Yes, people actually trade to make money on this.
Pharma: GSK and Roche (foreign firm, if you can buy it)
Masks: MMM and APT
As for the stress test results, there was one bank that needs more capital. If I had to pick the "one" bank, I would say it's either ZION or FITB. We will see if I am right..
Special Report (Flu Alert)-10:58PM: Gotta tip the hat to my boy J on this, he might have drilled this trade. We are taking back to the Bird Flu Trade of 2006 baby, RF style. Here are more picks:
GILD, GNBT, HEPH, MEDX, NVAX, and BCRX.
Saturday, April 25, 2009
RF Portfolio and DOW 30 Analysis
Above is my analysis on the DOW 30, YTD. The stock highlighted in RED represented the stocks that are negative YTD. The stocks highlighted in yellow are financials. The last column on the right is my personal view or "coverage" on the stocks, in my personal view (see disclaimer at bottom, none of this is investment recommendations, just for educational purposes). My favorite two in the DOW is Intel and Proctor & Gamble. Intel have legs to giddy up but P&G is a conservative play that is good for a retirement account or IRA. UTX and IBM are not bad either. GM is the worst in the DOW and I personally believe the equity of will go to $0, whether the firm is solvent or not. Anyways, these are my personal views, in case you are building a portfolio of longer term plays.As for my current trading account, I have about 50% cash, 10% short exposure, and 40% long. Couldn't be happier. If the S&P can carry strength and bring that over to the futures, to hit my target (while we trade in the day), then we COULD bust higher. However, I believe we will go higher in the short-term (6 months) but it will be a sawtooth. This market is rather interesting, for the week we were FLAT! That is pretty remarkable, the market doesn't want to drop. Everyone at the bottom was saying, "we are going to 600, then possibly 500" and they were wrong. Now everyone is saying "we are going to drop 75-120 points on the S&P, this is a sucker's rally" but are they wrong? I tell you if we hold like this for another month, we will skyrocket higher because mutual funds are sitting on cash waiting for a pullback, but if we don't get it, then they will step in and drive it way higher. I am saying 1000+ on S&P by August, easy, if that is the case. There is alot of money still in cash and when that money is back in, this will take stocks way higher. For the longer-term (next 2-3 years), this market will be very volatile and difficult to trade because interest rates will rise and money will move into fixed income for nice yields (in my view). As always, RF will be prepared and the Trade247 followers will be ready.
Friday, April 24, 2009
RF Top Position: GIGM
As you know, I believe this firm is a great takeover target; however, I believe the firm is ridiciously undervalued. Looking through the numbers, I see various things that standout:
1. Cash and Equivalents has grown 24% from FY 07, to over $99 million (firm's market cap is only $370 million)
2. Net Income has grown 14% from FY 07 to over $42 million
3. Revenues grew 25% from FY 07 to FY 08
4. COGS are extremely low, allowing the firm to generate 81% Gross Margins in 2008
5. No long-term debt!
Business Units:
GigaMedia Limited conducts its online entertainment business in two business segments.
1. The gaming software segment develops and licenses online poker, casino, and sports betting gaming software solutions and application services, primarily targeting continental European markets.
2. The Asian online games segment operates a suite of play-for-fun online games, mainly targeting online gamers in Greater China.
Outlook for Next Quarter:
Gaming software business. In the first quarter of 2009, GigaMedia expects revenues to be down approximately 10 percent from the fourth quarter of 2008 due to the serious economic downturn in Europe and continued weakness of the euro against the U.S. dollar.
Asian online games business. The company expects first-quarter 2009 revenues to be up approximately 30 percent from the fourth quarter of 2008 driven by a seasonal uptick and strong promotional campaigns surrounding the Chinese New Year holiday, as well as a rebound in FreeStyle revenues following successful resolution of a fourth-quarter hacking issue.
Given the challenging operating environment, the company is taking appropriate measures to cut costs and improve efficiencies. For full year 2009, the company expects strong top and bottom line growth in its Asian online games business and targets financial results in-line with 2008 levels in its gaming software business.
1. Cash and Equivalents has grown 24% from FY 07, to over $99 million (firm's market cap is only $370 million)
2. Net Income has grown 14% from FY 07 to over $42 million
3. Revenues grew 25% from FY 07 to FY 08
4. COGS are extremely low, allowing the firm to generate 81% Gross Margins in 2008
5. No long-term debt!
Business Units:
GigaMedia Limited conducts its online entertainment business in two business segments.
