Today we had sweet market action for the bulls. The Toronto Stock Exchange was up 111 points, and it broke through 13,000 points today. All of the American exchanges were up big as well. To celebrate, here's some financial advice from Family Guy:
AMD (computer chip maker) jumped +12% today as well. In the last three months, the bears had pushed the stock price from $27 to $20. The stock price got slaughtered because AMD bought ATI, a computer graphics chip maker, and Wall Street didn't like the acquisition. They didn't understand why AMD had bought it, and the deal cost a lot of money, and AMD had to increase their debt load to pull off the purchase.
For people who did their homework on the stock, opportunity was definitely knocking today. In October, AMD had a conference call with investors, and they announced AMD Fusion which are chips that combine CPUs and graphics technology from ATI. They said they would discuss the details in December during an analyst day meeting. Well, today was analyst day, and AMD wowed investors with their presentation on AMD Fusion. Furthermore, they said that the company's growth would be double the industry average, and that the ATI acquisition went really well. You can find out more about AMD Fusion in this article entitled, "
The Outlook on AMD's Fusion Plans."
Anyway, I managed to pick up shares of AMD yesterday before the huge jump in price. I was a bit hesistant in buying at first because the stock had been moving down day after day. But I thought to myself, enough is enough, people have been too negative on AMD, and I'm calling a bottom right here. Ironically, it was Patrick who said he was thinking about buying more AMD, which made me finally commit to the purchase.
As for the International Bank of Chan Fund challenge, things have changed dramatically. We all started with $10,000 to invest, and about three weeks ago, cwing hit it big with some Chinese internet stock. He went all-in, and the stock jumped 40% in value in one day. A few more momentum stock purchases later landed cwing in first place with $17,000. However, the danger about constantly buying momentum stocks is that they can move down just as fast. You get it wrong once, and you could lost 40% in a day.
I spent most of last month in 4th place, and it didn't look like anyone could catch cwing. So, I instituted the "Go Big or Go Home" strategy. I drastically rearranged my portfolio in an attempt to catch cwing since I had nothing to lose. This meant way more risk, and diversification was chucked out the window. Yesterday, I moved a bunch of cash into AMD, and it paid off nicely today. Here are the current standings after my change in strategy:
What I want to show is that you don't need to go after crazy high-risk exotic stocks to make a decent return. Almost every stock in my portfolio are large well-established companies that you probably recognize. AMD, Electronic Arts, EB Games, Google, etc. are all household names that can make you some money.
Anyway, there's 18 days left in the competition, and I need to try and hold the lead. I might switch to capital preservation mode which means locking in my profits and not losing any more money, and hope people don't catch up.
Standard disclaimer: This does not constitute as financial advice. The statements made in this article are merely the opinion of the author. Please seek a professional financial advisor for your investment decisions.
