'Let me preface this by saying that my bear mojo has been almost completely drained from my veins at this point. The best positions I have are all long ones, and after 20+ months of hearing (and repeating) Why The Drop Is Going To Start Now, I'm getting close to just focusing on the long side. Call it capitulation if you like; I think I'm past caring.'
Just watched Fast Money while I was convincing the 2 yr old she WANTED to go to bed. Not a bear in sight anywhere. At the end of the show Joe mentioned that a good jobs report will (probably?) strengthen the dollar and you mite see some profit taking in the market. BUT, earlier in the show he mentioned that right now the hard trade is probably to stay long and not take profits.
Thanks to TOF - I had actually been looking at buying puts on NFLX last weekend. Yesterday bot 2 JAN 190 puts at 9,60 and sold them today for 13.60 after TOF started mentioning NFLX. Yeah I know, small volumes for all you guys but that's about my dollar limit on naked puts/calls. I'll toast the TRADING TOPICS GANG when I make my pilgrimage to Pappasito's this weekend to get my break from the kids,
Re: Weak Jobs Report? newSubmitted by 2nd_ave (5016 comments) on Fri, 12/03/2010 - 09:43 #75304 (in reply to #75301) Here's my take- December numbers revised up +100k, January numbers in line, February numbers blows away expectations just in time for a rally into spring '11.
BAC Submitted by 2nd_ave (5018 comments) on Fri, 12/03/2010 - 09:57 #75310 No way. BAC passengers with nerves of steel still jumping off with every dip in the tracks?
Wikileaks - I was pleased to hear Saudi Arabia was requesting something be done about Ahmadinenutjob.
Now US defense industry can load up on back-orders?
The right way to go about solving these problems involves a terminal case of lead poisioning rather than continued enrichment of the same good 'ol boys club at the expense of volunteers and innocent victims.
I'm in a quandary about such matters. Yesterday I read it could take up to $8T to unify N. Korea, which is why everyone steps back from doing anything about Little Kim.
What might it cost to deal with Iran? Who knows but it would make Iraq/Afghanistan look cheap.
I'm also confused about which good ol' boys. Seems the usual crowd is making us look both stupid and not so 'free'.
President Onixon is looking more and more inept. I can't believe I voted for the bufoon. So much for 'chains' I can believe in.
I read this AM that Secretary of State will be Hillary's last public duty. I hope the door doesn't whack her in the ass on the way out.
I'm seriously shopping for land in a central American country. This place is swirling in the bowl.
I wanted to place a sell short stop order on CRM yesterday at $142/$141.95, but forgot to do it and so I didn't get faked out this morning. :) But now, after CRM dipped twice to $141.90 in the past few days and rocked higher (but only up to $145), its range has become clear. So I am now placing a sell short stop limit order for 100 shares at $141.75/$141.50.
David - Check out what CMG and NFLX are doing man. These high flyers are all susceptible in my opinion. The playbook I think is to short them and go long the banks/big cap laggers. Just my opinion though.
Hi Guys - tossed the futures trading system into the trash. Back to stocks/options only. My mind is just not fast enough to be successful trading futures.
TOF, 71.3 looks like a support for OPEN over the past few days. However, if you look at the 1-month intraday price chart, then it shows a clear triangular pattern (horizontal triangular flag pointing to the right) since November 24, and a break of that flag pattern would be a more sure indication, IMO, of a new trend (breakout or a breakdown). The flag would be broken convincingly if OPEN drops below $70. So I have just placed a sell short stop limit order for 100 shares of OPEN at $69.75/$69.50.
David - I believe I got the last shares available to short yesterday at $73.10. I only got a couple hundred shares. Alternatively, there are thousands of put options for sale :) and I'm sitting with those as well.
"Alternatively, there are thousands of put options for sale :) and I'm sitting with those as well."
Yep, I may purchase some deep in the money puts (so as not to pay any options premium) once OPEN breaks through $70 and will then close them if OPEN rises above $70.
David - OPEN is one tough cookie so far. It just won't give up. Hopefully today is the start of a trend. I have seen a few high fliers really take it on the chin this week. I think this spreads to the OPENs and CRMs of the world.
