Tuesday, December 9, 2008

Investing Pittsburgh: Yesterday

The chart above is of USX (X) and Alcoa (AA) compared to the Dow Jones Industrial Average for yesterday. Yesterday is not the kind of day that happens often. However, when you make smart investing moves you occasionally get rewarded with a huge day. Yesterday, on the wings of Alcoa's 17.55% jump and US Steel's 24.44% jump the Portfolio was up close to 6.56%
(that figure counts the cash position. The invested positions were up 17.64%). Yesterday is largely thanks to rumors of Obama's infrastructure plan that would help Alcoa and US Steel and an upgrade in Goldman Sach's advice on USX. I can't claim to have predicted the US Steel upgrade, but I did enjoy it. I did say to look out for the boost in infrastructure spending to effect both stocks. Even more help would come from a finalized auto bailout.

Investing Pittsburgh is a regular part of this blog. It details the ins and outs of a mock portfolio of Pittsburgh Stocks invested and managed by me. For a list of all of the previous "Investing Pittsburgh" posts, click


Schultz said...

Ever hear of The Dead Cat Bounce? You should have bought AEO my friend!

Burgher Jon said...

I have heard of the theory that even a dead cat will bounce if dropped off the empire state building. I'm trying to decide how high I think this dead cat would bounce. The fact that I remain uncertain wether this turnaround is for real, is the reason the portfolio remains about 2/3 cash.

As for AEO, since monday last week it is up 4.48% (as of this writing). That's enough that, I will admit, I would have been better off in the stock if I had purchased it last monday. However, my fears about retailers remain and while I don't think that US Steel will give back all of its 24% gain over the same period, I do have a fear that AEO will drop that 4.48% like a dead cat. If it continues to rise, as I said in the previous post linked above, to the 11.25 area I will be more inclined to believe it's bouncing like a living cat.