On July 10th I posted that I was taking profits and liquidating my ETF’s. Today I waded back in the water in a small way. I purchased a 1/2 position (200 shares) of the midcap ETF, $MDY. I was able to purchase it today (near the lows of the day) at a price several points lower than when I sold it on July 10th. I believe this news on Turkey’s currency collapsing is nothing more than short term “noise.” Like most international currency crises, the news negatively affect world markets for a few days to few weeks and the. It’s all forgotten, resulting in the market returning to its former highs. I feel this new Turkey news is no exception.
I will continue burning this dip if it lasts longer than today. The only thing I’d be concerned with is if the S&P 500 closes below the 2750 level. There is strong technical support at 2800, 2770 & 2754. If we break 2800 I’m not worried, but if we close below 2750 I’ll be stopped out of my $MDY position.
I also made a new mutual fund purchase today, The Cook & Bynum Fund. (COBYX). This is a very conservatively managed value fund. It is very concentrated and it has had periods where it holds a high allocation to cash. Today cash levels run 38%. This is a fund I plan to hold for a long time as I allow these fund managers to manage the portfolio and slowly buy quality stocks trading below intrinsic value. Holding cash at times of high risk, with market trading at lofty levels. The fund won’t perform close to an index fund in a bullish phase. It also has far less volatility and downside risk as a fully-invested index fund. NOTE: I’ll post trade updates to this posting in the comments section below.