Binge and purge

Bulimia on Wall Street

The Nasdaq (and to a lesser degree, the NYSE) seems to be in the purge phase of the binge-and-purge cycle of an eating disorder. After stuffing itself for the past three months, it is now coughing it all back up. The Nasdaq composite index is down for the fourth consecutive day and has fallen below the 1700 level again (with one more hour left in the trading session).

Nasdaq composite 17-Jul-03

One might assume that the economic and market news is dire. But no, as earnings reports roll in this week, most companies are meeting or beating expectations. Much of the economic news is upbeat.

All last week I watched my portfolio with mixed emotions. On the one hand, I was delighted with the nice gains as one stock after another hit new highs since I bought them. After a lackluster June, things were looking rosy. On the other hand, I had this niggling feeling that it was a bit too good, that it couldn't last, and that maybe I should cash out and bank some of those gains.

Alas and alack, I didn't.

After five hours of today's session, there is only one stock in my portfolio that isn't in negative territory for the day. Today, combined with the previous three days, has tinged my rosy picture with considerable gray.

portfolio today

I have to hope that this latest purge is another minor "correction" to "consolidate" gains — like the previous ones in mid-May and mid-June. If it turns out to be something worse than that, I'm really going to beat myself up for not paying more attention to my instincts of last week.