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Caution time

Posted on 11/30/2006
The market continues to churn at these levels. A slow distribution is visible in many stocks which rallied for long time. For some it might be end of their run, for some it might be a pause before they breakout again. It is not a time to be overly aggressive. The easy money period was couple of weeks ago.

I am mostly in cash and selectively nibbling at things which have recent catalyst. Today I picked up few shares of CBOU, Caribou Coffee Company Inc, DRRX, Durect Corporation, F, Ford Motor Company and ZIOP,Ziopharm Oncology Inc. Nothing major just playing with play money currently.

Here is what I have positions in or watching:

ABBC,Abington Community Bancorp Inc
ALY,Allis-Chalmers Energy Inc
AOB,American Oriental Bioengineering Inc
CBOU,Caribou Coffee Company Inc
CMT,Core Molding Tech Inc
CVU,Cpi Aerostructures Inc
DLLR,Dollar Financial
DSTI,Daystar Technologies Inc
DSW,DSW Inc
EMKR,Emcore Corporation
ERS,Empire Resources
GRA,W.R. Grace & Co
HRT,Arrhythmia Research Tech
MED,Medifast Inc
NCOC,National Coal Corp
ORCT,Orckit Communication Ltd
RVI,Retail Ventures Inc
SPF,Standard Pacific Corp
TSCM,Thestreet.Com
TTG,Tutogen Medical Inc
ZIOP,Ziopharm Oncology Inc
ZUMZ,Zumiez Inc

Housing and American Recessions

Excellent analysis of the housing slowdown and its impact on US economy.

A weak housing sector has accompanied every American recession since 1965, but not every episode of housing weakness has accompanied a recession. An annual drop in the growth rate of residential investment (a good measure of homebuilding activity) of more than 10 percent has coincided with a recession five of the seven times it has occurred since 1965. (In 1967 and in 1995, declines in residential investment occurred without a recession.) A significant drop in residential investment therefore appears to be a necessary condition, but not a sufficient condition, for a U.S. recession.

Housing slowdowns tend to lead recessions rather than result from them. During the second quarter of 2006, fixed residential investment fell at an 11.1 percent annual rate, followed by a 17.4 percent rate of decline in the third quarter. The intensity of the fall in U.S. residential investment during the middle two quarters of 2006 is approaching potential recession territory. The year-over-year drop reached nearly 8 percent during the third quarter. Moreover, moving into the fourth quarter, the housing slowdown is intensifying. Housing starts, another important measure, fell by nearly 15 percent during October, bringing the three-month (August through October) annualized rate of decline to nearly 50 percent.

Still, the chances of a recession in 2007 caused by housing weakness are probably only about one in two. Understanding how recessions result from a weaker housing sector helps to determine the odds of an upcoming recession.

Dollar Bounce



The Economist has an uncanny ability to time its covers. Last time it put disappearing dollar on cover the dollar rallied.

This was the cover in December 2004. Just look at the Dollar after that.


Immediately it stopped going down.

How about this in first week of June 2006.


The S&P and Dow stopped going down and rallied within few days of the cover hitting stand. This British rag has amazing timing sense.

Data Impact

Looking for explanation of market sell offs or rallies in macro data can be an interesting exercise and can keep you busy for a lifetime. Stocks down because of factory data is a very simplistic interpretation. Same data at different market phase will have no impact.

There are lot of speculators who track several macro data points like employment, factory orders, transport tonnage, housing permits, retail sales and so on to make sense of markets. Often it is tempting to dive in to the macro economics world and start tracking and talking like several TV commentators and pundits who write about such macro stuff. Reading lot of that kind of macro stuff can give you a sense of inadequacy that you are the only fool who does not understand or track it.

There are two critical things one must consider or at least I considered before abandoning the quest for holy grail in macro indicators and data. The first is data is a big speculators edge. No matter what you do, you will never get access to some of the best and timely and accurate databases as a small speculator. The investment banks, mutual funds, pension funds and large hedge funds have the resources and infrastructure to collect and manage such databases. Because the business is oligopilistic , each one keeps its data proprietary and jealously guards it. So some of the best data is not publicly disseminated. Plus there is a time lag between what you get and what big speculator get.

Second important thing to consider with data is even if you have an access to best databases, the data is only useful if it is a leading indicator. A data or indicator should be able to tell you the future direction of the market, then only it is worth it. Then you can use the data to forecast market. Very few things in macro economic data are leading indicator for market direction. All the talk about macro stuff might impress the cocktail crowd and might fool few clueless girls at bar, but if it was that easy, why would macro economic and big picture speculators be making their living selling newsletters and data services.

In fact macro data and too much analysis of them and beliefs in them can lead most analyst to be persistently wrong for extended period of time.Those who got stuck on housing lead slowdown had hypothesised that housing is a leading indicator for stock market. What they consider as leading indicator just does not act as leading indicator for market direction or the correlation changes. By the time they realise it the rally is over. The best leading indicator for economic growth is probably market direction itself.

I have looked at several macro economic variables and tried to model them before abandoning that approach. That is one way to trade. The other way is what I follow where I am focused on equity selection and more immediate to vehicle kind of data like earning, sales, price momentum, new product or management change as catalyst. Much of such data is actionable and comparatively easily available at low cost. Plus there are many ways to develop edge using it.

When I have billions to trade I will also look at macro things. For now researching and perfecting vehicle level edges is the best choice. You must only fight the battles where you have an edge.

Transition time

It is transition time in markets. The Monday sell off was indicator of distribution in some sectors and stocks running on adrenalin. The distribution in those names will continue. In fact more high flying groups would join in the slow distribution phase. New sectors are now breaking out. The money is moving in to sectors which were not part of the original up move. This can be a good dynamics as the rally becomes more broad based. But sometimes when laggards start moving up it can also be indicating that the rally is over and under the guise of action in the new sectors a serious and slow distribution is happening.

The brokerage sector is showing up on my short scans, the torrid rallies in GS, BSC, OXPS, LEH, AMTD, ET, etc. seem to be reverting or pausing. Similarly the exchanges like NYX and NMX are clearly showing the hype on exchanges was a good ruse to palm of shares to some unsuspecting fools. Most of the times when everyone gets it the party is almost over.

