Don't Just Dive In

 | Jan 02, 2013 | 10:51 AM EST
  • Comment
  • Print Print
  • Print
Stock quotes in this article:










Big gap-up opens, like we saw Wednesday morning, always give me mixed feelings. It is great to ring the register on some nice gains, but new entry points then become quite difficult. I find them particularly hard to find when the folks in the media are jumping up and down predicting that stocks will now go straight up for the next year.

A move like this always produces performance anxiety, but I suspect this session is particularly bad in that regard. Not only is it the first day of the new year -- a time when everyone wants a good start -- but many are probably underinvested due to the uncertainty created by the "fiscal cliff" debate. I doubt many were well-positioned for a massive gap up on the first trading day of 2013.

If you are underinvested and looking for long exposure, like I am, I suggest you stay patient and be selective. Yes, some things will run away without you, but the important thing is to stick with whatever methodology you prefer to use. Don't just jump in and start buying because you are afraid of being left out. Even when the market does gap up like this, the setups will come if you are patient.

I've been a net seller in the early going and have taken some gains in positions I've mentioned, such as in Qihoo 360 (QIHU), St. Joe (JOE), SouFun (SFUN), Silica (SLCA) and MagnaChip (MX). I have a couple minor new positions -- most notably Home Loan Servicing (HLSS), which has been digesting a recent secondary offering.

I'll be more active with my buying later in the day. Right now I want to focus on building a list of prospects, and then we'll see what the action looks like as emotions cool.

Columnist Conversations

volatility is quite low here, and we could see some downsides here in the short term. ...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.