1. The gaming software segment develops and licenses online poker, casino, and sports betting gaming software solutions and application services, primarily targeting continental European markets.
2. The Asian online games segment operates a suite of play-for-fun online games, mainly targeting online gamers in Greater China.
Outlook for Next Quarter:
Gaming software business. In the first quarter of 2009, GigaMedia expects revenues to be down approximately 10 percent from the fourth quarter of 2008 due to the serious economic downturn in Europe and continued weakness of the euro against the U.S. dollar.
Asian online games business. The company expects first-quarter 2009 revenues to be up approximately 30 percent from the fourth quarter of 2008 driven by a seasonal uptick and strong promotional campaigns surrounding the Chinese New Year holiday, as well as a rebound in FreeStyle revenues following successful resolution of a fourth-quarter hacking issue.
Given the challenging operating environment, the company is taking appropriate measures to cut costs and improve efficiencies. For full year 2009, the company expects strong top and bottom line growth in its Asian online games business and targets financial results in-line with 2008 levels in its gaming software business.
LVLT: Piper Jaffary Co. Vs. RF
Piper Jarray Initiaties Coverage on LVLT - $1 Price Target - Neutral Rating
Piper Jaffray & Co. initiates coverage on Level 3 Communications with a Neutral. Price target $1.Piper analyst says, "Level 3 owns long distance and local fiber throughout the US – a valuable set of assets. However, the assets were amassed through considerable debt that needs to be refinanced. Additionally, integration of these assets has been challenging and still needs to be completed. We think upside is capped until the company can reduce installation times and restore customer confidence, and re-finance its balance sheet."
RF Take:
I normally have been skeptical of many analysts but admit this analyst is rather good. Piper makes valid points and by far this is a highly speculative position I own. The good news is that the bond offering of $220 million in senior notes went well, which shows that investors feel optomistics. The bad thing is that the firm can never seem to meet or exceed expectations. In addition, the firm is highly levered.
In conclusion, Piper sees the stock price of $1and the stock really doesn't seem to a technical play anymore, so they could be right. However, I think the stock is "fair" and could offer some upside if investors can get over the liquidity fears.
Piper Jaffray & Co. initiates coverage on Level 3 Communications with a Neutral. Price target $1.Piper analyst says, "Level 3 owns long distance and local fiber throughout the US – a valuable set of assets. However, the assets were amassed through considerable debt that needs to be refinanced. Additionally, integration of these assets has been challenging and still needs to be completed. We think upside is capped until the company can reduce installation times and restore customer confidence, and re-finance its balance sheet."
RF Take:
I normally have been skeptical of many analysts but admit this analyst is rather good. Piper makes valid points and by far this is a highly speculative position I own. The good news is that the bond offering of $220 million in senior notes went well, which shows that investors feel optomistics. The bad thing is that the firm can never seem to meet or exceed expectations. In addition, the firm is highly levered.
In conclusion, Piper sees the stock price of $1and the stock really doesn't seem to a technical play anymore, so they could be right. However, I think the stock is "fair" and could offer some upside if investors can get over the liquidity fears.
RF POSITION UPDATE
LONGS:
ACH, CLF, CROX, DELL, DRYS, EXM, GIGM, JASO, LVLT, PCX, SONS, TSM
SHORTS:
SDS (IM LONG) and HOMEBUILDERS
ACH, CLF, CROX, DELL, DRYS, EXM, GIGM, JASO, LVLT, PCX, SONS, TSM
SHORTS:
SDS (IM LONG) and HOMEBUILDERS
RF is Back!
i'm back...here is what i have done
Sold all of ALU at $2.49 - for good gains
Bought SONS and DELL
Sold all of ALU at $2.49 - for good gains
Bought SONS and DELL
LVS
Cramer, you said to sell this Wednesday night at $5.15? Come on bro, follow Trade 247, LVS is at $6.45 now, the viewer lost 20+% from that!
Market Outlook
Futures a little weak but alot of come. The gov't may speak a little on the stress tests, so keep an ear out for some news on that. In addition, I would be selling some stocks on strength and adding some DXD, QID, or SDS, to reduce my risk in the short term.
As for some positions, I will probably kick the rest of my RUTH position at higher levels, hopefully around $2.30ish. In addition, I would watch LVLT and see if it can get some strength. If it can, it will move higher. CROX is ticking me off but we shall see what happens. I think copper is getting toppy right here, in the near term, so I might get short for a quick dollar.