Last few weeks saw flurry of activities in exchanges with everyone saying , you can never go wrong buying exchanges. Mom and POP guru Crammer was hyping NMX pre IPO. James Crammer in his own book talks about how he told everyone to sell Thestreet.com shares when they popped up on first day of IPO. But here he was pumping everyone to buy NMX before the IPO. Good entertainment may not be the best investment advise. As a rule following advise of anyone on CNBC is a road to disaster.

The oil and metal sector is making a move. So bonds should also make a move. The inflation theme might be back soon. Market will continue to consolidate or move sideways for few weeks and then make a move either way. By that time we will be in the earning expectation for next quarter cycle. If you keep a tab on earning trends, you will get a good idea on what is likely to happen.

During the transition phase many times buying the high relative strength names or stocks at top of range after extended move up may not be the best strategy. Those stocks are most vulnerable to sell off especially if the sector has been hot for sometime. You have to find new stocks breaking out with lower relative strength and having new earning power. The relative strength strategy needs adjustment in such times.

I am keeping an eye on DSW, DSW INC and ICE, Intercontinental exchange based on earnings. There are some interesting candidates with potential showing up on my scans :

ALY,Allis-Chalmers Energy Inc
ATI,Allegheny Technologies
BONT,Bon-Ton Stores Inc
BTJ,Bolt Technology Corp
DBRN,Dress Barn Inc
DIL,Dyadic International Inc
DVAX,Dynavax Tech
EPG,Environmental Power Corp
GEOI,Georesources Inc
GHDX,Genomic Health Inc
GLDN,Golden Telecom Inc
IGLD,Internet Gold-Golden
IPS,Ipsco Inc
KEQU,Kewaunee Scientific Corp
OIH,HOLDRS Oil Service ETF
RNIN,Wireless Ronin Technologies Inc
SIGM,Sigma Designs Inc
TGEN,Targeted Genetics Cp
USEG,U.S. Energy Corp Wyo
VIP,Vimpel Communication Ads

Buying and selling

Posted on 11/29/2006
While the high fliers till last week are being sold , there is money flowing in several stocks which were not participating actively in the rally. Sector rotation is clearly visible everywhere. There are lots of opportunities and probably playing the game stock by stock and sector by sector is the best course of action. While I am bearish on some sectors and stocks, I am finding lots to buy in other sectors. Besides some of the stocks I mentioned in my earlier post today, I have opened fresh positions today in ATI, TIE, and CHIC. There are many more opportunities on long side currently. The trend is your friend till it bends.

Some of the other stocks on my watch or in my portfolio are:

ARO,Aeropostale Inc
ATI,Allegheny Technologies
AVR,Aventine Renewable Energy Holdings Inc
BONT,Bon-Ton Stores Inc
BTJ,Bolt Technology Corp
CHIC,Charlotte Russe Hldg Inc
DBRN,Dress Barn Inc
DIL,Dyadic International Inc
DVAX,Dynavax Tech
EDU,New Oriental Edu And Tech Corp
ENER,Energy Conversn Devices
EPG,Environmental Power Corp
GEOI,Georesources Inc
GHDX,Genomic Health Inc
GLDN,Golden Telecom Inc
GRA,W.R. Grace & Co
IPS,Ipsco Inc
KEQU,Kewaunee Scientific Corp
MBT,Mobile Telesys Ojsc Ads
MTCT,Mtc Technologies Inc
NYT,New York Times Co The
OIS,Oil States Intl
PFB,Pff Bancorp Inc
POSS,Possis Medical Inc
PPP,Pogo Producing Co
PTEN,Patterson-Uti Energy Inc
RBC,Regal-Beloit Corp
RNIN,Wireless Ronin Technologies Inc
RNOW,Rightnow Technologies Inc
RTI,Rti Internat Metal Inc
SIGM,Sigma Designs Inc
SNDA,Shanda Interactive Ent Ltd
STO,Statoil Asa
TATTF,Tat Technol Ltd
TEO,Telecom Argentina Sa
TGEN,Targeted Genetics Cp
TIE,Titanium Metals Corp New
TIF,Tiffany & Co
TRGL,Toreador Resources Corp
VIP,Vimpel Communication Ads
VSE,VeraSun Energy Corp
WNR,Western Refining Inc
ZVUE,Handheld Entertainment Inc

Breakouts to watch

The market is doing good job of frustrating the top callers. Early bears are getting whacked in some stocks. New sectors like China, Metals, Drugs and biotechs, and retail continue to see new breakouts.

As usual earnings is driving the action in some stocks like TATTF, MBT, BONT, DBRN, TIF etc. Keeping an eye on other stocks in the same sector can get you in to some good point moves. MBT earnings announcement is resulting in the Russian mobile sector stocks rallying. The FDA clearance news continues to provide good bid and decent pops for the biotechnology stocks.

Here is what I have positions in or looking at based on today's action:

BONT,Bon-Ton Stores Inc
BTJ,Bolt Technology Corp
DBRN,Dress Barn Inc
DVAX,Dynavax Tech
MBT,Mobile Telesys Ojsc Ads
POSS,Possis Medical Inc
QI,Qimonda AG
RNIN,Wireless Ronin Technologies Inc
RNOW,Rightnow Technologies Inc
TATTF,Tat Technol Ltd
TGEN,Targeted Genetics Cp
TIF,Tiffany & Co
VIP,Vimpel Communication Ads

New sectors and new themes

New sector and new theme stocks often attract buy interest when the already established leaders start breaking down or consolidating. Most of the times the markets attention is still focused on the earlier leaders, in the process you can miss out on good new opportunities.

