no cash to double down.

Oil service stocks are going to climb back up, led by King Hal and Slob. Biotech is forming a bottom, and you'll soon be wishing you owned more Genetech and Gilead. Tech will bounce back, especially good names like Qualcomm and Marvell. And finally, we have a dip in Ceradyne that is definitely worth an investment. Don't expect any of these stocks to go straight up from's a good day to buy half of the position you want, and then if the stocks go down a little bit you can add the second half. But all these stocks will be significantly higher in 3-6 months.

United Health is absolutely killing me...I rode it from 48 to 62 and now back down to 45. Today they are being sued by OmniCare, on top of their existing legal problems with executive compensation. If these guys can just get through the legal issues, they will make tons of money on this Medicare drug plan. At least Sears is up over 10%!


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