I am going to Hawaii with my family next week until December 14th, and so I probably won't have much presence on this blog until I return. So good luck guys -- don't do anything silly in my absence. :)
In case ESLR spikes up while I am away, I decided to set some "traps" for it and placed a sell limit order at $0.87 for the 5000 shares I purchased at $0.77, and then at $0.97 for 3000 more shares I purchased at $0.77.
The recent sale of REDF, which I bought on a pullback to $3, paid for the air tickets for the whole family, just like the first sale of REDF during its bounce from $2 to $4 paid for my complete Laguna Beach vacation. Now REDF will be officially designated as my "vacation stock." :)
Wow, my IBKC is up 7.6% since I bought it at $50.03 on Monday. I lucked out and pretty much bought the bottom of the recent trend. I only bought 150 shares and am planning on adding to this over time. My plan is to buy every other month or at a point in time when the stock takes a few % point hit. I believe this will be the next big regional bank like RF, only better because it has very conservative management and came through the credit crisis completely unscathed. Some day I think it could become a USB type bank and it could pay out a dividend equal to a 50% yield on today's investment. Wishful thinking for sure, but I really like the long term picture for this bank.
re: OPEN - Consider this: The company has a trailing twelve months free cash flow of $16.7 Million. Normally companies trade at about 10 to 12 times free cash flow in the Business Services sector that they are in. See GPN ($400 Million in free cash flow; Market cap of $3.4 Billion), FISV ($650 Million FCF; Mkt cap of $8.7 Billion), and VRSK ($280 Million in FCF; Mkt Cap of $5.4 Billion) as guides.
However, for some odd reason this company is trading at...get this...100 times free cash flow. To understand what this means, just think of it in terms of a company looking to buy them out. That company would have to look at how much cash the company can throw off and see if it makes sense to buy them. Let's assume they bought them at a 0% premium to today's prices. That company would make their money back after 100 years if OPEN were able to continue to generate the same amount of free cash flow it is currently generating. 100 Years!
If you base it on earnings, well it gets even more ridiculous. The company is currently trading at 109 time earnings. If the company were to grow earnings 25% a year for the next 10 years, it would be able to earn about $6/share and the stock would currently trade at 12 times 2021 earnings...and that's without doing any present value calculations on those earnings.
25% growth for a high flyer is always possible. Just keep in mind, though, that according to the company itself, it currently has 50% of the entire US market as its customer base. A growth rate of 25% annually implies 6 fold growth in 10 years. That's an issue when the opportunity they have within the market is only double and that assumes a 100% penetration rate. So either the number of reservation taking restaurants magically grows 6 fold in 10 years in the US or this stock is extremely overvalued.
All cash in accounts at the moment. Could kick myself for not buying more DGP and selling what I had too early, and not reloading on the pullback.
That said, my RBY trade propelled my accounts well into new all time high territory. My wifes account is at an all time high, even though she has been pulling about 3% per month out on avg. My IRA is now at 27 times what I put into it. What used to be the "big account" but got devastated paying taxes is close to 6 digits again. My Tradestation account is well into all time high territory. And even the Thinkorswim account, which got killed when I stopped out on $5 mm of gold a month ago has recovered to a $22k profit YTD.
But even so, the opportunities lost really hurt mentally. I guess I need to keep plugging away at doing better.
Still waiting for panic to reload RBY large position. Expecting that early next week. If my hunch is correct, they will dilute by $150 to $250 mm, and that will tank the stock. Picking the bottom won't be easy, though. This is all just speculation on my part. I know nothing concrete, but its been 1 yr since last financing, and it will cost at least $150 mm to build the mine. Maybe they are waiting a bit to see if a suitor appears, to give that a chance, before going ahead with diluting and building?
I don't know that I'd be shorting anything right now.
ReplyDeleteLatest from Kass:
ReplyDelete'I continue to believe that our economy will surprise on the upside in the months ahead.
'Our improving stead (over here) is in contrast to the growing and recognized abyss in certain regions in Europe.
'I am now net long for the first time in quite a while.'
