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Victor Niederhoffer the greatest speculator

Victor Niederhoffer the self proclaimed greatest speculator in the history of speculation is blaming Fed Chairman Bernanke for his recent losses. The first rule in speculation is, you are responsible for your own losses. Time to read Chapter 5 of The Education of a Speculator

Victor Niederhoffer : Daily Speculation

A much better example of the disaster of central planning is the recent monthÂ’s destruction of wealth set off by the coordinated set of plans to jawbone the economy and inflation down set off by the Fed Open Market Meeting of May 10, 2006. It started with an attempt to show that inflation was rampant, the public didnÂ’t get it, and the markets needed a dose of tightening to bring things back to proper order. The attempt was imposed from above based on the vision of a single personage, who coordinated a series of staged speeches about how vigilant the Fed was and how concerned about the failures of the knowledge of individuals they were. The loss of wealth that it set off was in the 3 to 4 trillion range as all emerging markets, Asia, Europe, and Latin America declined 10 to 20% in lockstep from a 45 trillion or so base. By June 29, 2006 it was all over. The last open market meeting emphasized how restrained inflation was, how the Fed would be guided by markets in the future, and how the tightening might be near its end. The world markets recovered an average of 5% from their most recent lows, and will undoubtedly move back to their former levels in the due course of reasonable time, like a few months. But what deadweight costs, what frictional costs, what individual hardship and poverty was created by it all.

What fools these central planners must think we are. What arrogance of power Khrushchev, Mao, Fred Lee and Ben Bernanke displayed in trying to consolidate power about them. What stooges the media and other bit players in the debacle were as they fanned the flames of total economic Armageddon as if puppets in a performance.

Let the story of this recent disaster in centralized planning, this superposition of the vision of a single leader for the wisdom of the market, this attempt to consolidate power behind a single voice (possibly engendered by the pretty woman transgression), serve as a vivid, and compact episode in the US of why market based solution, and pluralism, and suffering the consequences of failure are so necessary to the common good. And let us learn how to profit from such orchestrated forays in the future.

Stocks on the move

Some interesting stocks on my watchlist for today. Some of these have good earnings.

BVX,Bovie Medical Systems
CGPI,Collagenex Pharmaceuticl
CLDN,Celadon Group Inc
EGY,Vaalco Energy Inc
EZPW,Ezcorp Inc Cl A
IBCA,Intervest Bncshs Cp Cl A
ININ,Interactive Intelligence
LBIX,Leading Brands Inc
LVS,Las Vegas Sands
MEK,Metretek Technology Inc
NGA,N Amer Galvanizing & Coatings
TLG,Target Logistics Inc
ZUMZ,Zumiez Inc
ZVXI,Zevex Internat Inc

Stock charts explained

A reader has written enquiring what are the different colored lines and indicators in the charts I posted and how do I use them.

LVS, Las Vegas Sands

These graphs have been prepared using TC2005 , a charting and data program I use and recommend. It has very reliable data feed and easy to use functionality and its very economical.

The yellow, magenta and blue lines below the price chart graph are basically 5, 15 and 25% price levels from six month high price. Used to enter, add to positions and move stops.

The second pane has 4MACD and yearly growth level . I do not use the 4MACDs anymore, but if you want a detailed description of them and how to use them you will find it here. The orange line in the second pane indicates that yearly growth for the stock is above 100%

The third pane has volume, and yellow and white lines. White lines signal quarterly price growth above 35%. The yellow pyramids indicate days on which there was price and volume threshold signal.

Stocks on the move

LVS, Las Vegas Sands
Good times bad times people like to gamble. The casino sector is witnessing some renewed strength and LVS, Las Vegas Sands has good earnings. Also keep an eye on PENN, Penn National Gaming which is within 15% of its all time high.

CME, Chicago Mercantile Exchange
Like the casinos who always make money, the exchanges always make money. This one is near all time high,probably headed to 600. It also has low float. Keep an eye on other exchanges also like BOT, Cbot Holdings Inc. and NYX, New York Stock Exchange.

EXPD, Expeditors International Of Washington Inc.

This is the only company whose filings I read regularly. The company has great sense of humor. Sample this answer to an analyst question.

What caused your first quarter 2006 depreciation and amortization expense to decline sequentially?

While it is true that depreciation and amortization expense recorded in the first quarter of 2006 was down some $53,000 from the amount recorded for the fourth quarter of 2005, we have a tough time considering this to be very significant.
During the fourth quarter of 2005, we increased the amount we recorded in Australia as depreciation expense in accordance with GAAP in anticipation of paying what is known as “dilapidations” on the ultimate termination of a leasehold. We also fully depreciated a forklift in one location (hey, you are asking us to explain a $53,000 difference). We also had a couple of locations in the United States where we had slightly extended our lease term after we had nearly finished amortizing tenant financed lease hold improvements.
Perhaps the concept of paying dilapidations needs a bit of additional explanation. Any college student likely understands that in order to get a damage deposit back, it is advisable to put some toothpaste in the nail holes, clean the fridge and shampoo the carpet. Commercial rental agreements in certain backward locations have a similar concept. These are places where they likely drive on the left hand side of the road. They also spell funny, but we digress.
Rather than having a clause that allows for normal wear and tear, these leases require the tenant to “return the premises to original status” or pay the landlord the cost. Just as the carpet is always dirty in a landlord’s opinion, no matter how hard you worked on it, a freight forwarder cannot escape a lease without making a substantial payment to these lords of the realm.
GAAP requires that we anticipate these dilapidation accruals by “capitalizing” our best estimate of what this dilapidation amount will be at the inception of a lease and booking a related liability that will be paid at the conclusion of the lease. We then systematically write this asset off over the life of the lease as additional depreciation expense leaving only the liability.
As we approach the end of a lease, we sometimes realize that we are going to need a couple of extra toothpaste tubes. Having reached this conclusion, we book an increase to the “dilapidation accrual” and make a cumulative “catch up” adjustment to depreciation expense. In this manner, we will have expensed all of our toothpaste obligation.

You must also read answer to this analyst question to understand employee stock options acounting.
What are Expeditors’ expectations for stock option expense impact during 2006 and would you please discuss what you anticipate for the first quarter?

Stocks with all time high volume

Lot of action in ETFs yesterday. The auto parts stores sector is being taken to cleaners. Expect lot of volatility today linked to quarter end Index/ portfolio rebalancing. There will be lot of meaningless volume spikes today.

AAP,Advance Auto Parts Inc
AOG,Aurora Oil & Gas Corp
DCA,Div Cap Rlty Inc Alloc Fd
DOG,ProShares Short Dow30 ETF
EPHC,Epoch Holding Corp
IBCA,Intervest Bncshs Cp Cl A
IEZ,iShares Dow Jones US Oil Equipment & Services Index Fund ETF
IFN,India Fund
LORL,Loral Space & Communications Inc
MCBI,Metrocorp Bancshares Inc
NWRE,Neoware Inc
QRCP,Quest Resource Corp
RAME,Ram Energy Resources Inc
TPP,Teppco Partners (L.P.)
TXUI,Texas United Bancshares Inc
UQM,Uqm Technologies Inc
XME,SPDRs Metals & Mining ETF

FOMC Statement

Release Date: June 29, 2006
For immediate release

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 5-1/4 percent.

Recent indicators suggest that economic growth is moderating from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.

Readings on core inflation have been elevated in recent months. Ongoing productivity gains have held down the rise in unit labor costs, and inflation expectations remain contained. However, the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures.

Although the moderation in the growth of aggregate demand should help to limit inflation pressures over time, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information. In any event, the Committee will respond to changes in economic prospects as needed to support the attainment of its objectives.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Jeffrey M. Lacker; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen.

In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 6-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, and Dallas.
2006 Monetary policy

No Google Checkout for snakeoil

If you are running a investment newsletter you can not use Google Checkout to promote your business.

Google Checkout Prohibited Products
Financial products, services, and stored value :Investment consulting, stock brokerage, manual cash disbursements, money orders, traveler's checks, and stored value cards
Securities:Stocks, bonds, or related financial products
Subscriptions:Subscriptions to online or offline content (including magazines and newspapers)

Stocks on the move

VSE, Verasun Energy Corp
The recent ethanol IPO had a good day yesterday. Rest of the ethanol stocks also showed some selective strength.

HANS, Hansen Natural Corp
The energy drink company HANS continues to show excellent relative strength. It might make a move pre earnings.

