Saturday, February 03, 2007

Every surge helps

I am not a trader but there is a type of trade I am happy to make. The is when a holding that is already very profitable makes an unmerited surge. Then I will sell in the hope of getting back in a few weeks later at a cheaper price.

This is what I did yesterday with Tesco. The shares jumped 5% after news of bid talk about their arch rival Sainsburys. This took the share price up to 440p which is a 2007 PE of 18. That is rich for a company that is growing at 12%.

So I hit the sell button. Of course there is no guarantee that Tesco will ever fall enough for me to buy back in but every company has its price.

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