I’m going to use today’s bounce to sell Marvell Technology Group (MRVL). I don’t know how long this bounce will run—it could go to 1220 or so on the Standard & Poor’s 500 or be truncated by investors selling into strength—but I would like to lighten up on technology for the summer quarters. Marvell Technology is the most volatile of my tech holdings. That will be good news when the group rallies but right now it exposes me to more risk than I’d like. (For more on my short-term take on the market see my post https://jubakpicks.com/2010/05/26/and-the-best-lack-all-conviction-the-odds-are-against-u-s-stocks-holding-alone/ )
The company reported good earnings after the close on May 20 beating analyst estimates for 37 cents a share by a penny. Revenue too came in above the consensus of $845 million at $856 million. That was a 64% increase from the first quarter of 2009.
The company even upped its guidance for the second quarter. Earnings, the company projected, will be in a range from 38 cents to 43 cents per share (consensus before the revision was 36 cents) and revenue will be $900 million to $930 million (consensus was $865 million.)
That earnings news produced an 8% pop in the stock on the next trading day but since then it’s been pretty much What have you done for me lately?
 The stock has retreated toward its 200-day moving average with a close slightly above or below that support depending on the direction of the market as a whole. That’s not a good sign if you think that the overall market is trending lower.
As of May 26 I’m selling Marvell Technology Group out of Jubak’s Picks with a 5.3% loss since I added the stock to the portfolio on January 19, 2010.
Full disclosure: I will sell my personal position in Marvell Technology Group three days after this is posted.
Twoyfixed & Drevil,
Of course now you are talking about Jim’s personal account, which doesn’t have anything to do with online portfolios, which only hold hypothetical cash.
It really is a pretty bad time for trying to get any kind of yield on “cash”, but it would be interesting to see if someone has a good place to stash their cash.
twoyrfixed,
Great question. Curious as well.
1 more question (I know I’m pressing my luck), does anyone know where Jim puts his parked cash? I know that this may be a dumb question, but…..
Stop the presses! Bloomberg has the reason why the markets tanked:
http://preview.bloomberg.com/news/2010-05-26/u-s-stock-index-futures-gain-indicating-rebound-will-continue.html?wwparam=1274907219
China is cutting their euro investments!
I’ll sleep better knowing that…
Hi Jim,
I know you have been selling some stocks out of Jubak’s picks to raise cash. I have conviction in some stocks which means I can buy now and buy more if the market moves lower. Some of these include AAPL, CSCO, INTC, WYNN and DIS. Are there some stocks in Jubaks picks that you feel this way about?
Thanks for all your hard work. You certainly make us all more informed investors!
Or perhaps this little story might be why the market tanked:
http://thehill.com/blogs/on-the-money/budget/99973-us-debt-reaches-level-at-which-economic-growth-begins-to-slow-
Our national debt hitting the point where economic growth historically begins to slow? That might be a reason to sell…
Meanwhile, United States secretary of state Hillary Clinton says South Korea has America’s full support in dealing with Pyongyang.
Ms Clinton was in Seoul to meet president Lee Myung-Bak to discuss possible responses to the sinking of the warship.
She says the international community has a duty to respond to the torpedo attack.
“We will be working together to chart a course of action in the United Nations Security Council,” she said.
“We call on North Korea to halt its provocations, end its policy of threats and belligerence towards its neighbours and take steps now to fulfil its denuclearisation commitments and comply with international law.”
I’m sure Kim Jong-Il is quaking in fear of this pathetic administration.
Run26.2,
It basically cost her all the gains she had so far this year: $12k.
I never could understand why anyone would pay a broker. Even if I were a total financial illiterate, I could just take Jim’s advice and do better than I would paying a broker.
Ed… wow, so how much extra do you get to pay to buy at the top and sell at the bottom? I guess the good news is she moved into Greek bonds, excellent yields!
Now would not be a good time to be stationed on the DMZ. Visited in 1991, after absolving PRK and US of any responsibility. Even then, a tense place. Then again, technically, they are still at war.
yx,
Maybe this is why:
http://au.news.yahoo.com/a/-/australian-news/7299302/south-korea-loses-track-of-norths-subs/
Run26.2,
I know what you mean about models.
A woman I work with has a broker. I told her about the same time I told all of you to get out of stocks. She told him. He pooh-poohed me.
His “model” turned bearish last Friday. He had her out of stocks on Monday.
Can you believe market turned into red now?
It’s 3:35p.
It’s coming down…
Ed… Oh, I know. I just couldn’t resist!!
Had to bring something that might be positive to the very bearish discussions lately on the board.
Besides, it’s not like models are ever wrong!! TIME TO GO ALL IN!! (I’m kidding)
Run26.2,
Actually, I consider that good news. I’m a short term bear. Long term, I’m still undecided, but I would prefer a bull market. That would open up opportunities in China again.
Sorry, I meant to say “Thanks”
Jim, hanks for the CASH position. That was my question too.
Folks:
I follow several experts regularly, Jim is the only one saying cautious today.
Off topic… 2 key statistal models are bullish (sorry Ed):
http://www.marketwatch.com/story/two-highly-regarded-statistical-models-are-bullish-2010-05-26
Jim,
Have you run the numbers on 1st quarter performance of Jubak Picks portfolio yet? (I’m worried I may have missed that post).
Thanks for all you do.
Gary
ic, thanks for the clarification Jim!
Thank you!
twoyrfixed, I finished the first quarter with just 12% cash.l Since then, through today, i’ve made 9 sells and four buys. With the drop in the market my cash position is now roughly (I’m doing this on the back of envelope while traveling) 30%.
phatchk, I’m selling the stock in the Jubak’s Picks portfolio today. I do buys and sells in my own personal portfolio three days after I do a buy or sell in the Picks portfolio so you know I’m not trying to front-run for my own profit.
Don’t mean to hijack……
Can any of the regulars tell me where Jim’s cash postion is currently? Thanks!!!!!!!!
Also, does he have that info posted anywhere?
how is Jim going to “take advantage of today’s bounce” if he isn’t selling it until 3 days later?
tanerb— it’s only a loss when you sell. you don’t have to sell. I did sell part of my MRVL a couple weeks ago for a little gain and the remaining today for a small loss. Overall up a couple pennies. Also sold WHR today for a nice gain for a weeks worth of heartburn!
yet another stock we bought late and now selling with loss
I’ve also been looking to sell some holdings on a bounce and this was one under consideration. Also look for right opportunity to move an old 401k to another firm as an IRA which will mean converting to cash so if we get a couple day bounce thet’ll be good enough for me.
sold
Sold last Friday on a bounce, broke even. Never worked for me. This post made me feel I did a right thing.