Entheomania

A recent communication with one of my readers:


Jon Rogers to me

2:04 AM


Hello Yorgos,

If you had only one or two trades to make this year, which would you say or feel were the strongest? I like LDK, SVA, and UGTH and think they are very viable long-term positions to hold. I have really have enjoyed reading your blog and think you have made many excellent picks for this year and beyond.

Many thanks for the blog

Jon




Yorgos Voyiatzis to Jon

1:25 PM


Good day to you, Jon and happy new year.

This year proffers a great opportunity to buy into many outstanding companies, as their valuations have fallen back to sensible levels. The financial sector proposes itself as a good buy this year but, with the exception of ETFC and a few others which are highly likely to be acquired for valuations greater than they are now worth, I would not venture into this morass until 2010, maybe earlier but not now; for I suspect the financial sector will continue its volatile decline and reach a plateau in 2010 where it will stagnate for a couple of more years. Look at what happened to TWX since 2001 and you are pretty much looking into what will be unfolding for C, BAC, WFC, etc.: stagnancy.

As for 2008, it is my opinion that China, South America, and commodities in general will retain their strength and continue to proffer returns far superior to those in American and European markets.

It is imperative to invest in broad sectors and not just one or a couple. My current portfolio consists of 203 different equities, comprising most industries globally, most of which were purchased in 1997; none of my acquisitions has been sold since! This is because I subscribe to a long-term-buy-and-hold philosophy. If you want to make money in stocks, you buy them and forget about diurnal fluctuations and such asinine and witless observations. I inspect my portfolio toward the end of the year to see who is outperforming whom so as to seek guidance about how to proceed the following year. Once a solid foundation has been established, your only pre-occupation should be whether to add more onto an existing position or venture into something new. Granted, most folk are not that heavily vested into equities, but I can only speak for myself.

My blog is intended for me to keep in touch with friends and relatives living abroad. It is a means of communicating with them. So, what goes onto my blog should not be construed as investing advice. It is not; for IT ONLY REFLECTS WHAT I MYSELF AM DOING AT A GIVEN POINT IN TIME. Having said that, I am thrilled, I must admit, when my path intersects that of strangers whose ideals and interests reflect those of my own. After all, this is what the internet is (should be) all about. Just ever remember never to commit yourself to anyone's opinions unless you yourself have performed and committed your own due diligence and research upon the topic you are inquiring into. Never seek out one's advice; instead try to reinforce your instincts and give credence to your intuition vicariously: by scrutinizing others' opinions and by gaining insight from their empirical knowledge.

Now, from my perspective, alternative energy in general and solar energy in particular is the play for the next decade; and while the candidates are many, the real players are few. LDK Solar is my favorite in the solar sector for various reasons, but primarily thanks to its fundamentals and its unequivocal growth prospects. UGTH has prospects too, but I feel it is yet premature to dive into pure geo-thermal energy plays in 2008. I do own UGTH but I am not expecting much from it in 2008. If you have a couple of grand sitting idle, then go ahead and purchase UGTH; but, again, don't expect much this year. ORA and RZ are also great geothermal energy plays which should do better than UGTH this year ONLY BECAUSE their models are more diverse. Do yourself a favor and look into these.

To answer your question: If I could only make a couple of trades this year, which would they be? LDK, DBA ( PowerShares DB Multi-Sector Commodity Trust), ETFC (at anywhere less than $4.00/share it is an imperative buy). SVA appears to be a great buy as well; but as with most biotech plays it could prove lethargic sans major breakthroughs/deals. Had I intended to make at least 10 purchases this year, then SVA would definitely be one of them. But if I were looking to acquire only 2 or 3, I would want to be standing on firmer foundation.

Thanks for writing to me. Have a healthy and prosperous year.

Yorgos Voyiatzis