Good luck and be back Monday. Will try to post today.
As for some positions, I will probably kick the rest of my RUTH position at higher levels, hopefully around $2.30ish. In addition, I would watch LVLT and see if it can get some strength. If it can, it will move higher. CROX is ticking me off but we shall see what happens. I think copper is getting toppy right here, in the near term, so I might get short for a quick dollar.
Good luck and be back Monday. Will try to post today.
Thursday, April 23, 2009
Im Off
Adios my friends, I will be in a conference all day tomorrow. As for today's action, I sold some steel names to raise cash. I sold some of my LVS but still have 300 shares. Fast Money just pumped the stock, so it has room to roll, thanks Macke and Adami!
As for tomorrow's trades, I wish you luck and much prosperity. I will try to post thoughts throughout the conference because I have stuff on my phone. I would look at cheap stocks with high short interests if you are playing on the long side. On the short side, I wouldn't play quite yet.
If you caught the RUTH breakout, your welcome. I sold some but am still holding 600 or 900 shares, can't remember of the top of my head. My portfolio is full of junk that continues to skyrocket, then I find myself buying more junk. PCX is a coal play and is junk but i figure, why not? If steel picks up, coal picks up. Coal has gotten the got the beat down and I want some exposure, but it's very risky.
Tune into tomorrow, I will try and navigate without the monitor
As for tomorrow's trades, I wish you luck and much prosperity. I will try to post thoughts throughout the conference because I have stuff on my phone. I would look at cheap stocks with high short interests if you are playing on the long side. On the short side, I wouldn't play quite yet.
If you caught the RUTH breakout, your welcome. I sold some but am still holding 600 or 900 shares, can't remember of the top of my head. My portfolio is full of junk that continues to skyrocket, then I find myself buying more junk. PCX is a coal play and is junk but i figure, why not? If steel picks up, coal picks up. Coal has gotten the got the beat down and I want some exposure, but it's very risky.
Tune into tomorrow, I will try and navigate without the monitor
Market Update
Rather boring day here on the street, perfect day to ride a bike or something. The S&P is stuck in the 830-860 but nothing really exciting to watch. The three options is to:
1) sit in cash
2) buy and hope for a short squeeze
3) build short positions
The first two are the best of the three because the market has some strength and it is telling the short sellers that you "can't short yet".
As for myself, I am still long and have a tiny short position in CAT and I am long SDS. I bought 50 shares in the mid $66's, so I don't want to add above that. As for the marekt, it looks like we can go either way.
1) sit in cash
2) buy and hope for a short squeeze
3) build short positions
The first two are the best of the three because the market has some strength and it is telling the short sellers that you "can't short yet".
As for myself, I am still long and have a tiny short position in CAT and I am long SDS. I bought 50 shares in the mid $66's, so I don't want to add above that. As for the marekt, it looks like we can go either way.
Market Outlook (Cheap Stock Edition)
Futures are up nicely today, mainly due to great earnings from tech last night. But honestly, the numbers from other firms like RTN, DO, AN, and Hershey have been great. We shall see if the short squeeze can continue, right now it's a coin flip but this rally will end soon. In the meantime, there are cheap stocks that are heavily shorted that can get squeezed more, if we continue higher. If you are buyer for trades here, look at heavily shorted stocks for a quick day or two day trade.
LVLT, CROX, RZ, ZLC, EMKR, SKS, ETFC, BEBE, GAP, CBL,
If you are a daredevil and like to ride a motorcycle through rings of fire, LVS could work but be careful!
As for ideas, I am prepared both ways long and short. The voices will tell me when to execute, so I live in no fear. According to the RF textbook, this rally could hit 900 and frankly maybe even higher since the market is overshort.
In conclusion, the rally has entered the 9th inning in my opinion, but the question remains, how long will this inning be played? There could be some heavy hitters coming aboard..
LVLT, CROX, RZ, ZLC, EMKR, SKS, ETFC, BEBE, GAP, CBL,
If you are a daredevil and like to ride a motorcycle through rings of fire, LVS could work but be careful!
As for ideas, I am prepared both ways long and short. The voices will tell me when to execute, so I live in no fear. According to the RF textbook, this rally could hit 900 and frankly maybe even higher since the market is overshort.
In conclusion, the rally has entered the 9th inning in my opinion, but the question remains, how long will this inning be played? There could be some heavy hitters coming aboard..