Last night I was looking at some new leadership kind of stocks and here is what I found :

BCP,Balchem Corp
CDZI,Cadiz Inc
DG,Dollar General Corp
DWSN,Dawson Geophysical Co
ECMV,E Com Ventures Inc
FMCN,Focus Media Holding Ltd ADR
IOC,Interoil Corporation
KWK,Quicksilver Resources
LPX,Louisiana-Pacific Corp
MTL,Mechel Steel Group OAO ADS
OIS,Oil States Intl
OMRI,Omrix Biopharmaceuticals Inc
SNDA,Shanda Interactive Ent Ltd
SPN,Superior Energy Svcs Inc
SWM,Schweitzer Mauduit International Inc
TRBN,Trubion Pharmaceuticals
VSE,VeraSun Energy Corp
VTAL,Vital Images Inc

Many of these stocks are being quitely accumulated by those in the know. Some of them offer good entries at current levels.

Small caps in focus

The mid July to November rally was lead by large cap stocks. The Dow and S&P were the focus. Some of the selling on Monday was concentrated in those stocks. The small caps were not so much in focus. Now small caps seems to be finding some bids.

Here is what I have positions in or watching based on yesterday's action:

AEZ,American Oil & Gas Inc
AMAG,Advanced Magnetics Inc
ANIK,Anika Therapeutics Inc
ANTP,Phazar Corp
AXR,Amrep Corp
BITI,Bio-imaging Technologies
CSLR,Consulier Engineering
DIVX,Divx Inc
GGR,Geoglobal Resources Inc
GOAM,Goamerica Inc
ICOP,ICOP Digital Inc
NRMX,Neurochem
NTY,Nbty Inc
OMNI,Omni Energy Services Cp
PCCC,Pc Connection Inc
SVM,Servicemaster Co The
SVNT,Savient Pharmaceuticals Inc
SWAT,Security With Advanced Tech
TRT,Trio-Tech Internat
UAHC,United American Healthcare Cor

Resilient Stocks

Posted on 11/28/2006
Market corrections separate the boys from men. Stocks which are resilient during market downtrends are the one to focus on during such correction phases. Many of these stocks jump out and restart their rallies the moment the weight of market direction gets lifted. Many of the resilient stocks continue to crawl up during corrections.

Also some stocks which have specific catalyst or outstanding earning defy the market direction and breakout during overall downtrend in market. Keeping a close tab on them can offer good low risk entries. Some of the stocks breaking out today have such catalyst. I have a small position in one such play- ANIK, which I got in to on the FDA approval news.

Here is some of the resilient stocks I am monitoring and looking to get in to soon.

ACLI,American Commercial Lines Inc
ACP,American Real Estate Prt
ADL,Amdl Inc
AEM,Agnico-Eagle Mines Ltd
AEOS,American Eagle Outfitter
AEPI,Aep Industries Inc
AEZ,American Oil & Gas Inc
AFAM,Almost Family Inc
AKAM,Akamai Technologies Inc
AKH,Air France KLM
ALB,Albemarle Corp
ALGN,Align Tech Inc
ALTH,Allos Therapeutics Inc.
ALX,Alexander's Inc
AMAG,Advanced Magnetics Inc
AMIE,Ambassadors Internat Inc
ANGN,Angeion Corp
AOB,American Oriental Bioengineering Inc
AOI,Alliance One International Inc
APN,Applica Inc
ARRY,Array Biopharma Inc
ATI,Allegheny Technologies
ATNI,Atlantic Tele-Network
AUXL,Auxilium Pharmaceuticals Inc
AXR,Amrep Corp
AXTI,Axt Inc
AZK,Aurizon Mines Ltd
AZZ,Azz Inc
BAB,British Airways Plc Adr
BAMM,Books-A-Million Inc
BDY,Bradley Pharmaceuticals
BIDU,Baidu.com Inc
BIOV,Bioveris Corp
BITI,Bio-imaging Technologies
BRCD,Brocade Communications
BRLC,Syntax-Brillian Corp
BW,Brush Engineered
CAL,Continental Airlines B
CAPA,Captaris Inc
CCOI,Cogent Communications Group Inc
CHAP,Chaparral Steel Company
CHDX,Chindex International Inc
CHINA,CDC Corp Class A
CHTR,Charter Communications Inc
CKSW,Clicksoftware Technlgies
CLB,Core Laboratories N.V.
CLEC,Us Lec Corp Cl A
CNS,Cohen & Steers Inc
CNXS,CNS Inc
COGO,Comtech Group Inc
CPTS,Conceptus Inc
CPY,Cpi Corp
CRVL,Corvel Corp
CTDC,China Technology Development Group Corp
CTEC,Cholestech Corporation
CTRX,Cotherix Inc
CUBA,Herzfeld Caribbean Basin
DAKT,Daktronics Inc
DECK,Deckers Outdoor Corp
DGIT,Dg Fastchannel Inc
DHIL,Diamond Hill Investment Group Inc
DLLR,Dollar Financial
DPTR,Delta Petroleum Corp
DVAX,Dynavax Tech
EBIX,Ebix Inc
ELE,Endesa Sa
EZPW,Ezcorp Inc Cl A
FCGI,First Consulting Grp Inc
FIA,Fiat S.P.A. Adr
FMD,First Marblehead Corp
FRG,Fronteer Development Group Inc
FTEK,Fuel Tech Inc
FTGX,FiberNet Telecom Group Inc
GDP,Goodrich Petrol Corp
GEL,Genesis Energy (L.P.)
GEO,Geo Group (The)
GIII,G-III Apparel Group Ltd
GMTC,Gametech Internat Inc
GOAM,Goamerica Inc
GRC,Gorman-Rupp Co
GROW,U.S. Global Invest Inc A
GTXI,Gtx
GVP,Gse Systems Inc
HGO,Houston American Energy Corp
HRT,Arrhythmia Research Tech
HRZ,Horizon Lines Inc
IAAC,Internat Asset Holdg Cp
ICAD,Icad Inc
IEDU,Investools Inc
IGLD,Internet Gold-Golden
IIG,Imergent Inc
IMKTA,Ingles Markets Inc Cl A
INAP,Internap Network Svcs Cp
ININ,Interactive Intelligence
IOC,Interoil Corporation
IOSP,Innospec Inc
JST,Jinpan Internat Ltd
KBALB,Kimball Internat B
KBAY,Kanbay International Inc
KNOT,The Knot Inc
KONA,Kona Grill Inc
KOSP,Kos Pharmaceuticals Inc
LFC,China Life Insurance Company
LMRA,Lumera Corporation
LNOP,Lanoptics Ltd
LQU,Quilmes Industl Q.S.A.
LVS,Las Vegas Sands
LXU,Lsb Industries Inc
MAG,Magnetek Inc
MALL,Pc Mall Inc
MCDT,Mcdata Corp Cl B
MCDTA,Mcdata Cl A
MCF,Contango Oil & Gas
MEH,Midwest Express Holding
MEND,Micrus Endovascular Corp
MFB,Maidenform Inc
MFRI,Mfri Inc
MIKR,Mikron Infrared Inc
MNG,Miramar Mining Corp
MSII,Media Sciences Intl Inc
MWP,Markwest Hydrocarbon Inc
MWRK,Mothers Work Inc
MYOG,Myogen Inc
NEXC,Nexcen Brands Inc
NRMX,Neurochem
NRPH,New River Pharmaceuticals Inc
NTY,Nbty Inc
NVDA,NVIDIA Corporation
NVEC,Nve Corp
NWK,Network Equipment Tech
NYX,NYSE Group Inc
OBCI,Ocean Bio-Chem Inc
OMG,Om Group Inc
OMNI,Omni Energy Services Cp
OS,Oregon Steel Mills Inc
PCCC,Pc Connection Inc
PD,Phelps Dodge Corp
PERY,Perry Ellis Int'l
PMTR,Pemstar Inc
POT,Potash Cp Saskatchewan
PRGX,Prg-schultz Intl Inc
PSMT,Pricesmart Inc
PSPT,Peoplesupport Inc
QD,Quadramed Inc
RBN,Robbins & Myers Inc
REGN,Regeneron Pharm Inc
RGR,Sturm Ruger & Co Inc
RGX,Radiologix Inc
RIMM,Research In Motion Ltd
RKT,Rock-Tenn Co Cl A
RMKR,Rainmaker Systems Inc
RMTR,Ramtron Internat Corp
RNAI,Sirna Therapeutics
ROCM,Rochester Medical Corp
ROS,Rostelecom
RRA,Railamerica Inc
RTI,Rti Internat Metal Inc
SGMO,Sangamo Biosciences Inc
SIGA,Siga Pharmaceuticals Inc
SIGM,Sigma Designs Inc
SIM,Grupo Simec S A Adr
SOFO,Sonic Foundry Inc
SPAR,Spartan Motors Inc
SPTN,Spartan Stores Inc
SQNM,Sequenom Inc
SRSL,Srs Labs Inc
SRVY,Greenfield Online Inc
SSRI,Silver Standard Resource
STEC,Simple Technology Inc
STSI,Star Scientific Inc.
SUAI,Specialty Underwriters Allianc
SVNT,Savient Pharmaceuticals Inc
SWAT,Security With Advanced Tech
SWHC,Smith & Wesson Hldg Corp
SYX,Systemax Inc
TCC,Trammell Crow Co
TCHC,21st Century Holdings
TESS,Tessco Technologies Inc
TGEN,Targeted Genetics Cp
THK,Think Partnership Inc
TRT,Trio-Tech Internat
TTEC,Teletech Holdings Inc
TWTI,Third Wave Tech
UAHC,United American Healthcare Cor
UCTT,Ultra Clean Holdings
UUU,Universal Security Instruments
VSNT,Versant Corporation
VTS,Veritas Dgc
ZOLL,Zoll Medical Corporation