GRMN, Garmin Ltd
Navigational aids and GPS equipment maker GRMN is at all time high.

CHAP, Chaparral Steel Company
Steel makers have not been decimated much by the recent correction. Number of steel makers are approaching their range high. Keep a eye on this sector. Also keep an eye on Titanium sector which continues to act well.

NTRI, Nutrisystem Inc

The diet industry continues to be an attractive investment destination. Also look at MED which had good move yesterday.

Google Checkout is not Paypal

There was considerable speculation that Google is set to launch a Paypal Killer. The Google Checkout which has been launched today is not a Paypal clone. It is basically a checkout system or a payment processing system. It is more like Amazon payment system than Paypal.

  • Credit card information is stored by Google
  • You can checkout on participating retailers using your Google Checkout account.
  • Google maintains transaction history which you can access.
  • There is merchant rating feature.
  • It is not a person to person, stored value system like Paypal.
  • It is tightly integrated with Google Adwords and more geared towards advertisers.

Nothing revolutionary in Google Checkout. Most likely move for Google stock= ?.

GOOG, Google Inc.

Stocks with all time high volume

The market continues to await the Fed rate hike. The real action will only start after that. The first move after Fed rate hike is usually the false move.

AAWW,Atlas Air Worldwide Holdings Inc
AOI,Alliance One International Inc
CMZ,Compton Petroleum Corp
FXB,Rydex CurrencyShares British Pound Sterling Trust ETF
GJT,Synthetic Fixed Income Securities Inc
MVV,ProShares Ultra MidCap400 ETF
MYY,ProShares Short MidCap400 ETF
PLM,PolyMet Mining Corp
PSQ,ProShares Short QQQ ETF
SH,ProShares Short S&P500 ETF
TLG,Target Logistics Inc
TNCC,Tennessee Commerce Bancorp Inc

Goldman Sachs and the World Cup

Posted on 6/28/2006
Goldman Sachs has a extensive report on the World Cup and the participating countries. The report includes Goldman comments on participating countries economics.
They also have probabilities of most likely World Cup Winner.

Goldman Sachs World Cup Probability Study
As an aid to our guesses as to who is going to reach the
semi-finals, we have calculated the following intriguing
We have combined official FIFA rankings and odds from
different bookmakers to create a probability model that
penalizes teams according to how tough their schedule is
on average.
Our model-probabilities are not too far from consensus.
Brazil is the undisputed favorite, with a 12% probability
of winning the Cup. England is the runner up, although
there seems to be a very close probability clustering
between positions 2 and 5, with England, Spain, France,
Holland and Argentina all with, broadly speaking, similar
chances of winning.
Germany, the host, is the 8th most likely team to win the
Cup, with a 5.5% probability. We did not award
Germany any bonus probability, despite some (debatable)
evidence that hosts do have an advantage. Portugal, Italy
and the Czech Republic all lie very close to Germany in
terms of probabilities. The USA, ranked 13th, has a slim,
but not negligible, probability (2.2%) of winning the
tournament. Asian and African countries generally rank
at the bottom end of the table.
All said, however, we look forward to another exciting
competition full of surprises and outstanding games from
outsiders and underdogs. That is, after all, what makes
football so popular.
Themistoklis Fiotakis

Country Model Probability
Brazil 12.4%
England 8.6%
Spain 8.3%
France 8.3%
Netherlands 8.0%
Argentina 7.4%
Portugal 5.8%
Germany 5.5%
Italy 5.3%
Czech Republic 5.0%
Mexico 4.2%
Sweden 3.6%
USA 2.2%
Croatia 1.8%
Poland 1.6%
Ivory Coast 1.2%
Switzerland 1.2%
Ukraine 1.1%
Paraguay 1.1%
South Korea 0.9%
Japan 0.9%
Tunisia 0.9%
Ecuador 0.8%
Serbia and Montenegro 0.6%
Australia 0.6%
Costa Rica 0.6%
Iran 0.5%
Ghana 0.4%
Saudi Arabia 0.4%
Togo 0.3%
Angola 0.3%
Trinidad and Tobago 0.2%
Who Will Win The World Cup?
GS Probabilities
Note: This table translates Fifa ranks into odds and combines
themw ith the average odds given by bookies to create an "initial
probability". Then, it penalizes the countries according to how
tough their schedule is and it spits out the final probability as per
the table above.

GM up 35% in three month

GM, General Motors

Likelihood of bankruptcy high for troubled automaker as it grapples with union woes, lack of revenue growth —and an SEC investigation
Turnaround would be a "harder logistical and managerial task than the invasion of Iraq"
Fortune February 2006

If you had bought GM when this cover story appeared you would be richer by 35%. The magazine cover indicator works very well for stocks.

Trend following

Jeremy Siegel does not like trend followers
Finance professor Jeremy Siegel believes emerging market stocks have been in a bubble fueled in part by skyrocketing commodities prices, since many emerging economies supply the world with metals, fuels and other commodities. Also, trend-following investors have plowed more and more money into emerging markets as they chased past results, bidding stock prices ever higher. "I don't like markets that just follow trends," he says. "They attract trend followers who disregard fundamentals, and they all end this way eventually." Foreign stocks in developed markets "were not in quite as much of a bubble, but there are trend followers there, too," he adds.

Most short-term stock players are trend followers

If, as argued last Monday, the efficient market theory does not always work, when markets get over-heated, another, not quite academic, theory comes into play. Even after most participants have recognised that the prices are too high, that they have gone up too fast, and that, therefore, there is an increasing possibility of a sharp correction, they go on buying. (Indeed, most short-term players are trend followers).

The hope is that they would still be able to exit at a profit, because a "greater fool" will come along to buy the shares at an even higher price! This does work so long as the trend continues, but the risk is that the greater fool may turn out to be yourself!

Warren Buffet is not a trend follower

Buffett said investors should focus on things that are important and knowable. One attendee asked Buffett and Munger a big-picture question involving currencies, interest rates and current account deficits.

I loved Buffett's answer and I think it helped illuminate some of the differences between his and Munger's approach (rooted in the old-school tradition of investing) and the more populous speculative arena: "We don't play big trends. That's a bit too macro for us," he said.

Buffett said, excluding agricultural products, they do see something of a bubble in metals (especially copper) and oil. He said, like most trends, the fundamentals drive it in the beginning. And what the wise man does at the beginning, the fool does at the end. As trends form and gather momentum, they attract a speculative element. Eventually, that element takes over, and then you are in the danger zone. "We are seeing that in the commodity area," Buffett opined.

Stocks with all time high volume

The ETFs lead in volume. The market action looks set for October turnaround. Till then it will be dreary action.
The Bonds continue to influence the market. Watch for e reversal in them for stock market to have some leg. High interest rates and expectations of higher rates should keep a lid on rally hopes for time being.

ADST,Adstar Inc
CNX,Consol Energy Inc
EFG,iShares MSCI Growth Index Fund ETF
FXS,Rydex CurrencyShares Swedish Krona Trust ETF
IESC,Integrated Electrical Services Inc
KOG,Kodiak Oil & Gas Corp
MYY,ProShares Short MidCap400 ETF
PLM,PolyMet Mining Corp
PSQ,ProShares Short QQQ ETF
RBNC,Republic Bancorp Inc
TLG,Target Logistics Inc
TRB,Tribune Co
UVN,Univision Communications
VSTH,VitalStream Holdings Inc
XES,SPDRs Oil & Gas Equipment & Services ETF

Early Earnings Reports Are Extremely Positive

Posted on 6/27/2006
The Earning season will start soon and Zacks has a early lead on the earning season.

We are coming to the end of the second quarter and in just a few short weeks we will be in the heart of earnings season. We have been starting to get a few early reports in (we define the second quarter as the fiscal period ending in May June or July) and the results have been extremely positive so far. Granted these firms are not a representative sample, but so far so good. The most noteworthy of the early reporters are four big investment banks, which blew earnings expectations out of the water.

The market will set itself up for the Earning season snapback. If there are significant earnings surprises it would be interesting period with so many stocks down. Zacks is anticipating a good Earning season.

However, as we enter the quarter, analysts are a bit on the cautious side with the median year-over-year growth rate expected in the S&P 500 at only 8.3%. That is a sharp slowdown from the 13.2% growth posted in the first quarter. Yet shortly before the first quarter reporting season started the analysts were only expecting 8.9% growth for that quarter. Positive surprises then simply overwhelmed disappointments by better than 3:1 and the actual growth was much higher than expected. It would not shock me at all to see that happen again in the second quarter. The three sectors with the highest expected growth for the quarter are Energy (38.3%), Industrials (16.0%) and Materials (14.3%). All three sectors are also continuing to see strong upward estimate revisions for both this year and next.

