Initiated a new position in Western Digital (WDC) last Friday to add a cheap technology name to the portfolio (it trades at only 6x earnings).
I wanted to take advantage of the strong digital storage theme and feel that this rally in the S&P 500 (SPY) has legs. I also feel that chasing yield will continue to be a strong theme for stocks and WDC yields nearly 2%. Here is a snapshot of the company.
Like I said, this market has legs. I know the S&P 500 is approaching “double-top” territory, but double tops only happen when they happen (sounds brilliant, I know). What I mean is old highs get passed up all the time; that is the definition of an uptrend (higher highs, higher lows).
I get that we formed a sloppy base recently because SPY pierced the 50, but we did the same thing last January and look what happened..SPY rose 10% +. With all of this being said, however, if we fail to surpass previous highs (actually form a double top), then lighten up on positions.