Wednesday, April 22, 2009
The "Voices"
As you know, the voices of Rowdy Roddy Piper told RF when the financials would bottom in early March (see below link for the call) and now he is saying the short-term market top will be made in the next 10 days. As you also know, RF is slick in style and is rather cautious when it comes to top or bottom callers. With that being said, I will play accordingly and post everything I do, so the Trade247 followers can bank cash. I will be doing some weird liquidations here soon because I am transfering accounts and creating new funds, so I will comment accordingly but play it safe here.
RF Position Update
I own too many stocks so here are few highlights.
OWW - Speculative play here but Orbitz is turning around. The industry is highly competitive; however, the CEO came from a top competitor and is doing work. Today, they announced that they are cut hotel-booking fees to attract more customers and boost revenue. The CEO also said margins will not be damaged because the cost cutting strategy is working and will offset the price reductions. If this is successful, the amount of bookings will increase dramatically, benefiting revenues and earnings signficantly. If they can get it down, the stock can print $4 over the long haul.
FCS, TSM, and ASX - I love semiconductors and believe the rally can continue. When the short-term bottom was in place, I believed technology or energy would lead us out; however, Carter Worth at Oppenhiemer said semiconductors would and he flat out drilled it. As far as I am concerned, the consumer PC industry has bottomed, so buy accordingly. Buy chips on dips!
LVS - Second best casino, next to WYNN. The firm is undervalued and has significant upside because the market has discounted the fact that they have liquidity. This casino has down a lot of good things, like postponing casino projects in late 2008 to conserve cash and today announced they are repurchasing 880 million in debt to reduce interest expenses. Creditors like LVS, so they have real partners. However, I will admit WYNN is the top casino but it's too rich at these levels, compared to LVS.
I am off to watch the hockey, be back tomorrow.
OWW - Speculative play here but Orbitz is turning around. The industry is highly competitive; however, the CEO came from a top competitor and is doing work. Today, they announced that they are cut hotel-booking fees to attract more customers and boost revenue. The CEO also said margins will not be damaged because the cost cutting strategy is working and will offset the price reductions. If this is successful, the amount of bookings will increase dramatically, benefiting revenues and earnings signficantly. If they can get it down, the stock can print $4 over the long haul.
FCS, TSM, and ASX - I love semiconductors and believe the rally can continue. When the short-term bottom was in place, I believed technology or energy would lead us out; however, Carter Worth at Oppenhiemer said semiconductors would and he flat out drilled it. As far as I am concerned, the consumer PC industry has bottomed, so buy accordingly. Buy chips on dips!
LVS - Second best casino, next to WYNN. The firm is undervalued and has significant upside because the market has discounted the fact that they have liquidity. This casino has down a lot of good things, like postponing casino projects in late 2008 to conserve cash and today announced they are repurchasing 880 million in debt to reduce interest expenses. Creditors like LVS, so they have real partners. However, I will admit WYNN is the top casino but it's too rich at these levels, compared to LVS.
I am off to watch the hockey, be back tomorrow.
Old RF Favorite - NTGR
Great Quarter. Netgear reports EPS of $0.05 actual vs. -$.08 estimate, beats by $0.13 cents
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=PR&date=20090422&id=9827865
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=PR&date=20090422&id=9827865
Market Wrapup
Gotta head to a meeting, so I will continue later. In short, the rally still has legs, thanks to sweet tech earnings, via APPL, EBAY, NTGR, BRCM. If you want to buy longs, focus on heavily shorted stocks in hot sectors and play small. In addition, keep a short time horizon. I am short the S&P right now, via SDS, and I feel we are getting a little toppy here but the rally isn't over.
Be back later..
Be back later..
Can apple lead the way
If apple kills earnings and is positive in outlook, the market will go way higher this week. Its all up to apple.
Advice
I am holding a lot but will use strength to sell. Best advice is to be patient and once again keep high cash levels, to make some loot, buying stocks on the cheap
Market Outlook - April 22
Futures are down a little but I feel the optimism in the air. I am bringing back the golden bull to help take us to a rich path of prosperity. I tell you a sector to watch is Airlines. I CAL at $8 but sold at $10.50, way to early but got in monday LUV through a nice call spread (June month). Airtrain - AAI - just crushed earnings, 27 cents actual vs. 4 cents projected. The cost savings in fuel are amazing, plus the airlines are doing a great job navigating the routes, reducing operational costs. The sector is heavily, heavily shorted, so there could be big wins here.
