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publication date: May 4, 2011
author/source: Mark Messier
I posted this in the forums, but I wanted to make sure everybody had a chance to see it:
I just wanted to post my feelings on what I feel MAY be a general market correction beginning to occur.
As we have noticed, biotechs were HOT during April. It was by far my best month ever. However, I fee that the market may be beginning to shift into 'bearish' mode. There is a old saying "Sell in May and go away"... May is generally not a very good money for the market. Combine this with the fed ending POMO in June, and I think the market may be getting ready for a correction.
(link http://www.businessinsider.com/what-pro ... ext-2011-4 )
I am not a 'permabear', but please realize that making 75% on your portfolio in one month is NOT normal, even for a seasoned biotech trader. So what is the point of this post? Am I saying panic and sell everything to buy gold? No. The point is - BE CAREFUL
Here are some things I will be doing in the near future just to be prepared:
1- Conserve Cash. Remember, cash is a position
2- As tempting as it is, I will not be chasing stocks down, trying to buy every dip
3- Reduce large positions
4- Only buy stocks with DEFINED catalysts
5- Possibly shift from buying too far out. For example buy 6 weeks from PDUFA vs. 4 months
Again, I may be wrong, but the market has made SERIOUS traction in the past month, and I do not want to lose the profits I made, as I am nearly up 100% YTD. I would rather 'miss out' on some gains than lose a large chunk of my portfolio.
I am still 90% long, and I will be looking for great biotechs to buy, just some words of caution- I do not want to any subscriber to be unprepared.