Much like the previous entry, I am beginning to rebuild Mercadolibre (MELI), another position I was cutting on the way up. It went much higher than I anticipated (very hard to judge where this one will top out since the P/E ratio is parabolic) – there is always a threat of a secondary offering with this name so I am going at a slow pace, but I had cut this name to a 0.1% weighting, so I have a lot of room to build a position. I am starting today in the $42s and taking it to a 1.0% weight (I’m wondering if they are going to announce a stock offering and this is why the stock is so terribly weak the past 2 sessions) This stock is not old enough to have a 200 day moving average but I’d like to add in scale in the $37-$38 range if we are fortunate enough to get a sell off there. At this point the stock has fallen from $56s to $42s in a week (25%) so it’s a good place to begin rebuilding the shares I sold off.

As always this is consistent with my layer in, layer out strategy – layer out as the stock price spikes, and layer in as the prices fall – I rarely catch the tops or the bottoms, but if I catch enough middles, we all win. That said, with this name I’m going slow since it could be $35 in an eye blink.

[May 14: Mercadolibre Reports]
[Mar 31: Mercadolibre with a 3PM Spike/Forbes Article]

Long Mercadolibre in fund; no personal position

Last 5 posts by Trader Mark

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