Let em Run !
September 21st, 2005 by BWV
I made a pretty rookie mistake on WMT.. only catching about 2 points on my short sale in mid-August, from $47.50 to 45.50.. I was hoping to reload the short on a rally to the $48 area, and was hesistant to sell the little mini-rally that did occur.
While one can’t expect perfection, I obviously must improve my skills in the “Let Winners Run” area !
Secondly, I’ve gotta find a way to get back in this short.. though the pessimism is running so high in WMT that some sort of relief bounce “seems” imminent. But that’s just opinion, the fact is the thing is getting killed.
At 16x earnings, the stock is being called “cheap” by some folks. But it looks like it will only get cheaper for the foreseeable future. WMT has not made a new high in several years.. since January 2000. This was also the case for other blue chip disasters: Merck, Pfizer, Fannie Mae. There are plenty others. The bear market wasn’t confined to Internet stocks, and it continues in these mega-caps.
These charts go back to 1998:
Amazingly, many Wall Street analysts have kept “Buy” ratings on these stocks for the last 5 years. A mattress would have made a better home for investors’ capital.
On Wal-Mart, they currently have a median stock price target of $57.75. I’m pretty confident WMT will see not see that number for many moons. If ever.
No positions in stocks mentioned (and unfortunately did not short any of these)
