Absolutely loving the extreme downdraft from the press coverage, fear mongering that MFG will essentially lose most of its institutional mandates and is now a fallen albatross with little fundamental value.
Those same financial commentators regard the FAANGS as unshakeable and global markets robust rejoicing that HD failed to read the tea leaves as well as everyone else. Seeing the whites of their eyes, the masses are lapping it up, losing sight of the nature of underlying business, which of course is cyclical. Like trying to con a con man, one may occasionally succeed. However, over the longer journey, dumb people rarely get smarter and smart people rarely get dumber. I am prepared to put money on the money men more than the journos.
This was never going to be a one day debacle and finding support may be a little way off yet. Dry powder, always a useful weapon in a long battle, in my opinion is what will truly pay dividends on this one.
I have my fill at $22, $21, $20 and now $19. Order in place for more in $18 range and money set aside for the unlikely event of another bath reducing the SP into the $17s.
What happens next month, or even next year is not relevant to my decision to go hard. I will intently watch funds flow over this shorter time horizon, just as I will watch staff departures and the response of management. This episode makes MFG a moving target ands investors need to be attentive.
Eventually one suspects buying support will kick in, when the selling pressure subsides. That said, we will all still be running blind as no news flow or no response offers no reason to believe large price shifts up or down are over. This will be a volatile play as buyers and sellers execute their positions.
When the dust settles, a chastened management and less profitable business will be revealed. They will then need to regroup to regain the confidence of the market. Most investors have done well over the journey and one would expect retain most of their investments in anticipation of the defensive positioning playing out to their advantage.
What the business is worth will be uncertain, but more than likely the worst case will already be priced in. A bit of humility may be needed from HD, as well as a bit of patience and a bit of investment good fortune.
As a holder only in the last couple of months, I am prepared for this new investment to take a while to recover, or die. Anticipating the former, I am here for a few years now or until my hour comes at which time I have left guidance for those who follow me.
One can never call investing a boring pastime. Each day offers up a new challenge and a new opportunity and a new lesson to learn.
MFG haters should enjoy this little time of cheer. Alas, they cannot stand to gain with no skin in the game. Investors grit your teeth, more pain may lie ahead, but have confidence that wider market conditions will most likely change just as the MFG despair will ease. Making money is no easy business demanding time and patience. This explains why most people fail. Each poster is free to choose their own investment path. I have chosen mine and will face whatever lies ahead based on all that I have learned over a long past.
GLTASH
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