Latest from TK:
ReplyDelete'Let me preface this by saying that my bear mojo has been almost completely drained from my veins at this point. The best positions I have are all long ones, and after 20+ months of hearing (and repeating) Why The Drop Is Going To Start Now, I'm getting close to just focusing on the long side. Call it capitulation if you like; I think I'm past caring.'
I think we're going higher from here. Much higher.
ReplyDelete2nd,
ReplyDeletemaybe it will go higher.... it just depends on how High that kite filled with helium can fly
then, Pop goes the Weasel..
Where is Chick poo
Just watched Fast Money while I was convincing the 2 yr old she WANTED to go to bed. Not a bear in sight anywhere. At the end of the show Joe mentioned that a good jobs report will (probably?) strengthen the dollar and you mite see some profit taking in the market. BUT, earlier in the show he mentioned that right now the hard trade is probably to stay long and not take profits.
ReplyDeleteThanks to TOF - I had actually been looking at buying puts on NFLX last weekend. Yesterday bot 2 JAN 190 puts at 9,60 and sold them today for 13.60 after TOF started mentioning NFLX. Yeah I know, small volumes for all you guys but that's about my dollar limit on naked puts/calls. I'll toast the TRADING TOPICS GANG when I make my pilgrimage to Pappasito's this weekend to get my break from the kids,
TK throwing in the towel. Is this not a contrary indicator? Yes Tim, Capitulation and not caring are about the same.
ReplyDeleteRB
sold the DGP here at 41.70's
ReplyDeleteRoBear - that's exactly what I was thinking as well. Looks to me like CRM is shortable/puttable at these prices. Yesterday looks like a lower high.
ReplyDeleteWeak jobs report? I'm trying to intercept the brain waves of the average investor here-
ReplyDelete'Been there, done that- Next.'
Added to BAC @ 11.54 PM.
ReplyDeleteHa (CRM)! Well maybe I meant OPEN?
ReplyDeleteEither way I have puts on both OPEN and CRM.
ReplyDeleteTBT @ 35.93.
ReplyDeleteIf we close the gap from this morning then bears gotta be saying to themselves: what the eff
ReplyDeleteI just kinda 'see' DIA >114 by the close.
ReplyDeleteRe: Weak Jobs Report? newSubmitted by 2nd_ave (5016 comments) on Fri, 12/03/2010 - 09:43 #75304 (in reply to #75301)
ReplyDeleteHere's my take- December numbers revised up +100k, January numbers in line, February numbers blows away expectations just in time for a rally into spring '11.
sold the RBY at 5.89
ReplyDeleteNo way. BAC passengers still jumping off with every dip in the track?
ReplyDeleteTBT moving smartly.
ReplyDeleteBAC
ReplyDeleteSubmitted by 2nd_ave (5018 comments) on Fri, 12/03/2010 - 09:57 #75310
No way. BAC passengers with nerves of steel still jumping off with every dip in the tracks?
'Smartly.' I like that word.
ReplyDeleteBAC the only green big bank on my list. spoke to soon...now breakeven.
ReplyDeleteI swear...**they** are reading my posts. BAC proceeded to tank and CRM/OPEN proceeded to spike after my posts
ReplyDeleteYeah I know the feeling...
ReplyDeleteAdding to MMR @ 15.21.
ReplyDeleteHey all, I'm having trouble with the internet connection over here, should have it fixed by Tue hopefully.
ReplyDeleteMeanwhile, it's all up to you guys!
MMR...Nice.
ReplyDeleteGL guys.
CP- Can you get a wireless back up service?
CP....are you hosting Wikileaks? That could be the problem....
ReplyDeleteFF
Yeah, I need to do something to improve the internet connection but as long as you guys are on the job I feel comfortable. ;)
ReplyDeleteMaybe by Tue an unanticipated bargain will materialize...
Bought some BYD $10 Jan calls at $.55. Huge spike in the stock and the calls. I still think a buyout is coming. Also bought some shares at $9.38.
ReplyDeleteWikileaks - I was pleased to hear Saudi Arabia was requesting something be done about Ahmadinenutjob.
ReplyDeleteNow US defense industry can load up on back-orders?
The right way to go about solving these problems involves a terminal case of lead poisioning rather than continued enrichment of the same good 'ol boys club at the expense of volunteers and innocent victims.