For all of 2006, earnings growth is expected to be very solid. The median expected growth rate among S&P 500 firms is 11.4%, and the strength is expected to continue into next year with 12.9% growth expected.

Those of you who have asked me a lot of questions about my earnings based strategy, the coming earning season might be a good time to keep a good eye on how the market behaves during the earning season. It is also a good time to build your own earnings database. One good online source of earnings data is this Wall Street Journal section. The Investors Business Daily is another good source of daily earnings releases. But they do not cover lot of foreign stocks traded on US exchange.

Good traders trade. Good letter writers write letters.- Ed Seykota

Did you know that writing bullshit about market is a multi million dollar industry? There is an interesting piece on marketwatch about Investment Newsletters

"Are there some good newsletters?" said John Markese, president of the American Association of Individual Investors. "Yes, but you still have to find one."
Deciding which newsletter fits your investing needs isn't easy. Perhaps 1,000 publications in the U.S. cover a gamut of investment styles. Many are buy-and-hold stock portfolios culled from old-fashioned gumshoe analysis. Others are disciples of share-price momentum and relative strength, while some rely on elaborate market-timing formulas or sophisticated futures, options and similar leveraged products.
Newsletters typically are delivered to subscribers weekly or monthly, with interim updates via e-mail alerts, Web site access and "hotline" telephone numbers. Such an insider's pass to authoritative, expert opinion certainly sounds appealing, but sometimes a newsletter's claims and tactics are difficult to understand, let alone justify.
"We've seen just about everything," marquees said. "Newsletter writers writing something, then claiming it means something else, or writing things that could not be deciphered. Short of 'My dog ate the newsletter,' we've read it all."
The investment newsletter business is itself no dog. By some estimates the industry takes in several hundred million dollars a year in revenue, but it's essentially unregulated. A 1985 Supreme Court ruling determined that financial newsletter publishers are not investment advisers under Securities and Exchange Commission regulations; all anyone really needs to pontificate on stocks is a printer and a mailing list.

The economics of newsletter is such that it makes lot of business sense for the writers. If you are a mediocre trader it reduces your market risk by giving you steady income. There is also no dirth of gullible fools willing to pay for such garbage. The new trend I have noticed is people using the blog to build loyal readership and then convert it in to paid service.

There is a constitutional protection for newsletter writers. No wonder you find so much bullshit in them.

Newsletters are exempt from the Investment Advisers Act of 1940 (according to a 1985 US Supreme Court ruling) and are not required to
* Register with the Securities and Exchange Commission as investment advisers,
* Provide proof of the number of subscribers they claim to have, nor
* Publish complete records of their past recommendations.

Stock up 50% or more in a month

Posted on 6/26/2006
If you want to find and buy stocks like this before they make it to this list, just follow the earnings. Plot the earnings date and see what triggered some of these move. If there is instantaneous positive reaction to earnings you have a high probability trade. Look at the VOL and XING two recent earnings play which have rallies triggered by earnings. The other thing to look at is number of shares outstanding or the float.

VOL, Volt Info Sciences Inc

AXR,Amrep Corp
MIKR,Mikron Infrared Inc
OMNI,Omni Energy Services Cp
SIMC,Simclar Inc
VOL,Volt Info Sciences Inc
XING,Qiao Xing Univ Telephone

Stocks with all time high volume

Keep an eye on CTCI,Ct Communications Inc, after a runaway move a all time high volume portends trouble ahead.
Rest of the list is largely lead by merger related news. The PD,Phelps Dodge Corp acquisition/merger should be a cause for PD holders . Get ready for lower price as the merger curse strikes.

ANDS,Anadys Pharmaceuticals
AOG,Aurora Oil & Gas Corp
CTCI,Ct Communications Inc
KOG,Kodiak Oil & Gas Corp
PD,Phelps Dodge Corp
SEA,Star Maritime Acquisition Corp
SMRA,Somera Communications
TRB,Tribune Co
VE,Veolia Environment
VSGN,Vasogen Inc
ZMH,Zimmer Holdings

Compiling readers questions

There are lot of readers who have written to me , some have asked questions. I intent to write a series of posts to answer some of these. Here is a sampling of some of the questions:
  • Can you help me pick some winning stocks?
  • how to enter and exit trades ..
  • when and how to put stops
  • how long do you usually hold on to the stocks ...
  • do you mostly day trade, do short or long term trades?
  • how many stocks do you hold at a time?
  • what is the percentage that you accept as a loss for a trade before you get out?
  • what position sizes you use
  • I have a position in XYZ, what would you recommend for the stock..
  • How do u find high growth rate stocks?
  • What tools I can use to find stocks like those you mention on your site
  • How can I subscribe to your newsletter, web sites.
  • What are good web sites which provide stock screening at a reasonable rate
  • What books do you recommend
  • Please let me know your opinion on YHOO, EBAY, MSFT, CSCO
  • Why do you think XYZ is not a good investment? or going down.
  • Anything of interest on your radar?
  • Do you trade Indian stocks?
  • Should I become full time trader? How much can I make.
  • If you had to pick one stock for rapid growth today, what would it be.
  • Would you be willing to tell me how/what tools you use to build your list of stocks?
  • What software do you use?
  • Do you short stocks?
  • Which broker do you use?

So I thought about it and will be writing a series to deal with some of these questions. So stay tuned for the series.

Part1: The Venture Capitalist who kept staring at her monitor
Part2: Lost in technical analysis jungle
Part3: Serendipity

Ethanol rush is like dot com rush

Posted on 6/24/2006

This looks exactly like the mad scramble to put internet infrastructure in place some years ago. By the time enough fiber was put in place the boom was over. Another sign that the energy sector has topped.

Despite continuing doubts about whether ethanol provides a genuine energy saving, much of the nation's heartland is in the middle of an explosion of the modern-day alchemy of turning corn into fuel. At least 39 new ethanol plants are expected to be completed over the next 9 to 12 months, projects that will push the United States past Brazil as the world's largest ethanol producer.

"This is a bit like a gold rush," warned Warren R. Staley, the chief executive of Cargill, the multinational agricultural company based in Minnesota. "There are unintended consequences of this euphoria to expand ethanol production at this pace that people are not considering."

Ethanol Stocks

ADM,Archer Daniels Midland
ANDE,Andersons Inc (The)
GPRE,Green Plains Renewable Energy
MGPI,Mgp Ingredients Inc
MON,Monsanto Co
PEIX,Pacific Ethanol Inc
VSE,VeraSun Energy Corp

Weekly Sector Action

Transportation and internet are the new market theme on long side. The move in the transport sector might be interesting from the DOW Theory point of view. If you are a momentum investor you should look at these sectors for opportunities.

MG122,Independent Oil & Gas
MG717,General Entertainment
MG771,Major Airlines
MG772,Regional Airlines
MG774,Air Delivery & Freight Service
MG822,Application Software
MG851,Internet Service Providers
MG852,Internet Information Providers

On the downside the theme is mixed with technology dominating the action. There is a lot to be excited about in this sector action for the Buffet followers.

MG417,Regional-Pacific Banks
MG524,Long-Term Care Facilities
MG742,Toy & Hobby Stores
MG752,Building Materials Wholesale
MG813,Computer Based Systems
MG836,Printed Circuit Boards
MG842,Communication Equipment
MG844,Long Distance Carriers

Big acquisition in Energy sector is bearish

Posted on 6/23/2006

Two years of maneuvering to enhance shareholder value at Kerr-McGee (KMG:NYSE - news - research - Cramer's Take) found the bull's-eye Friday when the company agreed to be acquired by Anadarko (APC:NYSE - news - research - Cramer's Take) at a 40% premium to its market value.

Anadarko will pay $70.50 a share in cash for Kerr-McGee, or about $16 billion. Kerr-McGee's stock closed Thursday at $50.30 and surged $18.68, or 37%, to $68.98 in premarket trading Friday. As of Thursday's close, Kerr-McGee's market capitalization was about $11.4 billion, while Anadarko's was $22.2 billion.

