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Looking At Ugly Stocks In This Ugly Market: CHK, AAPL, VE, and More

9 September 2008 2 Comments

As the stock market erased most of the gains from yesterday (which isn’t a surprise), most people including myself are getting continuously frustrated with losing positions. Let’s look at a few individual stocks.

Apple (AAPL)

They definitely failed to wow anyone with the “Let’s Rock” event today. A revamp of the ipod nano does little to excite fans and analysts. Apple needs to continue to push the envelope with product development in order for investors to push this stock to higher multiples. When can we expect a touch tablet PC?

I think Apple will perform fairly flat in the near term, however in the 150′s, I think we can expect a bounce into the 160′s, maybe 170′s. I’m not sure if or when we’ll see a return all the way up to 200.

Chesapeake Energy (CHK) and Natural Gas

Natural gas continues to get pummeled as oil continues to drop. Most know that I’ve been a CHK fan for some time and have been buying at recent levels but the stock continues to drop painfully. I want to buy more but am finding it more difficult to put more money into this position. With the trend lower, it’s hard to get any sort of bounce in natural gas or energy. Any bad news sends it lower and any good news will barely make a dent. Not sure how low this will go, but the trend is still down.

Veolia Environment (VE)

This is a decent water play, but like most stocks has been getting killed also. At current levels, the stock is sporting a dividend yield at approx 6.7%. I still like this stock long term and you can enjoy a nice dividend along the way. There’s a good chance I add to this position in the near term.

Philip Morris (PM)

This is one of the few stocks holding up for me during this ugly time in the stock market, however the stock isn’t up as much as I would like (not gonna happen in this market). This is a stock I will be adding to probably in the future. If for some reason, it drops lower, I will definitely add to it.

Conclusion and Long Term Focus

It’s hard to get excited about stocks in this environment and it is tempting to pull your money out of your positions but this is not what you want to be doing (unless maybe you’re in financials?). If you have cash, perhaps you should add to your long term positions (especially stocks like PM and VE). Remember, if your long term performance is exceptional, you don’t care about how you did over a single span of a few months. Use this time to recommit to your long term investment goals and think objectively about what positions you may want to add to at the current lower levels.

Good luck.

2 Comments »

  • Blake said:

    I share your same view on Veolia- I’ve had it for a couple years now. It’s hard to watch it keep falling, but I agree that now is the time to be adding to our long-term positions, not running away. It’s really foolish how most investors end up buying high and selling low, even when it’s obvious that’s the surest path to investing failure.

    Let’s both hope that VE finds a bottom soon. :D

  • sbf said:

    Kevin, and all of 20smoney:

    Went shopping today. It’s like a 50% off clearance sale for Oil&Gas stocks! Found some great deals. Didn’t spend all my money though. Remember guys, this is all long term stuff.

    Bought CHK @ $40.31
    BEXP @ $11.53
    CRZO @ $35.54
    KWK @ $20.51
    EOG @ $88.17

    What did you buy today?