I have been on the edge waiting for the final signal of a longer term down trend.
Things are obviously in a terrible state with the US and Europe. I think Australian investors are well aware that we are more closley linked to china but I think the market is still considering that. We have shown a slightly more stable decline than the US but I dont think that will save us. I was 90% sure that this would continye, holding onto the slim chance of a reasonable rally at least up to maybe 4700 or so but yesterday confirmed what my gut told me. That investors are well aware of the risks of funding a rally and area twice shy now from the GFC. I think this is going to be a more steady drop than last time and i dont think we will see the GFC levels. One thing that scares me at the moment is that the US seem ready to announce QE3 weather they call it that or not. While this might see a rise in share prices it is only going to make things worse.
I made the decision to half my stake in AGO and a few other stocks today, all up putting 30% back into cash. This is purely on my read of the current market. I have halved my stake while I can still break even. Ago is a brilliant company and its those reasons that I sold, I want more at a cheaper price. If it goes up and im wrong, well im wrong but great! If it goes down I will have the spare cash to invest back into a great great buisness at a bargin price and any others which show up. I think around $3.00 is the correct target. I have no problems with those holding for the long term and I still hold half but this was a strategic move for me to reduce some potential losses and free up cash for bargin hunting in maybe 6, 8 or 12 months time.
I might be right or wrong but thats the game we play.
Good luck everyone.
AGO Price at posting:
$3.54 Sentiment: Hold Disclosure: Held