As for the rest of the market, I am still a litte skeptical. If I make purchases, it will be stocks under $5 because I love the fun. In addition, I will continue to hawk technical breakouts, for quick wins, like in LVLT, FEED, and LDK.
In short, today will be a big test. The market is heavily shorted right now, so I think we can go either way. The bulls and bears will slug it out but if the bulls get an upper hand, the squeeze can begin and take us up another 30 points on thee S&P
As for the rest of the market, I am still a litte skeptical. If I make purchases, it will be stocks under $5 because I love the fun. In addition, I will continue to hawk technical breakouts, for quick wins, like in LVLT, FEED, and LDK.
In short, today will be a big test. The market is heavily shorted right now, so I think we can go either way. The bulls and bears will slug it out but if the bulls get an upper hand, the squeeze can begin and take us up another 30 points on thee S&P
Tuesday, April 21, 2009
Solar Protection
SPWRA reports earnings Thursday, so this will be a very volatile day for solar. I own a little JASO here but I think I will purchase some put protection, to be safe. The May $2.50 puts are $.20 cents, so for $20, I can protect myself through some insurance. I suspect that solar earnings will not be great since oil has been relatively cheap but the key will be the outlook. Particularly, growth estimates and how stimulus packages are helping them.
In conclusion, if you own solar names, protect yourself and expect volatility.
In conclusion, if you own solar names, protect yourself and expect volatility.
Update
Shippers are rocking. The tape looks a little weak, so I am not into buying anything right now. Note, I always say that, then go on a buying spree buy 3pm. Be cautious and don't be afraid to book some profits. I am a little confused, so I might be take some profits. Be back in a few.
Update. I want the sp futures to get over 840 before I get all giddy
Update. I want the sp futures to get over 840 before I get all giddy
FEED
Yes its doing the electric pogo and dancing like crazy
Still own a boatload of calls and haven't sold
RF might win really big here
Still own a boatload of calls and haven't sold
RF might win really big here
Shippers
The Baltic Dry Index is turning up good, so I like shippers on dips. The bottom is in the shippers!
EXM and GNK are the top two.
EXM and GNK are the top two.
Market Outlook - April 21
Today looks to be a rather boring day, if the futures indicate what will happen. Early this morning futures rebounded nicely; however, Dupont came out with earnings that were below estimates and guided lower for 2009, sending the futures straight down. The S&P looks a little weak here but I don't believe this short-term rally is over. The S&P needed a solid 5-10% correction and yesterday represented about a 4.5% pullback. I feel we can pullback more on the S&P, and am expected a S&P short-term bottoming range from 800-828. The key once again is to buy the dips and sell the rips. I will remember this on the next rally. As for shorting, I think we are too thin and could catch a bounce rally, so I would rather not short here, unless we break 800.
As for buying, I like specific names that focus on telecommunications (post when position is complete), semiconductors (FCS, INTC, RFMD, CIEN), technology, shipping (I own EXM and DRYS), real commodities (i was a little early but names like PCU, FCX, CLF, MT, STLD, AA, ACH, KALU) and specific industrial plays (ill post once my position is complete). If we continue to slide, be wary and cautious of firms that have had huge runups and rich valuations (in terms of EBITDA multiples, etc) especially if the firm's earnings prospects could be hampered by currency flucuations/changes or other various factors tied to the economy.
RF Top Pick: GIGM for a takeover play....you can also buy cheap May put protection at the $5 strike.
Also keep an eye of FEED, the chart is looking good!
UPDATE (7:05A) - WOW earnings are rather weak, UTX is a good measure of the economy and they are posting a wide range of guidance of $4-$4.50 vs. $4.20 estimates. Q1 revenues below estimates and profit just met expectations. S&P futures at 827...
As for buying, I like specific names that focus on telecommunications (post when position is complete), semiconductors (FCS, INTC, RFMD, CIEN), technology, shipping (I own EXM and DRYS), real commodities (i was a little early but names like PCU, FCX, CLF, MT, STLD, AA, ACH, KALU) and specific industrial plays (ill post once my position is complete). If we continue to slide, be wary and cautious of firms that have had huge runups and rich valuations (in terms of EBITDA multiples, etc) especially if the firm's earnings prospects could be hampered by currency flucuations/changes or other various factors tied to the economy.
RF Top Pick: GIGM for a takeover play....you can also buy cheap May put protection at the $5 strike.
Also keep an eye of FEED, the chart is looking good!