Wait and watch

After a big down day yesterday, today is as of now just a lackluster day. Lot of short term systems kick in long entries on such down move and that is helped by the fact that exits get jammed early in the morning. More people want to get out early and those holding longs sell on first hint of weakness. The market makers further accentuate the process by bidding down or pulling bids. When the dynamics plays itself out, you have a quick bounce.

So patiently waiting on the sideline for sometime with lots of cash in hand is good option currently. I am looking at number of longs and waiting to pounce on some good earning plays like JCG,OMRI,DLB,AMAG,ZOLL, GMKT,MGM, etc. which have a catalyst.The oil stocks are finding a bid but I do not yet see anything to be excited about.

There are some stocks up on earning or news and as usual the low float stocks are making some wild moves. This is what I have on my scans on long side:
CRDC,Cardica
CSLR,Consulier Engineering
ECMV,E Com Ventures Inc
GOAM,Goamerica Inc
LPX,Louisiana-Pacific Corp
SVM,Servicemaster Co The
SWAT,Security With Advanced Tech

Buyers Exhaustion

The market was in rally mode since mid July, so correction was expected and normal course of action. In the last few weeks there were several signs of froth with stocks gapping up and making 4-10 dollar moves after that. There were several blowout kind of late momentum phase moves The IPO market was red hot with everyone rushing in to buy Nymex IPO. The markets had moved ahead of themselves.

So a correction of some magnitude is a normal and healthy thing for the market. The markets ran out of fresh set of buyers. Those who bought late after being on sideline were caught holing the bag. Absence of bids leads to scary correction on days like yesterday.

The bears will be all over painting their bearish scenarios and peddling their doom and gloom. While it is easy to get tempted by such talks at these kind of junctures, a more balanced perspective is better option for those looking for profitable opportunities. Not all sectors will be equally affected by correction. Even a rush to short (unless you are a day trader) might result in some serious whipsaws.

The move will evolve over a period of time. The easy money phase of last few weeks is now over. It is back to being a stock pickers market. Stocks with significant earning/sales surprise in last earning season will withstand the correction, similarly stocks with earning and price momentum may go in to bases but some of them will start breaking out after few weeks in anticipation of next earning season. The opportunities on short side will also take time to evolve. Even greater skill is required to pick and time your shorts.