Anadarko also announced an agreement Friday to acquire Western Gas Resources (WGR:NYSE - news - research - Cramer's Take) for $61 a share cash, or $4.7 billion. Western Gas closed at $40.91 Thursday and was up $18.09, or 44.2%, to $59 early Friday.

Why do big mergers and acquisitions are always done at the top? Most of these kinds of things are based on optimism and soon the sector starts its move down. The casino sector was on fire some time ago and then a big ticket merger was announced by MGM and since then the sector just stopped going up. So you can safely kiss your Anadarko Petroleum Corporation,(Public, NYSE:APC) stock a goodbye.

Top momentum stocks

Posted on 6/22/2006
These stocks have high momentum. Some are at top end of range and some are starting out after a protracted down move.

ACTG,Acacia Research Acacia Tech
AERTA,Advanced Environ Recycle
AETH,Aether Holdings Inc
AFFM,Affirmative Insurance Hldgs Inc
ATEA,Astea International Inc
AXR,Amrep Corp
BIOV,Bioveris Corp
BSML,Britesmile Inc
BVX,Bovie Medical Systems
CITP,Comsys It Partners Inc
CRAYD,Cray Incorporated
CSPLF,Canada Southern Petroleum Ltd
CTCI,Ct Communications Inc
CUP,Peru Copper Inc
DAKT,Daktronics Inc
ENS,Enersys Inc
FRO,Frontline Ltd Adr
FSII,Fsi International Inc
GEX,Globix Corp
GNLB,Genelabs Technologies
HGR,Hanger Orthopedic Group
HSR,Hi-Shear Technology Corp
IDCC,Interdigital Commun Cp
IHR,Interstate Hotels & Resorts
ILE,Isolagen Inc
IMCO,Impco Technologies Inc
ININ,Interactive Intelligence
JBLU,Jetblue Airways Corp
JCOM,J2 Global Communications
LBIX,Leading Brands Inc
MDTH,Medcath Corp
MIKR,Mikron Infrared Inc
MMSI,Merit Medical Systems
MOVI,Movie Gallery Inc
MRY,Memry Corporation
MVK,Maverick Tube Corp
MWRK,Mothers Work Inc
NAVR,Navarre Corp
NTG,Natco Group Incorporated
NYNY,Empire Resorts Inc
OMNI,Omni Energy Services Cp
OPNT,Opnet Technologies Inc
OPTV,Opentv Corporation Cl A
ORNG,Orange 21
PMTR,Pemstar Inc
PRXI,Premier Exhibitions Inc
PRZ,Paincare Holdings Inc
SEPR,Sepracor Inc
SIMC,Simclar Inc
SWB,Smith & Wesson Hldg Corp
TGIS,Thomas Group Inc
TWMC,Trans World Entertain Cp
TXUI,Texas United Bancshares Inc
UTK,Utek Corporation
VOL,Volt Info Sciences Inc
XING,Qiao Xing Univ Telephone
XNR,Xanser Corp
XPRSA,U.S. Xpress Ent Cl A

Stocks with all time high volume

MED,Medifast Inc was up over 500% this year. Today it had a all time high volume and tanked over $4.55. The reason was basically attributed to a negative report on short sellers favorite site stocklemon.

In the past few months, MedifastÂ’s CEO/Chairman and his wife, the MacDonalds, have sold a total of $3.7 million in stock, which represents close to 25% of their total holdings. While we do not fault a CEO for taking money off the table, we must note that his stock sales exceeded the entire growth in shareholders value over the course of the quarter.

CCDC,Concorde Career Colleges Inc
CLC,Clarcor Inc
HOLX,Hologic Inc
MED,Medifast Inc

Update The stocklemon report is so flimsy and thinly sourced, but the current market conditions have helped in magnifying the MED move.

What stocks are moving

There are number of stocks making good moves in recent days. As always market goes down and thickens at the lower level and stocks with exceptional earnings, sales or price growth continue there climb.
Here are a select few stocks with good momentum:

AEHR,Aehr Test Systems
AERTA,Advanced Environ Recycle
BIOV,Bioveris Corp
BSML,Britesmile Inc
BVX,Bovie Medical Systems
CPY,Cpi Corp
CSPLF,Canada Southern Petroleum Ltd
CUP,Peru Copper Inc
ENCY,Encysive Pharmaceuticals Inc
ENS,Enersys Inc
FSII,Fsi International Inc
GEX,Globix Corp
GNLB,Genelabs Technologies
GTCB,Genzyme Transgenics Corp
HSR,Hi-Shear Technology Corp
IDCC,Interdigital Commun Cp
ILE,Isolagen Inc
IMCO,Impco Technologies Inc
MED,Medifast Inc
MIKR,Mikron Infrared Inc
MOVI,Movie Gallery Inc
MRY,Memry Corporation
OMNI,Omni Energy Services Cp
SIMC,Simclar Inc
SNBI,State National Bancshares Inc
VOL,Volt Info Sciences Inc

Stocks with all time high volume
GPI,Group 1 Automotive Inc
MBRG,Middleburg Financial Corp
SWWC,Southwest Water Co

Stocks up 50% or more in a month
HSR,Hi-Shear Technology Corp
MIKR,Mikron Infrared Inc
VOL,Volt Info Sciences Inc

The market is offering mix bag of opportunities and again it has become stock pickers market.

Sector action

The Sector action during this market correction is interesting and shows some early trends of likely mover in next couple of months. The sector attracting buying at this stage are:

MG327,Cleaning Products
MG345,Dairy Products
MG348,Beverages-Wineries & Distill
MG416,Regional-Southwest Banks
MG717,General Entertainment
MG733,Drug Stores
MG771,Major Airlines
MG772,Regional Airlines
MG845,Telecom Services-Domestic

None of these sector have the potential to lead a sustained rise. The airline sector is highly leveraged sector and is benefiting from the years of cost cutting, consolidation and capacity reduction. Many of the stocks in this sectors(LCC, CAL, AMR, GOL) have already made 100% plus moves.

Sectors leading to the downside have all the former high flyers. The oil move has been done for long time to come and lot of the stocks in this sector are headed much lower.

MG124,Oil & Gas Drilling & Explorat
MG125,Oil & Gas Equip & Services
MG524,Long-Term Care Facilities
MG528,Medical Practitionersi
MG632,Manufactured Housing
MG636,Heavy Construction
MG752,Building Materials Wholesale
MG753,Industrial Equipment Wholesale

Stocks with all time high volume

ABY,Abitibi-Consolidated Inc
ASI,American Safety Insur Gp
GPI,Group 1 Automotive Inc

GPI,Group 1 Automotive Inc, has moved from 24to 63 in a year due to good earnings. Yesterday the stock had all time high volume after announcing a secondary issue. High prices are being used by management to issue more shares. This has resulted in lots of investors heading for exit.

Automotive retailer Group 1 Automotive Inc. (GPI.N: Quote, Profile, Research) said on Tuesday that it had priced $250 million of 2.25 percent convertible senior notes due 2036 in a private offering to institutional buyers.

The notes will be convertible into cash and, if applicable, shares of Group 1 common stock, based on an initial conversion price of approximately $59.43 per share. Group 1 has granted to the initial purchasers a 13-day over-allotment option to purchase an additional $37.5 million of the notes.
Posted on 6/19/2006
Stocks up 50% or more in a month

BIOV,Bioveris Corp
MIKR,Mikron Infrared Inc
OMNI,Omni Energy Services Cp

Stocks with all time high volume
AAWW,Atlas Air Worldwide Holdings Inc
ARE,Alexandria Real Est Eqts
ARGN,Amerigon Inc
CCBG,Capital City Bank Group
CHFC,Chemical Financial Corp
CHY,Calamos Conv And High Incm Fd
CIA,Citizens Inc
CMTY,Community Banks Mlrbg Pa
CVBF,Cvb Financial Corp
FCBC,Fst Community Bankshares
FCTR,First Charter Corp
IRETS,Investors Real Estate Tr
KBALB,Kimball Internat B
MDST,Mid-State Bancshares
OMEF,Omega Financial Corp
OYOG,Oyo Geospace Corp
QRCP,Quest Resource Corp

Market down 3% Niederhoffer down 30%

Posted on 6/17/2006
Just last month Victor Niederhoffer was boasting that he was the greatest speculator in the history of speculation. Hubris of that kind was swiftly punished by the market.

The May selloff in stocks couldn't have come at a worse time for hedge fund manager Victor Niederhoffer, who's been working hard to put his infamous 1990s boom-to-bust story behind him.

