BUY ON CONSOLIDATION

Man, that was not fun Friday. I had the biggest drop this year, losing 1.5% in a single day. I probably lost about 1.0% from my portfolio. Currency and others lost another 0.5%. Excluding currency and other factors, I was pretty much in line with the indexes, which is an acceptable result. You have to accept that there were, and there will continue to be days like these when everything is dropping and there is not much, particularly for small, long-oriented investors, you can do. While it is not a fun experience, it is important to review the overall market, as well as my portfolio to see if there are real weaknesses. I am not too concerned about the overall market. In the near term, it probably will continue to consolidate a bit. But I believe the strong first quarter will likely lift the market.

Examining my portfolio, there are a few weaknesses. One, the lack of commodity is a mistake in the first quarter and I should have retained more of my energy holdings. Having said that I would not want to chase the energy and metal market here. Better to be patient and let it cool down a bit. Secondly, healthy care sector has not performed well in the first quarter and my holding in the sector is rather significant. Again, this is not the time to dump though. It is a good defensive posture and I do not mind to hold them here. Trust sector has not performed well due to apparent lack of interests in this once red-hot sector. I believe I should trim some on strength in the next few weeks.

If consolidation continues next week, I shall selectively add some names, particularly those that are likely to meet or exceed their quarters. I may also add some energy names, particularly nature gas names (ECA, UPL) if they continues to fall. Also pay attention to SOX which has been lagging thus far in the first quarter. I also plan to pick some ETFs on biotech, which has been universally hated.