UPDATE (7:05A) - WOW earnings are rather weak, UTX is a good measure of the economy and they are posting a wide range of guidance of $4-$4.50 vs. $4.20 estimates. Q1 revenues below estimates and profit just met expectations. S&P futures at 827...
Monday, April 20, 2009
RF Position Update: GIGM
Look at the call volume at the $7.50 and $10 strike...very unusual activity and it exceeds the open interest!
RF Position Update: LVS
JP Morgan Upgrades LVS to Overweight - Price Target - $8
Highlights:
-JPMorgan analyst Joseph Greff has a year-end price target of $8.
-Greff gave for the improved outlook were "reasonable near-term and achievable expectations" for the company's Las Vegas Strip properties
-Those properties are outperforming their peers; stabilization of its Macau properties' operations and the potential for continued improved investor sentiment in front of its early 2010 opening of its Singapore property.
Highlights:
-JPMorgan analyst Joseph Greff has a year-end price target of $8.
-Greff gave for the improved outlook were "reasonable near-term and achievable expectations" for the company's Las Vegas Strip properties
-Those properties are outperforming their peers; stabilization of its Macau properties' operations and the potential for continued improved investor sentiment in front of its early 2010 opening of its Singapore property.
Market Wrapup
Pure blood bath today people. The market had a nice pullback, which was definetly needed; however, I wish I could have took more profits on Friday. We pulled back about 4% on the S&P and we can pullback another 1-3% probably but I do not feel comfortable getting short here. I added more GIGM, hoping for a takeover bid. In addition, I am back into shippers via EXM and DRYS. I also added LVS because it got a great upgrade from JP Morgan (to Overweight from Neutral) however, the market dissed it with the sell off.
On a day like this, it is important to keep a fresh mind about trading. Many "rookies" are ready to sell everything because of fear but the worse investment decisions are made on fear. For example, follow me on this story. Let's say we had a CROCS addiction and had to go buy a pair everyday, to collect all the colors. So, you call me up and say "RF, we got to go to MACY's today and buy CROCS, I am coming to get you and we are there". I say "ok" and we walked into the store and they are about $30 a pair. Everyone is buying them, so you say ok, why not, I will buy a pair. So we leave, and tomorrow you call me again saying "we need to go buy more CROCS". I say ok, so we go to Macy's and then now they are $10 a pair but no one is buying them. Are you going to buy less? NO, you will probably buy more or buy a pair for $20 cheaper and be happier.
That is the way you got to think about the market. Everyone wanted to buy stocks at 870 on the S&P but not the S&P is at 830 and people are running the of the market (aka Macy's) in fear. The market doesn't make sense alot because investors act very irrational. The moral of the story is that the stock market is weird and people buy on emotion. If you were a buyer at 870 on the S&P, why would you not be a buyer at 830? Nothing has changed from Friday til today, ya know? A big key to winning is to make money of other investor's irrational moves. The best way to do that is keep a high cash level, so if you buy high, you can cost average down to make more $$.
Lastly, I will leave you with some nightly reading.
1. Someone guy from Colorado wrote an article on "The Best Damn China Stock Under $5 Period" yesterday and of course it was FEED lollllll
http://www.examiner.com/x-3765-Denver-Stock-Market-Examiner~y2009m4d19-The-best-damm-China-stock-under-5-period
2. Here is more information on the GIGM takeover rumors. Note the May Calls were on fire today.
http://www.optionmonster.com/news/article.jsp?page=commentary/in_the_news/ma_speculation_boosts_gigamedia_options_33019.html&cookie_test=0
On a day like this, it is important to keep a fresh mind about trading. Many "rookies" are ready to sell everything because of fear but the worse investment decisions are made on fear. For example, follow me on this story. Let's say we had a CROCS addiction and had to go buy a pair everyday, to collect all the colors. So, you call me up and say "RF, we got to go to MACY's today and buy CROCS, I am coming to get you and we are there". I say "ok" and we walked into the store and they are about $30 a pair. Everyone is buying them, so you say ok, why not, I will buy a pair. So we leave, and tomorrow you call me again saying "we need to go buy more CROCS". I say ok, so we go to Macy's and then now they are $10 a pair but no one is buying them. Are you going to buy less? NO, you will probably buy more or buy a pair for $20 cheaper and be happier.