In May, Niederhoffer's four-year-old Matador Fund posted one of its worst months ever, industry sources say. The fund, which specializes in trading stock futures and stock index futures, lost nearly 29% as the U.S. markets began to unravel, reducing the value of Matador's holdings to about $247 million.

As of the end of May, the so-called commodity trading adviser fund, which was once up 31% for the year, was 6% in the red since the end of December. Results for June, which is shaping up as another harsh month for investors, could not be determined.

Tradeable rally is just a tradeable rally

Posted on 6/16/2006
I got an email asking whether this is the bottom. I do not know my reading based on my past database studies is that this is a tradeable bounce only. Such bounce require considerable skills to trade as you need a very short term time frame for the trade and need to chose your target equities well. The upcoming earning season will show whether this bounce has legs.

Oil has seen its high for the year

The energy sector has seen a multi year high. Expect many years of under performance from this sector. The bounce in last two days does not matter. Majority of these stocks are not going to see their high again. Alternative fuel, coal, oil, gas all these sectors will not regain the leadership for long time to come. Every rally in the energy sector is a shorting opportunity.
I am watching following stocks from this sector.
ACI,Arch Coal Inc
ADM,Archer Daniels Midland
ATW,Atwood Oceanics Inc
BHI,Baker Hughes Inc
CAM,Cameron International Corp
CLB,Core Laboratories N.V.
DO,Diamond Offshre Drilling
FCL,Foundation Coal Holdings
FTI,Fmc Technologies
FTO,Frontier Oil Corp
GRP,Grant Prideco Inc
HAL,Halliburton Co
HOC,Holly Corp
IEO, iShares Dow Jones US Oil & Gas Exploration & Production Index Fund ETF
IEZ,iShares Dow Jones US Oil Equipment & Services Index Fund ETF
IXC,iShares S&P Global Energy Sector Index Fund ETF
MDR,Mcdermott Internat Inc
OII,Oceaneering Internat
PBW,PowerShares Wilderhill Clean Energy Porfolio ETF
PEIX,Pacific Ethanol Inc
PXJ,PowerShares Dynamic Oil Services Portfolio ETF
RIG,Transocean Inc
SLB,Schlumberger Ltd
UCO,Universal Cmprssn Hldgs
UPL,Ultra Petroleum Corp
USO,United States Oil Fund ETF
VLO,Valero Energy Corp
VTS,Veritas Dgc
WFT,Weatherford International Ltd
WHQ,W-h Energy Services Inc

Those chasing this sector now are too late for the party. If you are holding on to these stocks, you should be worried.

Stocks showing momentum

Posted on 6/15/2006
Here are some of the stocks I own or looking at to enter. All of these stocks are showing good price momentum. Some of them have managed to rally during the correction.

AERTA,Advanced Environ Recycle
BIOV,Bioveris Corp
CTCI,Ct Communications Inc
ENS,Enersys Inc
GEX,Globix Corp
HSR,Hi-Shear Technology Corp
IHR,Interstate Hotels & Resorts
ILE,Isolagen Inc
MOVI,Movie Gallery Inc
OMNI,Omni Energy Services Cp
OPTV,Opentv Corporation Cl A
PMTR,Pemstar Inc
SGMO,Sangamo Biosciences Inc
SIMC,Simclar Inc
VOL,Volt Info Sciences Inc

Indian market record biggest ever gain

The Indian market had a big tumble in last one month. Yesterday it went up big way. Looks like a lot of bargain hunting by foreign investors.

The markets saw a big reversal and shot up on account of heavy buying in scrips across sectors. The Sensex closed with a gain of 616 points. The Nifty closed with hefty gains of 166 points. It was the biggest ever intra day gain for the Nifty and the Sensex.

Indian Stocks Trading in the US market

CPD,Caraco Pharm Labs
CTSH,Cognizant Tech Sol Cp A
HDB,HDFC Bank Limited
IBN,Icici Bank Ltd Ads
IFN,India Fund
IIF,Morgan Stan India Invsmt Fd
INFY,Infosys Technologies Ads
MTE,Mahanagar Telephone Nigam
RDY,Dr Reddys Labs
REDF,Rediff.Com India Ltd Ads
SAY,Satyam Computer Services
SIFY,Sify Ltd Adr
SYNT,Syntel Inc
TTM,Tata Motors Ltd Ads
VSL,Videsh Sanchar Nigam Ads
WIT,Wipro Ltd Ads

Some Interesting Business Articles

Stop celebrating. The markets are not rallying. This is a dead cat bounce

Anything is possible in financial markets, but the probability that the plunge in asset prices that began just a month ago could really be over after such a short time — and with so little damage being done to personal fortunes and financial institutions — must surely be very small. Much more likely is that any recovery that may or may not develop in the next day or two will turn out to be a “dead cat bounce” — in market parlance a brief and illusory rebound, whose main effect is to lure over-eager investors back into the market and then quickly deprive them of their wealth.

Earnings Still in Good Shape

With the recent drop in the equity markets, it is important to remember one extremely important thing: earnings are very robust, and there are no signs that they are going to soften up anytime soon. The median firm in the S&P 500 is expected to earn 11.9% more in 2006 than it did in 2005, and 2005 hardly qualified as depressed earnings. On a total earnings basis, the expected growth for the S&P 500 is even more robust at 13.5%.

Curbing microcap-stock touts without walloping free speech

Typically, the stocks involved are tiny issues traded on the OTC Bulletin Board or the Pink Sheets. The touts under current law are legal, so long as the sender discloses the "nature, source and amount" they were paid to pump the stock. The problem is that even that information is vague because it doesn't name any names or show specific dollar or share amounts behind the transaction.

"The ridiculous thing, in all candor, is that I think I've had the greatest run of success in the history of speculation," Niederhoffer said.

VeraSun IPO has blockbuster debut

VeraSun IPO was up 30% on debut. Given the prevailing market sentiment, that's an excellent start. Investors continue to have appetite for alternative energy. There are two more Ethanol companies waiting in the wings for IPO.

Over 250 companies have IPOed in last one and half years out of which around 75 IPOed this year. Some offered very good after market returns.

Symbol TotalRet Aftermarket Return
FMCN 222.10% 171.00%
BIDU 194.10% -35.20%
UARM 184.60% 46.20%
CMG 164.30% 32.20%
ARXT 146.10% 62.50%
VPRT 137.10% 86.60%
BKD 133.70% 74.60%
KNXA 124.20% 123.20%
ACLI 117.60% 61.50%
WBMD 111.80% 51.90%
MWIV 92.80% 54.30%
HITT 91.50% 67.40%
SWSI 91.20% 35.70%
BOT 82.90% 23.00%
ICE 80.80% 19.70%
ALJ 72.70% 60.20%
FNET 70.30% 69.40%
CBEY 67.70% 67.70%
IHS 61.30% 50.90%
VLCM 57.70% 12.00%
VOCS 56.80% 41.10%
CLMT 55.80% 54.00%
STP 55.30% 9.90%
ROLL 54.60% 46.80%
CMED 53.90% 42.50%

Some of the other hot IPO's creating buzz are fashion retailer J Crew Group and Synchronoss Technologies which provides online transaction management software for wireless/VoIP providers.

Stocks with all time high volume

AOG,Aurora Oil & Gas Corp
EZU,iShares MSCI EMU Index Fund ETF
GFN,General Finance Corp
OYOG,Oyo Geospace Corp
PARL,Parlux Fragrances Inc
TWW,Terremark Worldwide Inc

PARL,Parlux Fragrances Inc the maker of Paris Hilton perfume has been short sellers favorite stock for sometime. The CEO made an offer to take the company public at $29 a share but today the price hardly moved. The market is skeptical of this offer.

Parlux Fragrances, Inc. engages in the creation, design, manufacture, distribution, and sale of fragrances and beauty related products. The company holds licenses to manufacture, distribute, and sell fragrances and grooming items of PERRY ELLIS, PARIS HILTON, OCEAN PACIFIC, XOXO, FRED HAYMAN BEVERLY HILLS ‘273 Indigo’, and JOCKEY. It also has license agreements with Paris Hilton Entertainment, Inc. to develop, manufacture, and distribute cosmetics, watches and other time pieces, handbags, purses, wallets, and other small leather goods under the Paris Hilton name; and GUND, Inc. to develop, manufacture, and distribute children’s fragrances and related products on a worldwide basis under the babyGund trademark.