I have only 2 open position currently on long side (LVS and IAAC) and plenty of cash. Here is what I am watching on both long and short side currently:

Long
ADVNB,Advanta Corp Cl B
PNTR,Pointer Telocation Ltd Ord
DXPE,Dxp Enterprises Inc
JCTCF,Jewett-Cameron Trad Co
FTGX,FiberNet Telecom Group
TGEN,Targeted Genetics Cp

Short
BSC,Bear Stearns Companies
BIDU,Baidu.com Inc
GOOG,Google
GS,Goldman Sachs Group Inc
MA,MasterCard Inc
NMX,Nymex Holdings Inc
NYX,NYSE Group Inc
RIMM,Research In Motion Ltd

End of day scans

Posted on 11/22/2006
Just follow the earnings and you can get on some nice moves. I am travelling till Tuesday so posts will be few.


ATEA,Astea International Inc
BBI,Blockbuster Inc
BJ,Bj's Wholesale Club Inc
BRCD,Brocade Communications
BUF,Minrad International Inc
CRAY,Cray Incorporated
CTTY,Catuity Inc
CYBX,Cyberonics Inc
FTGX,FiberNet Telecom Group Inc
JCG,J Crew Group Inc
LAB,Labranche & Co Inc
LNOP,Lanoptics Ltd
MCDT,Mcdata Corp Cl B
MCDTA,Mcdata Cl A
MGM,MGM MIRAGE Inc
MR,Mindray Medical Intl Ltd
NMX,Nymex Holdings Inc
PDCO,Patterson Companies Inc
PLB,American Italian Pasta
PNTR,Pointer Telocation Ltd Ord
PSS,Payless Shoe Sources
SGMO,Sangamo Biosciences Inc
TGAL,Tegal Corp
ZVUE,Handheld Entertainment Inc

Buyers alive and active

Decent action so far. Lot of heavily shorted stuff is finding bid. But there are some excellent earning driven breakouts in this list I am watching or has positions in.
ATEA,Astea International Inc
BBI,Blockbuster Inc
BRCD,Brocade Communications
CRAY,Cray Incorporated
CTTY,Catuity Inc
FTGX,FiberNet Telecom Group Inc
JCG,J Crew Group Inc
LAB,Labranche & Co Inc
LNOP,Lanoptics Ltd
MCDT,Mcdata Corp Cl B
MCDTA,Mcdata Cl A
MGM,MGM MIRAGE Inc
NYX,NYSE Group Inc
PARL,Parlux Fragrances Inc
PDCO,Patterson Companies Inc
PLB,American Italian Pasta
PNTR,Pointer Telocation Ltd Ord
PSS,Payless Shoe Sources
SHLD,Sears Holding Corp

Gaps and traps

walter said...

you know of any way to distinguish between exhaustion gaps vs runway gaps vs normal good strength gaps, etc?

10:40 AM
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Pradeep Bonde said...

I make my leaving trading runaway gap on earnings. One has to look at catalyst plus the magnitude of gap. Gaps of certain magnitude indicate information mismatch. A new set of information was complete surprise and that indicates the move will proceed in that direction. Typically this happens on earnings, new products (in biotechs), regulatory action (on short side), or aberration (say a company has earning growth of 30, 34, 30, 40, 37.....for long and then 5 or -10 or the other way round 5, 7, 6, 8,---and then 100)
So I always investigate 20% plus gaps on both side to see opportunities. You also need to see the volume on such moves. I look at 20% plus 1 million volume.
Exhaustion gaps are easy to find if you know how much % a equity has moved in a year. Plus same thing works on these gaps you see sequence of earning like 80, 100, 120, 130, 120.... and then 140. The stock gaps up like HANS but by that time it was up more than 800% say in a year, so when the grandma in Timbuktu gets excited about it, it is exhaustion gap.



10:57 AM
Delete
Pradeep Bonde said...

The best place to find exhaustion gaps is IBD 100. At some stage they just move ahead of their potential and once the IBD crowd and others get very excited, there are exhaustion gaps or island reversals. IBD 100 is good source of ideas on both long and short side. These gaps also tend to be clustered around earnings.


Now if you are looking for a profitable trading system based on gaps or abnormal % change in price, then the book Swing Trading:Power Strategies to Cut Risk and Boost Profits by Jon D. Markman describes a trading system used by George Fontanills. It is a system based on price and volume gaps.

Now if you know Fontanills, he sells a 3000 dollar option course which basically tells you if you want to master these strategies then you need to buy another $5000 platinum course and so on. So when I read it at first I was very skeptical of it. But I tested it and it has lots of merits.

The system in short:
" Basically it comes down to finding stocks with greatest short term
momentum that will turn in to long term momentum."
The Scans:
1 up or down 30% in a single day on at least 300000 shares traded or
2 up or down 20% in a single day on at least 1 million shares traded or
3 up or down 5$ in a single day on volume of at least one million shares and
4 still trading above $7 and
5 has options
6 has a long term catalyst like earnings or accounting fraud

He buys options on it after few days , typically such stocks after a pause tend to move up or down.

I have tested it and it works, by using options it gives leverage. It gives very few signals daily, but they are very powerful. You can modify it to get better results.

Watch for buyers exhaustion

Shorts do not drive the market down. In larger market ecosystem shorts and perma bears are small insects. What you have to watch for at this stage is buyer exhaustion. On some of the high flying stocks the greater fool theory is at work, where there are no more fools ready to chase $3-5 every day gaps. The latecomers to the party find buying the morning exuberance leads to them being left to hold the bag.Some stocks have been up for days without a negative day. They are extremely prone to such exhaustion.

For longevity of this rally a correction is the best course of action. Picking individual stocks not prone to buyer exhaustion is currently the key.

Simple things work

Extremely simple things work in the market. But that is true of life in general. However most of us are addicted to complexities. Simple things like earnings breakout, earning momentum, price momentum, deep value, earnings acceleration etc. work.

Given a simple idea, most traders first instinct is to make it complicated. Add more indicators, more scans, more patterns, more elaborate multi factor equity selection models and the works. Instead of trading breakouts on high probability equities, they want to enter even before that, thinking that they will find some miracle system to get them in before breakout.

After reading some of the earning lead breakouts kind of examples I have talked about like TRT, SHR, BWLD, GROW etc, a trader has been exchanging emails with me for past few days. I explained to him why those plays work and why entry after the earning is best. After few back and forth, his point is but if he can get in before the earning then he will benefit from the 20 to 50% pop on day of earning. Now he has got in to some extremely complicated models to predict such events.