That is the way you got to think about the market. Everyone wanted to buy stocks at 870 on the S&P but not the S&P is at 830 and people are running the of the market (aka Macy's) in fear. The market doesn't make sense alot because investors act very irrational. The moral of the story is that the stock market is weird and people buy on emotion. If you were a buyer at 870 on the S&P, why would you not be a buyer at 830? Nothing has changed from Friday til today, ya know? A big key to winning is to make money of other investor's irrational moves. The best way to do that is keep a high cash level, so if you buy high, you can cost average down to make more $$.
Lastly, I will leave you with some nightly reading.
1. Someone guy from Colorado wrote an article on "The Best Damn China Stock Under $5 Period" yesterday and of course it was FEED lollllll
http://www.examiner.com/x-3765-Denver-Stock-Market-Examiner~y2009m4d19-The-best-damm-China-stock-under-5-period
2. Here is more information on the GIGM takeover rumors. Note the May Calls were on fire today.
http://www.optionmonster.com/news/article.jsp?page=commentary/in_the_news/ma_speculation_boosts_gigamedia_options_33019.html&cookie_test=0
Key Things to Watch
Watch the S&P around 830...it should be firm support, if we bust through, its a little scary. If we hold it's a good level to add some longs.
Also, watch solar here. Solar stocks can become great short selling targets because the stocks have rich premiums. Keep tight stocks and be careful if you are long.
Also, watch solar here. Solar stocks can become great short selling targets because the stocks have rich premiums. Keep tight stocks and be careful if you are long.
Market Update
I figured I would take a quick minute to discuss today's actions. Simply put, this is a very sharp selloff. Frankly, it's good for the market but I wished I wouldn't sold off a few more names Friday, but oh well. For the day, I'm off but not too bad, thanks to JAVA.
I suspect that the S&P will move closer to 800 because banks fears are back in the market. I read the BAC conference call and he said many things that were alarming. One is that credit is still difficult to obtain and banks will get worse before they get better. Their quarter was unbelievable, estimates were $0.04 and they made $0.40. Clearly the merger with MER and CFC are working.
As for me, I really don't want to sell here. I think we could bounce because of earnings week. With that being said, we could also fall harder. Some good hedges that I own and like are SDS and QID. If you are fully invested, these are fair hedges. Shorting the SPY or QQQQ are also good for hedges. As for buying, I added to my GIGM position (now my biggest holding) and LVS. I also like real commodities, for a long play. As for shorts, look for the momentum names that were hot into the rally, those are normally the ones that go back down.
Lastly, for the S&P, I think we can slide to 830 and if we break, could touch 800. Trade accordingly.
I suspect that the S&P will move closer to 800 because banks fears are back in the market. I read the BAC conference call and he said many things that were alarming. One is that credit is still difficult to obtain and banks will get worse before they get better. Their quarter was unbelievable, estimates were $0.04 and they made $0.40. Clearly the merger with MER and CFC are working.
As for me, I really don't want to sell here. I think we could bounce because of earnings week. With that being said, we could also fall harder. Some good hedges that I own and like are SDS and QID. If you are fully invested, these are fair hedges. Shorting the SPY or QQQQ are also good for hedges. As for buying, I added to my GIGM position (now my biggest holding) and LVS. I also like real commodities, for a long play. As for shorts, look for the momentum names that were hot into the rally, those are normally the ones that go back down.
Lastly, for the S&P, I think we can slide to 830 and if we break, could touch 800. Trade accordingly.
RF Sell JAVA
Sold 80% of my position at $9.22
Put adjusted gain of 47%
Made $$$$
Note, LVS just got upgraded!
Put adjusted gain of 47%
Made $$$$
Note, LVS just got upgraded!
Sunday, April 19, 2009
GE
If you think GE is really a "good buy", you might want to think again....Next week I will release an RF exclusive report on GE
Market Outlook - The Week of April 20th
My friends we have been doing extremely well. I sit back now when I started my blog on March 7th and my trading account was up 58% YTD, now it’s up to 198% YTD. We have had a blast and rode great winners, like TXCO, UA, FAS, TNA, AXP, LVLT, DRYS, LDK, FEED, TTWO, TIE, FDO, SSO, DELL, FXI, TXN… the list goes on.
This week coming up, I will be taking a little profit, for my own sanity (plus I will be out of town Friday). This is a monstrous earnings week, so if earnings are good, we might not get a pullback, instead we will go much, much higher. However, I don’t think that will be a case. We need a nice “pause” for the health of the market and for the sanity of mutual fund managers. The VIX continues to creep lower (by the way, I posted a live quote on the left side) and mutual fund money isn’t even back into the market, so I am betting they are talking down the market, so they can get in (but that is if we pull back). If we do pullback, we want high cash levels, so we can buy great stocks on the cheap and make some serious $$$.
