Thursday, January 17, 2008

New Private Equity Investment

Yup, another new investment. ING Private Equity Access. I heard about this one from Enough Wealth. He sold 20,000 shares and still holds 80,000. I bought 6000. The stock is a fund of private equity funds. I am also invested in Allco Equity Partners, which is a single fund, though with its recent large investment in IBA it has more money in publicly listed stocks than private equity. My main reason for investing in IPE is that it is selling way below the book value of its investments. At some point hedge funds and private equity will no longer be the pariahs they've become since August and the price to book ratio should rise. I have more private equity investments on my watchlist. I only have 2.3% of my portfolio invested in these two stocks.

The larger question is whether the stockmarket is bottoming here?

Looking at the chart you can see three very similar candles at the end of the current move down and the previous two major moves down. On the other hand, the stochastics do not appear to be bottoming here. The model allows for up to 2 or so days of downside from here. The weekly chart has reached the lower Bollinger Band in a similar way to the 2006 and 2007 lows. However, in 2007 the market declined considerably after bouncing from the BB. There's not yet any good sign of a bottom in the McClellan Summation on a weekly chart. The same goes for the bullish percentage. So I am very cautiously adding these new investments here, putting 1% or less of the portfolio into each. I'm not doing anything radical yet.

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