Oh, Come On!

I reckon the only people loving my trading are the E*Trade babies. How did I miss the top in MS? It was such a good move up to $27.54 and now I've been hit with a button-popping retracement. It got so close to the $28 level I was looking at and I was hoping for some more upwards push up to $29+.

I was feeling kind of good this weekend, having had a very quick 3.53% gain in one day with MS. Moreover, I was on the verge of making some very nice seven figure sales at work. I was really kind of excited. I was ready to put my Miss Equities 2010 crown back on.

And now, it's all hot air! From premium to helium... from dinero to zero... from oh to no...

I'm pretty much in love with the fundamentals of MS. The more I study their balance sheet, the more I am convinced that they are way undervalued. And surprisingly, so is C.

But I am now equally convinced that the market is more emotional than logical. I'm not the only one! I mean, come on! There are companies drowning in debt and they are being bought up in today's sell-off, whilst the cash-rich MS is being sold. But fear is a powerful emotion. It keeps us from realising our full profit potential during intermediate tops and allows us to buy into market tops for fear of not profiting enough. I'll admit I belong in the confessional booth for committing both trading sins.

I have a bottom line with MS and I'm going to try to keep it, but that's sort of hard when you know there has to be a lot more potential with MS over the longer term. It has about 85% the cash that GS is holding, with a price that's currently only 17% of GS. Once it starts posting positive EPS, MS only has one direction to go. Yes, up! So, it hurts that it isn't going up.

Now that I've started looking at the market from this perspective, I am going to put MS on my ForexDiva's Absolute Favourites list. And it's possible even Harry Winston will take second place on this list.

In the meantime, I may have to avert my gaze during this semi-wardrobe malfunction. This will be a long wait, though. Next earnings announcement for MS: 22 April 2010.

Do I want to wait that long?

Hopefully, the NYX earnings announcement on 9 February, the BX earnings announcement on 22 February and the IPG earnings announcement on 26 February will bring some good news for my portfolio and divert my attention from AA, BAC, C, and MS, which will all announce their earnings in April.