I will sell off some stuff, might even buy more, who knows. I got some great derivative trades in mind, so hopefully the market will turn the number I want to see, so I can execute them. You know my holdings, so I will keep them in check and trade accordingly. In addition, I might add some short exposure but I might not. I might just sit in cash, eat jelly beans and play golf all day, haven’t really decided. My best advice is to stay in cash unless you know the story behind short. I made a killin’ shorting REITS in January/February but I also read over 980 pages of documents relating the financial stability of commercial real estate, in addition to sell-side research on individual firms. Point being is I did the homework because nothing is more risky than shorting, the most you can make is 100% and your losses are unlimited. If you HAD to short, the RF blessing would be to play put spreads on individual firms and maybe ETFs, but I am beginning to hate ETFs. Inverse ETF’s are ok but the ONLY WAY I would buy them is to buy calls against them. For example, I own FAZ but have sold calls on them already to help myself. So, if you are looking to short and had to use inverse ETF’s (say the FAZ), buy the FAZ and buy out of the money calls on the FAS to protect yourself or sell calls on the FAZ. Otherwise, you are gambling and playing with fire really.
Lastly, I appreciate the visits. We are at 3,700 views in a month and rolling good! Feel free to pass the blog on to friends, family, message boards, coworkers, etc. The comments have been very, very kind and mean a lot. I have been trading for 6 years and love this game! I hope you have enjoyed the blog, may the community expand and bring great trading strategy!
This week coming up, I will be taking a little profit, for my own sanity (plus I will be out of town Friday). This is a monstrous earnings week, so if earnings are good, we might not get a pullback, instead we will go much, much higher. However, I don’t think that will be a case. We need a nice “pause” for the health of the market and for the sanity of mutual fund managers. The VIX continues to creep lower (by the way, I posted a live quote on the left side) and mutual fund money isn’t even back into the market, so I am betting they are talking down the market, so they can get in (but that is if we pull back). If we do pullback, we want high cash levels, so we can buy great stocks on the cheap and make some serious $$$.
I will sell off some stuff, might even buy more, who knows. I got some great derivative trades in mind, so hopefully the market will turn the number I want to see, so I can execute them. You know my holdings, so I will keep them in check and trade accordingly. In addition, I might add some short exposure but I might not. I might just sit in cash, eat jelly beans and play golf all day, haven’t really decided. My best advice is to stay in cash unless you know the story behind short. I made a killin’ shorting REITS in January/February but I also read over 980 pages of documents relating the financial stability of commercial real estate, in addition to sell-side research on individual firms. Point being is I did the homework because nothing is more risky than shorting, the most you can make is 100% and your losses are unlimited. If you HAD to short, the RF blessing would be to play put spreads on individual firms and maybe ETFs, but I am beginning to hate ETFs. Inverse ETF’s are ok but the ONLY WAY I would buy them is to buy calls against them. For example, I own FAZ but have sold calls on them already to help myself. So, if you are looking to short and had to use inverse ETF’s (say the FAZ), buy the FAZ and buy out of the money calls on the FAS to protect yourself or sell calls on the FAZ. Otherwise, you are gambling and playing with fire really.
Lastly, I appreciate the visits. We are at 3,700 views in a month and rolling good! Feel free to pass the blog on to friends, family, message boards, coworkers, etc. The comments have been very, very kind and mean a lot. I have been trading for 6 years and love this game! I hope you have enjoyed the blog, may the community expand and bring great trading strategy!
RF Position Update: GIGM
I took a 500 share stake in this firm a few days back. The company is behind EverestPoker.com and has posted strong fundamental results, showing revenue increases, YOY of about 25% in growth. The firm also reported a 44% increase in net income. The stock is selling around $6.80 and has about $1.35 in net cash per share, representing about 20% of the stock's value. The balance sheet is very rich, with only a tiny bit of short term bank notes, for debt. However, even with these solid fundamentals, an article was released today highlighting the main reason why I bought it - it will probably be bought in the next 12 months. Online-casinos.com confirmed my thoughts and released this about 6 hours ago.
http://www.online-casinos.com/news/news8539.asp
There is another takeover candidate I am buying but want to build my position bigger first, before I post.
http://www.online-casinos.com/news/news8539.asp
There is another takeover candidate I am buying but want to build my position bigger first, before I post.
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