Added a few more OPEN puts. This bad boy is going to crash and burn just like NFLX is.
ReplyDeleteI'm in a quandary about such matters.
ReplyDeleteYesterday I read it could take up to $8T to unify N. Korea, which is why everyone steps back from doing anything about Little Kim.
What might it cost to deal with Iran? Who knows but it would make Iraq/Afghanistan look cheap.
I'm also confused about which good ol' boys.
Seems the usual crowd is making us look both stupid and not so 'free'.
President Onixon is looking more and more inept.
I can't believe I voted for the bufoon.
So much for 'chains' I can believe in.
I read this AM that Secretary of State will be Hillary's last public duty. I hope the door doesn't whack her in the ass on the way out.
I'm seriously shopping for land in a central American country. This place is swirling in the bowl.
FF
Added more OPEN puts...now have about $4k worth of puts in OPEN.
ReplyDeleteClosed my one CRM put at 5% profit. With commissions I believe I made $1.50. Woo hoo!
I wanted to place a sell short stop order on CRM yesterday at $142/$141.95, but forgot to do it and so I didn't get faked out this morning. :) But now, after CRM dipped twice to $141.90 in the past few days and rocked higher (but only up to $145), its range has become clear. So I am now placing a sell short stop limit order for 100 shares at $141.75/$141.50.
ReplyDeleteDavid - Check out what CMG and NFLX are doing man. These high flyers are all susceptible in my opinion. The playbook I think is to short them and go long the banks/big cap laggers. Just my opinion though.
ReplyDeleteHi Guys - tossed the futures trading system into the trash. Back to stocks/options only. My mind is just not fast enough to be successful trading futures.
ReplyDeleteAdded a bit more AEE @29.13
If OPEN breaks $71.3ish this is going to drop fast in my opinion. I'm biased though so I'm rooting for this.
ReplyDeleteMeanwhile, BYD is absolutely on fire. Buyout at the close!?!?
ReplyDeletetof - on OPEN, perhaps back to the 55 area?
ReplyDeletejb - if OPEN goes to $55 and I can catch the entire move, I will be one happy man. I personally think it should be no higher than $35 to $40.
ReplyDeleteTOF, 71.3 looks like a support for OPEN over the past few days. However, if you look at the 1-month intraday price chart, then it shows a clear triangular pattern (horizontal triangular flag pointing to the right) since November 24, and a break of that flag pattern would be a more sure indication, IMO, of a new trend (breakout or a breakdown). The flag would be broken convincingly if OPEN drops below $70. So I have just placed a sell short stop limit order for 100 shares of OPEN at $69.75/$69.50.
ReplyDeleteDamn! There are no shares of OPEN available for shorting at OptionsHouse...
ReplyDeleteDavid - I believe I got the last shares available to short yesterday at $73.10. I only got a couple hundred shares. Alternatively, there are thousands of put options for sale :) and I'm sitting with those as well.
ReplyDeletegood luck tof, i can't think of a less sustainable biz model than the one those jokers are running with
ReplyDeletehey David - how is life at the Big O? I have fond memories of my time their, liked my office in twin dolphins better than the one in the emerald city.
ReplyDeletejb -- I am enjoying my time at Oracle. I can't say anything about offices, since never go to work. :)
ReplyDelete"Alternatively, there are thousands of put options for sale :) and I'm sitting with those as well."
ReplyDeleteYep, I may purchase some deep in the money puts (so as not to pay any options premium) once OPEN breaks through $70 and will then close them if OPEN rises above $70.
David - OPEN is one tough cookie so far. It just won't give up. Hopefully today is the start of a trend. I have seen a few high fliers really take it on the chin this week. I think this spreads to the OPENs and CRMs of the world.
ReplyDeleteSold a couple of my BAC calls at 22% profit at the close just to take a little off the table. Still have the stock and most of my calls.
ReplyDeleteI am going to Hawaii with my family next week until December 14th, and so I probably won't have much presence on this blog until I return. So good luck guys -- don't do anything silly in my absence. :)
ReplyDeleteIn case ESLR spikes up while I am away, I decided to set some "traps" for it and placed a sell limit order at $0.87 for the 5000 shares I purchased at $0.77, and then at $0.97 for 3000 more shares I purchased at $0.77.