Stocks up 50% or more in a month

Posted on 6/14/2006

SIMC,Simclar Inc is up 222% for a year. Bulk of that move has happened in last 30 days or so. It has gone up from 3.09 to 9.97 in a year. As you can see here, the price rise was triggered by earnings announcement. It has only 6.5 million shares outstanding.

Simclar, Inc. is a contract manufacturer of electronic and electro-mechanical products. The company's products are manufactured to customer specifications and designed for original equipment manufacturers (OEMs) in the data processing, telecommunications, instrumentation and food preparation equipment industries. The company's principal custom-designed products include complex printed circuit boards (PCBs), conventional and molded cables, wire harnesses and electro-mechanical assemblies. In addition, Simclar provides OEMs with value-added, turnkey contract manufacturing services and total systems assembly and integration. The company also delivers manufacturing and test engineering services and materials management, with flexible and service-oriented manufacturing and assembly services. Simclar manufactures approximately 850 products for over 100 OEM customers.
Nouriel Roubin has an interesting take on why the world growth in dependent on USA and why the other economies are not going to 'De-Couple From the Coming U.S. Growth Slowdown'

If a U.S. slowdown is not the issue (but rather the extent of it), the next most crucial and important issue becomes whether the rest of the world will de-couple from the U.S. slowdown or not, i.e. whether Europe, China, Japan and other emerging market economies will be able to continue to grow at a sustained rate if the U.S. economy slows down or whether the U.S. slowdown will drag the rest of the world into a sharp global growth deceleration.

The current consensus in financial markets – as expressed in the analysis of many leading investment banks – is that the U.S. slowdown will lead to a de-coupling of the rest of the world from the U.S. slowdown, i.e. the rest of the world will maintain its high growth rate. The de-coupling view is based is based on the following arguments:

1. There is a very strong growth momentum in four major Asian economies – China, India, Japan and South Korea – and this momentum is supported by rapid and resilient growth of domestic demand. Thus, while a U.S slowdown would not be a positive, its impact on Asian growth will be very modest. And if these four major Asian economies keep on growing fast, the rest of Asia will also weather a US slowdown.
2. Many economic indicators from Europe – especially but not only Germany – suggest that economic growth in Europe and especially the Eurozone – is recovering; initially the recovery in confidence and activity was limited to the corporate sector but the recovery is now extending to the household sector. Also, since exports from Europe to the U.S. represent only 3% of European GDP, a US slowdown will have only a very limited effect on European aggregate demand via the trade channel.
3. Various private sector leading indicators measure of the global economy – such as the Goldman Sachs Global Leading Indicator index – suggest a clear leading slowdown in the U.S. but still a strong leading momentum in the rest of the world.

Do these de-coupling arguments make sense? Will thus de-coupling occur if the US slows down? My view is again very much out-of-consensus: I believe that the world will not decouple from a U.S. slowdown and that a sharp U.S. slowdown will lead and be associated with a global slowdown.

Who are the short sellers

Marketwatch has started running a series on short selling since yesterday. It has very good information about short sellers, the short strategies used by them and company responses to short selling. It is a good educational series.

Short sellers: The good, the bad and the ugly

Who are the short sellers?

'Naked' short selling is center of looming legal battle

Short sellers: A rarer breed of investing

Hot IPO- VeraSun Energy

The market weakness has not deterred VeraSun, the Ethanol producer from pricing above the top of its range. The other ethanol stocks have taken a beating in the market correction. PEIX is down 50, ANDE is down around 30% and ADM is barely holding on to its gain.
On Tuesday night, VeraSun Energy, the second largest ethanol producer in the US, priced its highly anticipated IPO of 18.25 million shares at $23, above the company's upwardly revised range of $21 to $22. The original deal structure was 17.25 million shares at $18 to $20 before the range was raised and insiders offered an additional 1 million shares (bringing the secondary share total to 7.25 million). VeraSun plans to use the proceeds to signficantly expand its production of ethanol, which is needed to meet federal mandates as a gasoline additive. Morgan Stanley and Lehman Brothers were the lead managers on the deal. The stock is expected to begin trading on the NYSE under the ticker VSE on Wednesday.

Another recent IPO to keep an eye on is THI, Tim Hortons Inc.

THI was a hot IPO some month ago and the sector is showing good resilience with SBUX at top of its range. So keep an eye on this one.

Stocks down 50% or more in a month

With the market in down trend, you would expect many stocks to be down significantly. However if you look at the list of stocks down 50% or more in a month it has only 9 stocks. Which is not surprising, as any one who test systems and understand markets knows that the profit potential of short side is significantly lower compared to long side.

Stocks down 50% or more in a month
DIL,Dyadic International Inc
DOVP,Dov Pharmaceutical Inc
ERS,Empire Resources
NBIX,Neurocrine Biosciences
PEIX,Pacific Ethanol Inc
POZN,Pozen Incorporated
REV,Revlon Inc
USEG,U.S. Energy Corp Wyo

Get ready for a tradeable rally

It looks like stocks will never rally again. However all bear markets are followed by bull markets. Offering some of the best opportunities to make money. So expect a bounce soon, possibly tomorrow (Wednesday). If tomorrow opens with significant gap down, it will be a good thing for the market.
What stocks have withstood the selling pressure and still are in an uptrend? This is the kind of list one should be ready with to anticipate such moves. The following stocks have the likely candidates for further move up when the market bounces.

Stocks showing resilience

ACR,American Retirement Corp
ACTG,Acacia Research Acacia Tech
ACTU,Actuate Corporation
ADLR,Adolor Corporation
AEHR,Aehr Test Systems
AERTA,Advanced Environ Recycle
AKAM,Akamai Technologies Inc
AMLN,Amylin Pharmaceuticals
AMR,Amr Corporation
ANGN,Angeion Corp
APN,Applica Inc
ARDI,@Road Inc
ARGN,Amerigon Inc
ARP,American Reprographics Comp
ASPV,Aspreva Pharmaceuticals
AUXL,Auxilium Pharmaceuticals Inc
AVGN,Avigen Inc
AVNC,Advancis Pharmaceutical
BFT,Bally Total Fit Hldg
BMRN,Biomarin Pharmaceuticals
BSML,Britesmile Inc
BUF,Minrad International Inc
BVX,Bovie Medical Systems
CAL,Continental Airlines B
CAMT,Camtek Ltd
CATG,Cambridge Antibody Tech Grp
CBAK,China Bak Battery Inc
CBEY,CBeyond Communications Inc
CBK,Christopher & Banks Corp
CBST,Cubist Pharmaceuticals
CELG,Celgene Corp
CGPI,Collagenex Pharmaceuticl
CHMP,Champion Industries Inc
CLDN,Celadon Group Inc
CLG,Cumberland Resources Ltd
CPTS,Conceptus Inc
CVO,Cenveo Inc
CYB,Cybex Internat
DAKT,Daktronics Inc
DBRN,Dress Barn Inc
DECK,Deckers Outdoor Corp
DMX,I-trax Inc
DRQ,Dril-Quip Inc
EAGL,Egl Incorporated
EDGR,Edgar Online Inc
EGY,Vaalco Energy Inc
ELN,Elan Corp Plc
EMIS,Emisphere Technologies
FAL,Falconbridge Ltd
FCFS,First Cash Financial Svc
FJC,Fedders Corp
FLOW,Flow International Corp
FMCN,Focus Media Holding Ltd ADR
FMD,First Marblehead Corp
FSTR,L.B. Foster Co Cl A
GAIA,Gaiam Incorporated Cl A
GES,Guess? Incorporated
GETI,Gentek Inc
GEX,Globix Corp
GFX,Media Sciences Intl Inc
GPI,Group 1 Automotive Inc
GRMN,Garmin Ltd
GYMB,Gymboree Corp
IBCA,Intervest Bncshs Cp Cl A
ICCA,Internet Commerce Cl A
ICON,Iconix Brand Group
ICTG,Ict Group Inc
IEDU,Investools Inc
IIG,Imergent Inc
IIP,Internap Network Svcs Cp
ILE,Isolagen Inc
ILMN,Illumina Inc
IMCO,Impco Technologies Inc
ININ,Interactive Intelligence
ISIG,Insignia Systems Inc
ISRG,Intuitive Surgical Inc
ISV,Insite Vision Inc
ITG,Investment Technology
KNDL,Kendle Internat Inc
KNOL,Knology Inc
KNOT,The Knot Inc
LCC,US Airways Group Inc
LDSH,Ladish Co Inc
LMS,Lamson & Sessions Co
LTBG,Lightbridge Inc
LVS,Las Vegas Sands
LYV,Live Nation Inc
MAIN,Main Street Restaurant Group Inc
MDR,Mcdermott Internat Inc
MED,Medifast Inc
MEND,Micrus Endovascular Corp
MICC,Millicom Intl Cellular Sa
MNG,Miramar Mining Corp
MOVI,Movie Gallery Inc
MTRX,Matrix Service Co
MVK,Maverick Tube Corp
MWRK,Mothers Work Inc
NAK,Northern Dynasty Minerals Ltd
NTG,Natco Group Incorporated
NTRI,NutriSystem Inc
NUE,Nucor Corp
NUVO,Nuvelo Inc
OMCL,Omnicell Inc
OMNI,Omni Energy Services Cp
OS,Oregon Steel Mills Inc
OYOG,Oyo Geospace Corp
PAE,Peace Arch Entmt Grp Inc
PLB,American Italian Pasta
PMTR,Pemstar Inc
PRCS,Praecis Pharmaceuticals
PRKR,Parkervision Inc
PRVT,Private Media Group Inc
PWEI,Pw Eagle Inc
Q,Qwest Cmmnctns Intl Inc
RBAK,Redback Networks Inc
REMX,Remedytemp Inc
RHAT,Red Hat Inc
RTK,Rentech Inc
SA,Seabridge Gold Inc
SCC,Security Capital Corp A
SGU,Star Gas Partners Lp Sbi
SIMC,Simclar Inc
SMDI,Sirenza Microdevices
SMSI,Smith Micro Software Inc
SOFO,Sonic Foundry Inc
STAA,Staar Surgical Co
SUPX,Supertex Inc
SVL,Silverleaf Resorts Inc
SWW,Sitel Corp
TEX,Terex Corp
TFR,Tefron Ltd
TMG,TransMontaigne Inc
TTI,Tetra Technologies Inc
TVIA,Tvia Inc
TWGP,Tower Grp Inc
TWTC,Time Warner Telecom Inc
TWTR,Tweeter Home Entertainmt
URGI,United Retail Group Inc
USEY,U.S. Energy Systems Inc
VOL,Volt Info Sciences Inc
WILC,G. Willi-Food International Ltd
WWWW,Web.Com Inc
XNR,Xanser Corp
XPO,Express-1 Expedited Solutions Inc
XPRSA,U.S. Xpress Ent Cl A
ZEUS,Olympic Steel Inc
ZUMZ,Zumiez Inc