Some people love complexity. They have 30 different scans they run. They have 24 different chart patterns they monitor. They have at least 10 indicators on charts. They daily monitor some 15 different market indicators like Vix and so on. All this complexity gives them a feeling of control.

Look at all these traders who obsessively monitor GDP of USA and 200 other countries, get orgasmic about M3, are excited on days of inflation data release. They monitor everything and what is the end result. I can bet none of this helps them in their trading.

Modern corporations and modern life is full of complexities. Complexities leads to increased cost and poor decision making.

One of the companies I worked for had such and elaborate and complex budget making process that in most years the managers would spend six months doing budgets. The spreadsheets used for budget making were so intricately linked as complexities increased that one mistake some where would involve going trough 78 linked spreadsheets (needless to say each one of those 78 had furter linkages). The rate card had 27 different prices, which no one used, but it was faithfully printed and circulated and billing soft wares built to handles 27 prices.

So when I taught a strategy and perspective management course , I always use to insist on simple easy to understand one page analysis of complex management problems and 200 page plus case studies.For most MBAs complexity and jargon is engineered in to their DNA. In fact all you learn in most MBA schools is how to make complex presentations, graphic slides, and invent complex jargon for simple things. I always use to tell the students make it easy for me to understand. So much so that they started calling me "easyguru" behind my back.

As a trader if you want profitable systems just keep it simple. Avoid the first temptation to add more variables. Simpler the system, more profitable you will be.Complexity is not a profitable strategy. If you can not explain your strategy to 5 year old in easy language, you don't have a strategy.

Small caps offer some good opportunities

Posted on 11/21/2006
The overall market might correct at this level, but some good low risk opportunities are still available. Number of small caps are breaking out. Some from multi year consolidations. So they are not likely to reverse in hurry. Some have new earnings power or accelerated earnings and have just been discovered by market. As always the high priced stock offer good opportunities for point moves.

There are number of good ideas in the following list:

ACL,Alcon Inc
AFN,Alesco Financial Inc
ANDS,Anadys Pharmaceuticals
ANSW,Answers Corp
BIDU,Baidu.com Inc
BWS,Brown Shoe Co Inc
CAAS,China Automotive Systems Inc
CHINA,CDC Corp Class A
CTDC,China Technology Development Group Corp
DE,Deere & Co
FMCN,Focus Media Holding Ltd ADR
GOOG,Google
IMM,Immtech Pharmaceuticals Inc
JAS,Jo-ann Stores Inc
MCF,Contango Oil & Gas
MDT,Medtronic Inc
MEK,Metretek Technology Inc
MWRK,Mothers Work Inc
NYX,NYSE Group Inc
OSTE,Osteotech Inc
POT,Potash Cp Saskatchewan
SLG,Sl Green Realty Corp
USEG,U.S. Energy Corp Wyo
WTSLA,Wet Seal Inc Cl A The

Booking profits

Using current strength to book profits on positions opened in last couple of weeks.When your cumulative holdings start moving in 20-25 points increment per day, it is time to thank the god, the person or persons in charge of this bullish conspiracy, the Feds, the Chinese,Goldman Sachs, the perma bears and whoever else and bank some profits. Santa came early this season.

I have currently 5 positions open and in worst case scenario will lose 10% , some of that I am trying to protect with options. I also found one good possible short position, where I am planning to buy puts during this bullish season.

As always I remain ready to pounce on some bullish ideas if they meet my criteria. Here is what I am finding in my scans currently.



ACL,Alcon Inc
AFN,Alesco Financial Inc
ANSW,Answers Corp
BIDU,Baidu.com Inc
BWS,Brown Shoe Co Inc
CHINA,CDC Corp Class A
CNS,Cohen & Steers Inc
CTDC,China Technology Development Group Corp
CWTR,Coldwater Creek Inc
DE,Deere & Co
EFUT,E-Future Info Tech Inc Ord
FMCN,Focus Media Holding Ltd ADR
GOOG,Google
GRRF,China Grentech Corp Limited ADS
IAAC,Internat Asset Holdg Cp
IDP,Idera Pharmaceuticals Inc
IMM,Immtech Pharmaceuticals Inc
JAS,Jo-ann Stores Inc
JST,Jinpan Internat Ltd
JWN,Nordstrom Inc
KNOT,The Knot Inc
MCF,Contango Oil & Gas
MEK,Metretek Technology Inc
MWRK,Mothers Work Inc
NYX,NYSE Group Inc
OSTE,Osteotech Inc
SLG,Sl Green Realty Corp

2006 Earnings Estimates Rising

The reason for rally will become apparent at some stage, but there are some clues in the earnings trend. Analyst now are busy raising estimates.If you have noticed some of the best moves are happening in stocks with good earnings.

Earnings season is wrapping up and the bulls have reason to cheer. Since third quarter reporting began over a months ago, the last of the market’s bearishness has faded and a new wave of buying has taken its place. Whether or not the rally is justified can be discussed in another piece, but one thing does stand; favorable third-quarter earnings reports have continued to stoke investor expectations. Over 92% of the S&P 500 companies have reported and positive EPS surprises outnumber negatives by better than 3:1. The median surprise is an impressive 3.3% and median growth thus far is 12.7%.

Looking ahead to next year, the revisions ratio has continued its uptrend and remains above 1.0, at 1.21. This is extraordinarily important. With the economy slowing, housing in a free fall and the yield curve inverted, one can easily make an intellectually coherent case for a recession next year. However, there has never been a recession where earnings grow at anything close to a double-digit rate. This is the elephant in the room that must be explained by any recession predictor. There is no way that the expected growth rate will come down unless estimate cuts exceed estimate increases.

How will this end

If you want to know how this will end. Just look at 2003.Look at the top performers in 2003. The later part of the move was the best time to trade, things will breakout and just go. I remember catching number of moves like FLML, LCAV,NTES, RIMM ,TASR , etc, in the late bull phase in 2003. It is scary to buy something up 5 or 8 or 10 USD or up 20 to 30%. But those are the kind of stocks which make runaway move in late phase. This move so far has all the characteristics of that move.

