PARTY PUPPER

My thesis appeared to pan out today, I, however, is very disappointed with the performance of my portfolio, because UNH ruined my party. Every time I tried to average down, it has turned out to be a disaster, and I have to learn from these costly mistakes. NEVER AVERAGE DOWN, even on the quality names such as UNH. As far as I could see, UNH delivered a fantastic quarter. Its 07 guidance may be a bit light, but it always does so at this time. It is way too early for it to provide such guidance in any event. But the stock continued to fall, proving even quality company, and good results may not be sufficient to overcome the over whelming sales. You could feel it today. Every time UNH tried to rally, it was met with waves of selling to bring it down. What should I do? At this level, I believe the downside risk is truly limited, while the upside potential is much greater. Moreover, if I abandon the ship now, it would be against all my investing philosophy and methodology. I might as well give up now. I still have a lot of time. I just have to endure the pain. One day, it will turn. I still believe $55 is achievable near term target. However, it may go to visit $45 first.

While I am disappointed and somewhat depressed, I should not give myself too hard a time. In fact, I have done alright so far this year, despite mistakes (who don't commit them?). WFR jumped 12% today, and UIC recovered and went up for 5% plus, and most of others also did pretty well. Had I not had UNH, I would indeed have a decent day, at least in lock steps with the indexes. Given the small-cap nature of my portfolio, it is not surprising that I may under-perform the overall market in a day like this. Despite today's under-performance, I am still up by about 9.4%, handily beating all indexes. I should be proud of myself for job rather well done. Stop dwelling in the past, look at future.