These stocks have all doubled in a year and still within 25% of their recent high. Some of them have excellent earnings and sales. The initial bounce will be focused on oversold stocks, but once the market gets in to a tradeable rally this list candidates should offer good opportunities.

Gold loses its luster

Gold was on tear for many months. Inflation worries were driving this move. Today both the Gold ETF and Gold miner ETF were taken to the cleaners. The Gold bugs are a stubborn lot, for most of them it is a life long passion, so they will not be deterred by this high volume move.
The market continues to cascade down. At this stage the selling is driven by fear and forced liquidation. The effort at end of day bounce was snuffed out with heavy selling.

Stocks with all time high volume

AOG,Aurora Oil & Gas Corp
CIB,Bancolombia Sa
CII,Capital & Income Strategies Fd
GDX,Market Vectors Gold Miners ETF
GLD,streetTRACKS Gold Shares ETF
GMXR,Gmx Resources Inc
MVK,Maverick Tube Corp
QRCP,Quest Resource Corp
TUES,Tuesday Morning Corp

Globalization of bear market

Today's headlines tells the story:
Global equity sell-off accelerates across Europe

It will be interesting to see what happens in USA market by the end of day. Going by past trend it might be up day! What happens next? A rapid decline like this with no hint of stabilization should set us up nicely for the next earning season. The next quarter may not offer many opportunities but if the correction extends to September, we will have good set up for October reversal.

Stocks with all time high volume
CBAK,China Bak Battery Inc
GRZ,Gold Reserve Inc
PETS,PetMed Express Inc
THX,Houston Exploration Co
TRBS,Texas Regional Bancshrs

Stocks with all time high volume

Posted on 6/12/2006
Looks like HSR,Hi-Shear Technology Corp has hit an airpocket. I got couple of emails from readers about how the HSR market maker manipulated the whole thing , dumping large volume in last few minutes. The trouble with trading Amex stocks is dealing with low float and market manipulation by market makers. I take a more seasoned approach to it, this is all part of the game. Amex has been the best performer in this multi year bull phase.

ACOR,Acorda Therapeutics Inc
GGC,Georgia Gulf Corp
HSR,Hi-Shear Technology Corp
NXTM,NxStage Medical Inc
POZN,Pozen Incorporated
XLI,SPDRs Select Sector Industrial ETF

No stock picks at Buffet lunch

Posted on 6/10/2006
You're the world's most famous investor -- do some of them want stock tips?
Interestingly enough, nobody has asked for stock tips. We've always talked about varied things. Most talk about their personal lives. The younger people like David Einhorn (who is 37) talk about raising kids and other such worldly things. They think because I'm 75 I know something -- which is not necessarily the truth.

Not running with the bulls

I see lots of green and gap ups. Lot of the gap up like the one in HANS, Hansen Natural Corp are in heavily shorted stocks. The market will stabilize here first, then one by one sectors, stock themes will start emerging. I have around 200 stocks on my list. These have withstood the selling and I am focusing on them. There will be lots of opportunities in coming weeks.

Meanwhile you can run with these bulls.

QQQQ, SPY, DIA, OIH Volume tells the story

Stocks with all time high volume

AAWW,Atlas Air Worldwide Holdings Inc
ATI,Allegheny Technologies
BHP,BHP Billiton Ltd
CUP,Peru Copper Inc
DSG,streetTRACKS DJ Wilshire Small Cap Growth ETF
EEM,iShares MSCI Emerging Markets Index Fund ETF
FBN,Furniture Brands Intl
GDX,Market Vectors Gold Miners ETF
IEZ,iShares Dow Jones US Oil Equipment & Services Index Fund ETF
IHG,Intercontinental Hotels Grp Ad
IIF,Morgan Stan India Invsmt Fd
IWC,iShares Russell Microcap Index Fund ETF
IWM,iShares Russell 2000 Index Fund ETF
IYT,iShares Dow Jones Transportation Average Index Fund ETF
JOSB,Jos A Bank Clothiers
KUB,Kubota Ltd
LVLT,Level 3 Communications
MTU,Mitsubishi UFJ Financial Group Inc
NSC,Norfolk Southern Corp
PIV,PowerShares Value Line Timelines Select Portfolio ETF
PWC,PowerShares Dynamic Market Portfolio ETF
QQQQ,Nasdaq 100 Index Tracking Stock ETF
SPY,SPDRs S&P 500 Trust Series ETF
SSL,Sasol Ltd Adr
VBR,VIPERs Small Cap Value ETF
VIG,VIPERs Vanguard Dividend Appreciation ETF
XLB,SPDRs Select Sector Materials ETF
XLE,SPDRs Select Sector Energy ETF
XLF,SPDRs Select Sector Financial ETF
XLU,SPDRs Select Sector Utilities ETF

Yesterday was record volume day for number of ETFs and holders. Ten session ago some of these same ETFs had record volume. Even if you take in to account the volume effect of option expiration, this volume is significantly higher. In case of QQQQ, SPY and OIH between the last all time high and yesterday, have not had significant price drop.

How I Became Such a Great Trader ;-)

Tradermike has a nice post on how he trades and what has contributed to his success.
He summarizes his approach to finding 1:3 risk trades.
I hope its clear to everybody that my goal is to find as many low risk, high reward trades as possible. I generally won't enter a trade if I don't think it has the potential to return 3 times my risk. So in R-multiple terms, I'm looking for trades that I think will be at least 3R.

He offers extensive details about his methodologies, hardware, software, trading psychology etc. His method is geared to high frequency day trading. But the basic principals of trading remain same. Find a methodology you are comfortable with and fine tune it.

In my experience many traders are not successful and give up because they flirt from one methodology to another rather than focusing on a simple idea and fleshing it out completely.

Why this stock is up 144% in 42 days

HSR, Hi-Shear technology Corp., is a stock which I have talked about a lot here. This is a stock which I own and bought it 42 days ago. It is up 144% since then.