I maintain a reading insight notebook where I write down leanings from each phase and then review it daily. That way I am constantly reminded of good and bad times in trading plus helps in quickly identifying moves. Everyday morning I flip through it, first thing in the morning.I keep adding insights or learning to it. I have been digging out 2003 notes and trades to keep one of the possible way in which the move will end. Look at the Mcclellan indicator during that period.

I am amazed at the number of people who are on sideline. Someone just sent me snippets from a fairly popular newsletter writer amongst blogosphere, he has been on sideline for more or less the entire move and has been advising the same to followers since July. Missing out some of the best money making period by being on sideline will definitely end up in under performing the market. That newsletter is not the only one on sideline there are many others like that.

I seriously question a methodology which could not find few good low risk ideas in last 4-5 month.Many of the stocks which broke out in August or September are now accelerating up. They offered many low risk entry points before the runaway phase started. I can understand someone on sideline in last couple of weeks but for extended period of 5 months is difficult to explain unless you have some very high hurdles for entry.

The rationalisation being offered is cash is position. I am every day amazed at how many people keep buying such misplaced advise. Chasing this move at this stage requires extremely good risk management method and brass balls. Not every ones game. You have to trade this move with one eye constantly focused on exit.

No time to R&D

It is not time to perfect your system or R&D, it is trading time. If you are trading any of the methods which I talked about for over a year, you should be cleaning it up. This is an ideal market for runaway moves. Those following the Boucher runaway method must be feeling like kids in candy land currently. If you are using any of the scans I talked about, you should be in most of the good movers in last couple of weeks.
Here is what I have on my watch or positions in.

AFN,Alesco Financial Inc
BIDU,Baidu.com Inc
BWS,Brown Shoe Co Inc
DE,Deere & Co
EFUT,E-Future Info Tech Inc Ord
FMCN,Focus Media Holding Ltd ADR
GME,Gamestop Corp
GOOG,Google
IMM,Immtech Pharmaceuticals Inc
JAS,Jo-ann Stores Inc
MDT,Medtronic Inc
MWRK,Mothers Work Inc
NYX,NYSE Group Inc
RS,Reliance Steel & Alum Co
TECD,Tech Data Corp

Methods and markets

Market is ever changing. Market is not predictable. Market is complex. Market offers too many choices. Market is not controllable. But methods are controllable. Methods can be constant irrespective of the market situations. Methods are under traders control. Your trading mix is completely controllable and that is the key to profitability.

In marketing there is a concept called marketing mix. The central hypothesis is that you can not control the consumer behaviour but what you can control is the marketing mix.


Marketing decisions generally fall into the following four controllable categories:

* Product
* Price
* Place (distribution)
* Promotion

The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis.
These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response.


Same way your trading mix is completely under your control. The elements of trading mix are :

Market selection (equity selection in stock market case)
Entries selection
Exits selection
Risk selection

Like in marketing the product is critical no amount of price, promotion or place variable changes can substitute for poor product strategy. Similarly as a trader your most important decision is equity selection. Which stocks to trade is 80% of the solution to profitable trading success. That is why technical analysis often does not produce the desired results because it primarily deals with entry and exit selection.

In a complex market offering too many choices (around 8000 stocks), dynamically selecting the equities is the key. The dynamic selection should bring to your trading conveyor belt a series of best possible opportunities for given time periods.In a bear market or sideways market the method must select the best opportunities for that period dynamically. Similarly in a runaway markets it selects the best opportunities with runaway characteristics.

There are various way to select equities dynamically. But most of the one which work are based on some statistically proven anomalies. Traders may or may not be aware of them. No matter the markets certain things work. The amplitude of return might be different but few key anomalies work across market situations and across stock markets in various countries. The earnings drift is one such thing. Earning momentum is one such thing. Price momentum is one such thing. Neglected IPO effect is one such thing. Like this if you start focusing on finding anomalies, you will find around 50 such anomalies which have edge. Some highly secretive hedge funds and traders may have found even more.

While there is a belief amongst most traders that if you share you will lose your edge, it might be true of certain anomalies, but some of the robust anomalies just do not disappear. They have been written about for donkeys years and various explanations have been offered as to why they work, but they continue to work. Knowing does not translate in to profitability. Making these insights work is a craft.

Making Pizza is very easy but only certain pizza outlets are extremely successful. The ingredients of pizza are no secret, but the craft of making it differs and most very successful or famous pizza places have a small unique twist to the method, which makes them stand apart.
Similarly knowing a trading concept or method and making it work and making money out of that idea requires a trading craft. It might be qualitative pattern recognition or quantitative pattern recognition. Look around there are so many hedge funds (pizza shops), they use same ingredients, have similar calibre quants or technical analyst, they know most of these anomalies (having worked in investment banks before), yet some hedge funds (pizza shops) consistently do well while others struggle.

Converting idea in to profitable idea is the craft. One way to learn craft is by watching others who are more proficient at it. Deep knowledge works. Breaking down craft in to small units work. Mentoring works in high skilled professions. Crafts are difficult to transfer from one person to another. Transfer often requires an extended period of interaction between the two parties involved. Learning craft also requires extraordinary level of motivation and dedication and time efforts. Both the person imparting the skill and person learning it must have extraordinary motivation for the process to work successfully. Most successful traders may not want to commit that level of time to transfer craft unless they find someone with potential. That is why trading remains so difficult and elusive craft.

Every week I take my daughter to ice skating classes and watch some very skilled skaters and observe their training schedules and talk to some of them and their coaches. The efforts involved plus the cost involved are beyond what most people are willing to put in.

Day after day I trade the same set of methods which I have selected for my own kind of financial objective. None of them is secret all involve focusing on few (less than 100) stocks with outstanding earning surprise, earning momentum, sales momentum, or price momentum. Besides that I trade one neglected IPO's anomalies. By focusing and perfecting few it is now an automatic task. It is like chopping onions without looking at your fingers, the onion or the knife.

The markets change but methods remain same.


Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.




What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading site that offer free trail or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.


How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.


