Wednesday, January 6, 2010

The Two Hour Massage Is Back!

Better times are here... at least for a while. I decided to treat myself to a 120 minute massage rather than my usual 90 minute massage. So far, my standard brokerage account is +1.41% and my Roth IRA is +1.2%. I took another loss - this time, on CPB. I exchanged the remaining capital for some more C.

I'm trying to keep a level head and not get too worked up over C, but it might turn out to be my one-way ticket to six figures providing I build up enough shares. The way I see it, not that anyone asked, is that C is one of the few remaining financial sector stocks that is still priced close to the low it made during one of the worst moments in economic history, so I’ve got to buy while it remains low. Even if it doubles, it’s a huge profit and its book value is about $6. I used to be wary of share dilution, and admit I was probably a bit too conservative. Since it has issued more outstanding shares, this might actually boost its market capitalisation. It is almost certain to test at least book value and if it does, then C's market cap will be at least $170 billion. I wonder if BAC will need to issue some more shares to compete.

According to me, not having bought more of C when it was even lower could turn out to be the dumbest mistake of my life. I really regret getting played by BAC and not buying more of HWD as well, but you only kind of know in hindsight.

My Dad could be right for once. Perhaps I should be thinking thousands of shares.

I do not want to get too greedy nor too aggressive. From the money management standpoint, I've already invested too much in C. However, I know I've got to follow my own rules this once because the risk:reward seems immensely promising.

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