The recent sale of REDF, which I bought on a pullback to $3, paid for the air tickets for the whole family, just like the first sale of REDF during its bounce from $2 to $4 paid for my complete Laguna Beach vacation. Now REDF will be officially designated as my "vacation stock." :)
ReplyDeleteWow, my IBKC is up 7.6% since I bought it at $50.03 on Monday. I lucked out and pretty much bought the bottom of the recent trend. I only bought 150 shares and am planning on adding to this over time. My plan is to buy every other month or at a point in time when the stock takes a few % point hit. I believe this will be the next big regional bank like RF, only better because it has very conservative management and came through the credit crisis completely unscathed. Some day I think it could become a USB type bank and it could pay out a dividend equal to a 50% yield on today's investment. Wishful thinking for sure, but I really like the long term picture for this bank.
ReplyDeleteDavid - have fun in Hawaii. I need to go there some time.
ReplyDeleteDamn...Had to fly blind today. Internet/cable was out all day. Nice close. 1.4% day for me!!
ReplyDeleteJB- Glad to have you back :).... What are you trading now?
I'm long...Biggest to smallest...
BAC
MMR
BYD
SSO (in both IRA's also)
TIE
WATG
CADC
Opps..And TBT/UNG..
ReplyDeletere: OPEN - Consider this: The company has a trailing twelve months free cash flow of $16.7 Million. Normally companies trade at about 10 to 12 times free cash flow in the Business Services sector that they are in. See GPN ($400 Million in free cash flow; Market cap of $3.4 Billion), FISV ($650 Million FCF; Mkt cap of $8.7 Billion), and VRSK ($280 Million in FCF; Mkt Cap of $5.4 Billion) as guides.
ReplyDeleteHowever, for some odd reason this company is trading at...get this...100 times free cash flow. To understand what this means, just think of it in terms of a company looking to buy them out. That company would have to look at how much cash the company can throw off and see if it makes sense to buy them. Let's assume they bought them at a 0% premium to today's prices. That company would make their money back after 100 years if OPEN were able to continue to generate the same amount of free cash flow it is currently generating. 100 Years!
If you base it on earnings, well it gets even more ridiculous. The company is currently trading at 109 time earnings. If the company were to grow earnings 25% a year for the next 10 years, it would be able to earn about $6/share and the stock would currently trade at 12 times 2021 earnings...and that's without doing any present value calculations on those earnings.
25% growth for a high flyer is always possible. Just keep in mind, though, that according to the company itself, it currently has 50% of the entire US market as its customer base. A growth rate of 25% annually implies 6 fold growth in 10 years. That's an issue when the opportunity they have within the market is only double and that assumes a 100% penetration rate. So either the number of reservation taking restaurants magically grows 6 fold in 10 years in the US or this stock is extremely overvalued.
good analysis tof.
ReplyDeletehey Mark - holding AEE, BTX, TRE, and PIP in my spec portfolio.
I'm worried about BAC, govt would never let them fail but I think there could be more shoes to drop...hopefully not for your sake!
All cash in accounts at the moment. Could kick myself for not buying more DGP and selling what I had too early, and not reloading on the pullback.
ReplyDeleteThat said, my RBY trade propelled my accounts well into new all time high territory. My wifes account is at an all time high, even though she has been pulling about 3% per month out on avg. My IRA is now at 27 times what I put into it. What used to be the "big account" but got devastated paying taxes is close to 6 digits again. My Tradestation account is well into all time high territory. And even the Thinkorswim account, which got killed when I stopped out on $5 mm of gold a month ago has recovered to a $22k profit YTD.
But even so, the opportunities lost really hurt mentally. I guess I need to keep plugging away at doing better.
Still waiting for panic to reload RBY large position. Expecting that early next week. If my hunch is correct, they will dilute by $150 to $250 mm, and that will tank the stock. Picking the bottom won't be easy, though. This is all just speculation on my part. I know nothing concrete, but its been 1 yr since last financing, and it will cost at least $150 mm to build the mine. Maybe they are waiting a bit to see if a suitor appears, to give that a chance, before going ahead with diluting and building?