Who’s more scared and a Sandisk update

The markets are holding steady this morning and we remain near recent highs, which for the markets, also happen to be as high as they’ve been since last spring. The markets are near annual highs and the question that nobody seems to be asking is what happens if we bust through those highs and the technical analysis guys et al start chasing “the breakout”. We don’t have to catch every nuance of every move of the markets to continue to outperform as our strategy of buying weakness and selling breakouts has our portfolio filled with many longs and calls as well as shorts and puts.

Here’s what you need to hear today: Do not get impatient. Do not let yourself feel naked if the markets rally and don’t let yourself be so long overall that you have to panic if the markets happen to crash again.

Someone emailed me earlier requesting that I ask you guys who’s more scared right now — the bulls or the bears? I’m pretty sure I know the answer right now, but let’s ask it — “Who’s more scared right now, the bulls or the bears?”

As for Sandisk, mea culpa. The stock is down 10% this morning even though the company beat estimates last night because they also guided a little bit lower for this quarter. Nothing to worry about longer-term for Sandisk investors, but the calls we bought yesterday are obviously taking a big hit today. I’m going to hold my Sandisk longs steady. We still have huge gains from our purchases when it was in the $30s that more than offset today’s losses. Still not happy about losing money and making that mistake in front of you though.

Stay focused!