Sell

PCP, Precision Castparts Corp.

Hamilton

pcp dec 27 2012

This company makes various metal parts for the aerospace and defence industries. It is the only  US company in the S&P that is headquartered in the state of Oregon. In the early fifties it made chainsaws. It keeps growing organically and by acquisitions. Sales and profits have risen tremendously but not quite as fast as the stock. At $196 the vertical distance travelled in wave 5 will equal that travelled in waves one and three combined, a frequent stopping point. It is right on the upper trend line and 5 wave sequences can be counted in all degrees. We think it is a sell between here and $196.

Interestingly, it is on RBC’s 30 best picks for 2013.

COST, Cosco update

Hamilton

costcost dec 25 2012

Back in June, now six months ago,  we suggested stepping aside, getting out, selling or whatever on the simple basis that we did not expect the stock to go much beyond $95 (it was $93 at the time). We did mention the Mnt. Everest syndrome that somehow sucks stocks to about $100. This one went to $105.97, including overnight, $99.44 without. When we suggest selling we did so with the average investor in mind, one that is completely undisciplined. If all our readers were “professional” all the time the sell option would not exist, simple because you do not sell a stock that has momentum going for it, after all the sky is the limit! Instead you would ratchet up your stop-loss ( to the trend line) and let events dictate when it is sold. Personally, we would sell here if we had not done so back in June. With a p/e of 24 this one is rather rich relative to the market.