This came on my high earning growth and price growth screen 42 days ago. The stock has a low float with just 6.7 million shares outstanding. It had a good quarter and reacted positively to earning acceleration.

This stock has been around since 1994 and has not attracted much attention till date. Such unknown companies are not on the radar of any analyst and when they are discovered by market they have a nice quick run. If this continues its run and goes to 15, the Investor Business Daily crowd will pile on as it might make the IBD top list.

Fear is in the air

The Fed with its loud message in inflation is intervening in market. This looks like planned jawboning of inflation expectations and signal to inflation based speculators. Clear proof of this is in the Novak Column. This guy is old hand and is being used to signal Fed intent to markets.

Robert Navak sums up the Fed game very well.

When the newly installed Federal Reserve Chairman Ben S. Bernanke sent stocks plunging 200 points Monday with his latest inflationary warning, this was not another case of the rookie central banker shooting off his mouth. Rather, this was a carefully calculated message to lessen inflationary expectations in markets and the real economy.

''This is theater,'' said one longtime Fed-watcher, meaning that Bernanke is playing a role in hopes that words will make action unnecessary. A more apt metaphor might be that Bernanke is the aviator flying the Federal Reserve monetary airplane, seeking a soft landing from the growth economy without crashing into a recession.

This is the test for America's central banker, at the controls of the global as well as the U.S. economy. Monetary aviation is difficult and risky. Alan Greenspan, Bernanke's predecessor at the Fed for more than 18 years, was renowned for his mastery there. In fact, the man now referred to on Wall Street as ''The Legend,'' out of three attempted soft landings, crashed and burned two times -- a poor average for central bankers. One such crash in 1992 contributed to the defeat for re-election of President George H.W. Bush.

Stocks with all time high volume

ALOG,Analogic Corp
AMWD,American Woodmark Corp
AUY,Yamana Gold Inc
CBD,Companhia Brasiliera De
CRB,Courtside Acquisition Corp
CRL,Charles River Labs Intl
LINTA,Liberty Media Interactive Class A
SPSX,Superior Essex Inc
TRY.B,Triarc Co Cl B
VIA.B,Viacom Inc Class B

There is clear hint of panic now. The Asian and Europe markets are in free fall. This kind of action is always in the later stage of correction. Today is also triple witching, so volatility will be high.

So time to watch the panic at open.

Get ready for avalanche of private equity deals

With current market weakness, many companies are priced for picking and the money waiting on sideline for private equity deals will get good bargains.

GOLDMAN SACHS, the Wall Street investment bank, is to start raising billions of dollars for a new private equity fund within weeks, despite the recent furore over conflicts of interest between the bankÂ’s private equity division and its corporate clients, The Times has learnt.
It is expected that Goldman is seeking to raise at least $10 billion.

Market commentators expect 2006 to be another record year for fundraising. The biggest firms — including Texas Pacific, KKR, Blackstone, Permira and Apollo — are are on target to raise more than $50 billion.

Who is buying the gold

I am sure the Gold bugs will be very happy with this.

Oil states armed with an estimated current account surplus of $480bn in 2006 are thought to be feeding the "stealth demand" for bullion, led by Russia.

President Vladimir Putin
, a frequent critic of dollar hegemony, has ordered the Russian central bank to raise the gold share of foreign reserves from 5pc to 10pc.

Russia's reserves have surged to $237bn - the world's fourth biggest - after rising 61pc in 2004 and 40pc in 2005. With a current account surplus of 10pc of GDP, it must sweep up a big chunk of global gold output just to stop its bullion share of reserves from falling.

In China, monetary committee member Yu Yongding last week issued the most explicit call to date for Beijing to diversify its $875bn reserves into gold to protect against a tumbling dollar. "We need to use some of the reserves to buy other assets such as gold and strategic resources such as oil," he said.

How many engineers did it take to produce Google spreadsheet?

Of all the opinions on launch of Google spreadsheet, I like this one the best.

How many engineers did it take to produce Google spreadsheet? Two? Three? And how many other people did it take to launch? 3 more? What'’s the result of 6 peoples efforts for 6 months?

The press is falling over themselves trying to figure out “"the implications of this announcement". Microsoft has to spend marketing and PR cycles trying to explain to everyone why “"this isn'’t as powerful as Excel"” in the same article which offers a “"balance opinion" from analysts say that it is.

So, for 3 staff-years, Eric Schmidt gets to make Microsoft look like its standing still again and wastes more of their C-Level execs time reacting instead of acting. Pay back is a bitch.

Inflation, stagflation, recession, deflation.........

The arguments in market can be summarized on a spectrum from inflation to deflation. So here is your handy summary of each scenario and who is championing what.

Inflation: A rising price expectation is being built in. The factors driving this are high oil prices, tight labor markets and the falling dollar. So inflation will rise above the current levels and feed on itself.

Stagflation There will be some inflationary pressure, growth slows down but nothing major happens. We muddle through for many years.

Recession The combination of rising interest rates, rising oil prices, a fading housing market is going to produce a slump. The GDP growth will drop precipitously from the 5 per cent-plus pace of the first quarter to near-recession levels by the end of the year and the beginning of next year.

Deflation Don't forget China, India, Vietnam, Bangladesh, Africa, and the Middle East. All these countries have one simple idea- export. So this should drive down cost.
We remain of the view that the primary threat to the global economy comes from deflation, not inflation.
The combination of freer trade, tech-driven productivity gains and deteriorating demography across the industrial world argues for sustained deflationary risks on a scale not seen in a century. The next recession, —whenever it comes, —will drive long-term interest rates to levels not seen since the Depression.

The question is how do you profit from the four likely scenario. As a trader all that I am interested in is, how to be consistently profitable. None of these scenario affect my core trading philosophy. I look for 25 good trades in a year. At some stage the market will have multi week rally and that is sufficient for me to make enough money. I am up about 35% for the year so far and do not have the pressure of trying to achieve some monthly target.

Stocks with all time high volume
BOBE,Bob Evans Farms Inc
COGO,Comtech Group Inc
DLIA,dELiA*s Inc
ELGX,Endologix Inc
EN,Enel Spa Ads
GDX,Market Vectors Gold Miners ETF
HOM,Home Solutions Of America
IHG,Intercontinental Hotels Grp Ad
QTEC,First Trust Nasdaq 100 Technology Sector Index Fund ETF
SCC,Security Capital Corp A
VIG,VIPERs Vanguard Dividend Appreciation ETF
XHB,SPDRs Homebuilders ETF

Expert do not agree on market direction
One mans bull market is another mans bear market. There is an interesting debate about both side of the case. As the mass media starts noticing bear market, it might be time to dip toe on the long side.

Interviews with nearly a dozen economists and market analysts turned up widely varying views on whether this particular market correction will develop fur and claws. That's partly because each one looks at different signals to determine where the equity markets are going.

Wimps and testosterone

Bernanke tough stance on inflation is getting noticed. It is coordinated campaign to talk down the inflation. Currently it is verbal intervention. The market will soon test the Fed manliness talk.

Ben S. Bernanke rattled world financial markets Monday with his tough talk about combating inflation, but he also buffed up his image as a strong Federal Reserve chairman committed to the fight, analysts said yesterday.

"He reintroduced testosterone to the inflation-fighting resolve of the Fed," said Diane Swonk, chief economist of Mesirow Financial Inc., an investment management firm. "This is a pure male thing. He said to the markets, 'You think I'm a wimp? Take me on.' "

This trend has legs

If I have to bet on one long term trend, the trend of mass migration of advertisers to online media is what I would bet on. I have done lot of work on media adoption and media buying behavior in my earlier career and based on that I am a bull on online advertising. Do not worry about click fraud, the marketers at the end of day look at total return on advertising spend.

IN the matchup between the print and online versions of newspapers, signs of the Internet's ascendancy are growing stronger. As Colby Atwood, a newspaper analyst and a vice president at Borrell Associates, put it, "The tail is beginning to wag the dog."

According to estimates released on Friday by the Newspaper Association of America, newspaper print ad spending in the first three months of 2006 increased only 0.3 percent, to $10.5 billion, over the corresponding period last year. At the same time, spending for online advertising surged 35 percent.

"I think the handwriting is kind of on the wall that there is a large migration to the Web," Mr. Atwood said. "Increasing amounts of revenue and focus should be on the online properties. This is a transition that's taking place over several years here. It's not happening overnight, but it's definitely happening."