POPULAR POSTS

Big breasts , asset management, and steel

Posted on 11/20/2006
The theme for the day was silicone implant companies, asset managers and steel companies. New sectors keep breaking out on big volume. Many of these breakouts have legs and will find more buyers post corrections/consolidation.
Based on today's action I have put asset mangers and mutual fund companies like TRWO, BEN, and PJC on watch for next couple of days. I already have position in IAAC. It has excellent earning and small float.

ACOR,Acorda Therapeutics Inc
AGN,Allergan Inc
ASCA,Ameristar Casinos Inc
BXP,Boston Properties Inc
CALD,Callidus Software Inc
CRDC,Cardica
CYBX,Cyberonics Inc
EFUT,E-Future Info Tech Inc Ord
IAAC,Internat Asset Holdg Cp
IPS,Ipsco Inc
LCRD,Lasercard Corporation
MCF,Contango Oil & Gas
MNT,Mentor Corp Minnesota
REDF,Rediff.Com India Ltd Ads
STLD,Steel Dynamics Inc
ZVUE,Handheld Entertainment Inc

Short Targetting

I was watching REDF, which was showing up on my scan today. While going through news to find the catalyst for such a move, I found an alert issued by a site which targets naked short selling. Such kind of actions will proliferate now. While some heavily shorted stock might pop a day or two, the better bets are always one with earning/sales momentum.
Such speculative games are very common during such late momentum phases.


November 17, 2006 / M2 PRESSWIRE / BUYINS.NET, www.buyins.net, announced today that these select companies have been removed from the NASDAQ, AMEX and NYSE naked short threshold list: Adherex Technologies, Inc. (AMEX: ADH), Philippine Long Distance Telephone Company (NYSE: PHI), Rediff.com India Limited (NASDAQ: REDF), Utek Corporation (AMEX: UTK), Westside Energy Corporation (AMEX: WHT), Aradigm Corporation (NASDAQ: ARDM). For a complete list of companies on the naked short list please visit our web site. To find the SqueezeTrigger Price before a short squeeze starts in any stock, go to www.buyins.net.
........
Rediff.com India Limited (NASDAQ: REDF) provides online news, information, communication, entertainment, and shopping services focusing on India and the worldwide Indian community. Its Web sites consists of interest specific channels relevant to Indian interests, such as cricket; astrology; matchmaker and movies; content on various matters like news and finance; search facilities; a range of community features, such as email, chat, messenger, and e-commerce; broadband wireless content; and wireless short messaging services to mobile phone subscribers in India. The company also publishes two weekly newspapers aimed at the Indian-American community based in the United States and Canada. As of March 31, 2005, the company had 36 million online registered users. The company was founded in 1996 by Ajit Balakrishnan under the name Rediff Communication Private Limited. It subsequently changed its name to Rediff.com India Limited in 2000. The company is headquartered in Mumbai, India. With 29.08 million shares outstanding and 1.16 million shares declared short as of Oct 2006, there is no longer a failure to deliver in shares of REDF.

Profit taking

Ahead of the long holiday week, we are witnessing lot of profit taking. Frankly when you see so many gaps and gaps of 4 dollar plus after a long rally, you should expect some profit taking. Expect some wild moves on Tuesday and Wednesday as momentum players play their game in thin trading environment. Lot of heavily shorted names or sectors will be targeted to shake out short sellers. Low float and high short interest can sometime create explosive moves.
I am not finding much in scans today and have few new positions barring some quick morning hits.
Here is what I am finding in my scans currently:
AGN,Allergan Inc
ASCA,Ameristar Casinos Inc
BXP,Boston Properties Inc
CRDC,Cardica
CYBX,Cyberonics Inc
IPS,Ipsco Inc
LCRD,Lasercard Corporation
MCF,Contango Oil & Gas
MNT,Mentor Corp Minnesota
STLD,Steel Dynamics Inc
ZVUE,Handheld Entertainment Inc

No surprises in "web's most prominent investment bloggers" poll



There are no surprises in this poll since it started. Now as someone has commented on Tickersense, as against this poll the other sentiments poll are showing bullishness. The reason is apparent, the sample selection is subjective. What is "web's most prominent investment bloggers" definition. It is based on what Tickersense says. There is no science to it.

Subtle towel throwing by Dow 6800 bear

Now a prominent bearish analyst featured in major business publication (WSJ, CNBC, Business Week, Bloomberg etc) and a constant fixture on business TV is claiming that his persistent bearish thesis and cheer leading of the bearish case with a public prediction of Dow 6800 by 2006 end was just public posturing. Actually he was bullish and buying during that time, he never advised shorting or doubling down to hedge fund friends. Never, never, never.

Listen, people can snipe all they want. The Bulls are in full chest pounding mode, and as someone else wrote, the louder they yell, the more you know you are right.

Despite my protestations that Forecast is folly, I play the game and tried to shake things up. Any forecast is stale within a week -- did anyone predict the GSCI change? The elction sweep? Might that impact the thinking from that point forward?

Some sheeple seem to put way too much stock in other people's forecasts. GAPTFY -- Grow a pair / think for yourself is fast becoming our motto at TBP.

As to the long side, the short term trading calls have all been public -- including the Bullish BUY call on June 13 (pretty decent timing).

The option trade I rec'd on Q calls was only up 750% over the next 48 hours -- those made Cody crazy (why long? Aren't you bearish?) as if the long term macro view was going to impact your day to day trading.

Then there are the Buys of BP, SWY, ORCL, IBM, CPB, MOS, etc. All very public, and all pretty good.

Again, the blog is here for intellectual stimulation and discussion -- not trading advice.

I question the intelligence of those people who don't think for themselves, and are relying on blogs, Yahoo message boards, and (whattthehell) spam emails for their trading strategies and ideas . . .

Posted by: Barry Ritholtz | Nov 17, 2006 7:37:47 AM


It is always the intelligence of others which is in question. It is others who are pseudo contrarians. It is others who are morons.
That is a very subtle way to throw the towel and CYA.Now some would call that extraordinary deception. What was alleged crime of Henry Blodget, that he publicly was cheer leading a stock and privately dissing it. Apprenticed investors, you got screwed.