My Best Investment/Trade Of 2010
At the depth of the oil spill crisis, I decided to buy a bunch of shares of Transocean (RIG). I got in on the shares in the low $50’s. I didn’t time the trade perfectly, because the shares actually went on to go into the mid/low $40’s. On situations like this, however, you don’t have to time the trade perfectly to do very well. I bought the shares because I’ve always liked this company, and I saw that the focus of the public and the media was on BP, not on Transocean. I also figured that the markets were overreacting, pummeling the stock, sending it down from around $90 to under $50. This is a prime example of buying a quality company that is suffering from a short-term, temporary situation. Now, the stock is around $77. I’m up over 50% on the shares already. The question now is whether to sell the shares and book the gain or hang on to them. I’m probably going to hold the shares, since Transocean is essentially the #1 offshore driller in the world and the business should only get better as the world needs more oil. I also see the price of oil going higher which will help this company even more. This is an example of being patient with your cash and buying distressed assets. The opposite of that is buying Apple (AAPL) at current levels. Patience. Patience. Patience.