Some buys and sells

I made some buys and sells recently

Last Thursday, I sold out all my Large Company Index fund and Small Company Index fund in my 401k plan (my 401k YTD returns as of last week is 10.33%) since I think S&P 500 is approaching fair value (P/E=15). And here is my estimation.

However, after second thought, given the upcoming catalysts (which I will explain in more details in my follow up post), such as strong corporate profit, decreasing unemployment rates, historical low housing price, and historical low financial industry, etc, I think P/E can probably be on the high end (~17) especially when Euro woes are dminishing. So I bought back some index funds, BAC and AIG warrants for the past two days.

Of course, I still need to carefully watch out the development of Greek drama “Private sector investors have until 3 p.m. Eastern time Thursday to decide on participation in the Greek debt relief deal, and if fewer than 75 percent agree, the country could head towards a default that ultimately could trigger credit default swaps.”

If the deal passes, I might will buy more in my 401k plan. If it does not, the short term after shock on market will be huge. I might need to place some of my positions on the sideline. It will be very interesting to see what will be unfold tomorrow.