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Return to normal in June !

I am glad that May is over. It is one of the most terrible month personally for me. My dear father passed away at age 69 due to post-surgery complications on May 16. If you are around Pune and had to go to hospital, AVOID Ruby Hall at all cost. It is one of the worst hospital in terms on post-operative care. I wish someone had warned me about this before my father's bypass surgery.

Please spread the word about avoiding Ruby Hall, Pune at all costs for any treatment !

It has been 2 weeks since my father passed away - myself and my family are coming to terms and returning to our normal lives. Life would never be same when you lose someone dear to your heart and has been an inspiring figure all your life. But life must go on !

I am so looking forward to forgetting this dreadful month of May 2010. Coincidentally it is worst May month since 1940 with 8% monthly loss. I never thought my prediction about "Sell in May and walk away" would be so right on target. I wish it did not !

Looking forward, I am expecting markets to return to normal in June to get ready for second quarter results. Now that Dow has dipped below 10000 twice, it has got much needed correction. It sets a good stage for recovery rally and on its upward march towards 11000. Markets should recover 2-4% in month of Jun which would take DOW above 10500.
By year end, DOW would end above 11000 and possibly closer to 11500 which would be about 10% from current levels. In this correction, there are so many stocks below my recommended price and could offer 50% return in next 9-12 months. Here are some recommendations:
  • PMI ($4), RDN ($10), MBI ($7)
  • SFI ($6), SFI-PD ($15)
  • KEY ($8), SNV ($3), RF ($7.5)
  • XTXI ($7), AHD ($4.4), MMR ($10)
  • FAS ($22), DRN ($38), TYH ($28), ERX ($27)
  • CNO ($5.5), PNX ($2.6)
The price in bracket is recommended buy price. You should consider buying around recommended price and sell after 50% return in next 9-12 months. Till you sell, you can cash out on volatility by selling call options every month.

/Shyam


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