I wrote about how to play this rally by buying junk stocks. I specifically mentioned McClatchy (MNI). When I recommend the stock back on August 11th, the stock finished that day at $2.06. It's up about 33% since then. The stock has worked well as a trade, but I would suggest exiting it now. The company has had a nice earnings surprise and has aggressively cut costs, but the song remains the same. Unless you know something novel about the newspaper business in general and McClatchy specifically, you should be happy with a sizable gain that you can now put into cash. Enough is enough. I'm pushing away from the table. There's probably still money to be made in this stock, but I'm fine with it going to someone else.
MNI is a good metaphor for the market's performance YTD. The stock bottomed in March and has been on a tear ever since. However, if you look at the fundamentals, there has been very little in the sense of real change or improvement in the company. I realize that the stock market is a leading indicator, but the market must be looking a decade forward in order to justify the performance of McClatchy and other similarly challenged businesses.
I just don't feel comfortable holding this stock anymore. I've made my money and now I'm moving on to something safer.