If There Is A Second Shoe, There Has To Be A Third And A Fourth

Amazing! That is the only way to describe the market activity today. Okay so if you have followed the markets closely I am going to spare you with all the metaphors or worn down phrases like "throwing the baby out with the bath water". I am as bored of them as you probably are. So let me cut to the chase here. Market fall was not a surprise as we surmised in my prior few posts.

It is very simple folks - when it comes to credit issues and subprime mess, if there is a second shoe, there has to be a third and a fourth too. This is exactly what is unfolding. The smart money knew to pay heed to the ominous signs arising from the German bank's announcement of paper mess and the nervous tone from Bank of America's earning conference call. They also knew how over extended we were. Today was a long process that was in making over the last few sessions as the volume kept going anemic. And finally when the volume picked up it was on the other side of most bets. One look at today's declining volume over the upside volume would have painted the picture for you not to mention the extreme NYSE tick reading. It was out and out a clear signal that the big guys were selling into the market.

The big question is will this continue? - You bet. But I think this is extremely healthy. Think of it as detoxification of the markets. For short term, expect the next week to be choppy.

Our portfolio has not had much activity as you can see precisely because i was expecting this chopppiness. And in spite of that we did fairly well. I didn't sell off gold contrary to what I posted in my previous message because the trailing stop didn't trigger. Which actually turned out lucky given the monstrous rise in gold since the last post. Also Intuit Surgical once again gave a blow out quarter and I am thankful that we held off on some ISRG that reaped the gains.

I am going to follow up with a more detailed post sometime next week or this Sunday with my picks as I finally see an opportunity to get back into the market and buy some really good companies at a discount.

In my next post I will also have the updated portfolio holdings or I may revise this one and add the portfolio list by weekend.

take care and hangin there
Krish Rathi