The Prudent Investor


SJW Downgraded
March 30, 2007, 1:45 pm
Filed under: Update

I generally offer this blog every Tuesday and Thursday, but when something happens that affects the portfolio, and I have time, I will post the information.

This afternoon I happened to notice that SJW, the portfolio’s single holding, was down more then 5%.  Investigating this I saw that the reason was that the stock had been downgraded by Brean Murray.  This company initiated coverage in October as a Buy, downgraded in December to Hold, upgraded the middle of this month to Buy, and downgraded today.  The reason for the downgrade was that SJW had met its target price of $43, thus the reasonable switch from Buy to Hold.  The Market is currently overreacting to the change, which is beneficial to the portfolio.

There are always times of advance and pullback, and I oftentimes wish to see more of the former than the latter.  In this particular case I am about a week away from making another purchase (I will probably make another purchase next Friday), and hopefully this drop will stick around long enough to make the purchase at a fortuitous time.  I try to make my purchase on the 7th of each month to remove the element of timing from the equation, and as will certainly be seen in the future, sometimes I will be lucky and other times the opposite will be the case.

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