Keep On Truckin'

My last post left off with open calls in both Yamana and Hasbro. Here are the latest results through the close of business today:

Yamana 7% in 9 days
Hasbro 23% in 2 days
Citigroup 3% in 2 days
Abbott 5% in 9 days
Nisource 19% in 4 days
JoAnn Stores 23% in 10 days
Southwest Airlines 17% in 5 days
Columbia Sportswear 38% in 3 days
Talisman Bought 10 Jan 12.5 calls today for 3.20 -open-

Average of 16.1% per 5.3 days

Stay the course.

On a Roll

Hi diddly dew neyborhinos! Another sigh of disbelief, as my last posting was on almost 7 months ago. Where to begin? Of course! Within days of beginning my last strategy, the "mortgage crisis" reared it's ugly head and National City said aloha to it's price channel of the previous year and a half and has steadily regressed from $35 to $25 per share. Whoops! I'm still holding on for the long term. More importantly, I wen over the chart and identified the signal that foreshadowed this drop. I have since been studying and hunting for more such signals on charts ranging from weekly to minute-by-minute timeframes. Because of the hole I'd dug with NCC, I wasn't about to sell out at a loss to test another of my hypotheses. Instead, I've studied past charts and tried predicting price movements, analyzing mistakes, identifying where I'd gone wrong, and honed my skills. I finally had some capital to work with beginning September 17. Here are the results thus far:

Sept 20 Bought 5 $35 Calls on SYY at $4.20 each
Sept 26 Sold at $4.90 each
6 days, $320 (excluding commission); 15%+

Sept 26 Bought 2 $50 Calls on UA at $11 each
Oct 1 Sold at $12.50 each
6 days, $275; 12%+

Oct 2 Bought 5 $35 Calls on PAYX at $6.10 each
Oct 5 Sold at $7.10 each
3 days, $470; 15%+

Still Open: 3 $5 Calls on AUY at 7.10 each - today's closing price: $12.11 (even) Bought Oct 1
8 $25 Calls on HAS at 4 each - today's closing price: $29.28 (+240) Bought Oct 8

Precise, focused and humble, I bought and sold most all of these at the right exact moment. Wish me luck!

Making new strides

Hey-doo there neighborinos! OK, so I'm on 'roids to get past this poison ivy outbreak. I'm a little nuts this week. I've been blaring the radio stuck in traffic at 6:30 every morning this week. But I'm not complaining about having the energy of my younger years back albeit for a brief while! Anyway, I've been thinking about my plans. I'm not nuts enough to scratch them, but I've had a voracious appetite for working up charts the last few days.
Here are my thoughts:
I looked at a lot of oil stocks today. Exploration, production, servicing, refining. I couldn't find one that had much more upward potential. This move has been made and is already out of breath. Tops are being revisited on low volume. The OIH needs Friday's volume to exceed 20 million or so - roughly doubling it's volume for the week so far - to even touch the last three weeks totals. Why is gas at the pumps so ridiculous? Because the gas retailers know they' d better get what they can while the gettin's good. Oil is heading south. It's lost it's mojo. Barring any extraordinary circumstances re: 'geopolitical stability'.
I like the materials. Particularly the bling. I find the diversification of BHP and AAUK to be quite interesting. I like AAUK's chart - even more if it holds near 28. There's a mad dash to plunder the earth for all she's got to supply civilization's extreme makeover. Gold, copper, aluminum, iron, coal... diamonds, platinum, uranium. Get it while you can!
But before all that, me must begin at the beginning. We need capital to invest. Or at least I need more. I want so bad to be greedy, but in a great way. I want enough money that if I see an investment to be had - a small time player with a great niche and a wide moat and a great reputation for quality, I can just buy up shares to my hearts content. And I like a lot of stories. But that's for a later time.
Here's my plan: Phase One: Low risk capital accumulation.
I' following a handful of stocks that do absolutely NOTHING but run in place and have a relative history of driving in their lanes. First Horizon. National City. TCF Financial. Three banks ranging in size from $3.5-20B in market cap, with PEs no higher than 16 and yields no lower than 3.5%. Here's a chart of one year of closing prices. Generally 5-10% compounded monthly without too much uniformity - ie, when one is up, one is down, and the third is somewhere in between. Getting in and out might keep me busy, but I'd like to think it's worth it. I'll let you know how it goes. Until then,

Being smart - or at least thinking you are - can have it's disadvantages. In my case, I've developed the capacity to assume I was right at every level of analysis. In trying to decipher the movement of prices before the move is made, I've found meaning in the simpler signs and symptoms of a company's stock valuation - being able to identify strength and conviction, and therefore supply and demand - as a measure of the moment. A moment is an indefinitely short but precise point in time. On Wall St., this length of time has been shortened from months to minutes. The trading of these 'pieces of paper' has turned them into just that. Every stockholder is now there own middleman. Unfortunately, most everyone is now playing the same hand of cards, each trying to convince themselves that they are right. In fact very few will win. That's why I believe it's imperative to keep it simple, use common sense, and not overanalyze. Just for the fun of it, I have a tendency to listen to the radio trading shows on the AM dial. I listen on the way to and from work. And I hear the same stocks mentioned on very show day after day after day after day. They're always the flavor of the month with the huge volumes, and people are worried about when to get in and out to make the most money on a $15 stock gyrating $0.20 in a day. I always wonder what beautiful beach these billionaires are sunning themselves on when they call the show - nevermind the talk show theorists! Are they being fed grapes while doing the show? I believe most any strategy will make you some amount of money in due time so long as you have a half a brain. I used to do some research on every stock I ever heard mentioned anywhere. But if a guy like me is getting the word of mouth, the moment has passed. If I'd never heard about a company from my own experiences, I'd never would've known about it in the first place!
The three pillars of my universe lay in innovation, exclusivity, and sustainability. If a company has none of these attributes, the buck stops there. I've focused on the industries that I know best and on the companies that have or will have some impact on my life. I'll introduce them to you next time. Don't worry - it won't be another three months. In the meantime, I'm continuing my strategy to be patient and follow my convictions. Eventually I will build large positions in each of the stocks to be mentioned next time, each at precisely the right moment - when they're on sale! Until then...

Track My Picks

Now you can track my picks just like you can with Cramer and Jubak in the Motley Fool's CAPS game. The link is available in the links column to the right for future reference. My picks are usually there first, before I get a chance to blog about my rationale later. So far so good... except for MWRK and PWAV - my two worst losers ever. If only I had a thousand shares of each stock I've nailed!!

Jerry Chistmas and a Happy Bob Weir

"I've changed my ways just a bit since I lance posted here. Not so much for new year resolutions, just a refinement of my tactics. I have become more patient. Case in point: almost giving in to the pain of buying MWRK at $44 and watching it sink down to $38. I felt the pain, but held on to my convictions relating to both the fundamentals (see my previous posts) as well as the technicals. I learned from my CNX debacle that it's not a good idea to sell when the stochastics, RSI, and the WilliamsR are bottoming simultaneously. Subsequently, MWRK rallied back up over $42 on Friday on an analyst upgrade, thereby cutting my losses by a third. I'll see how it plays out in the next couple of weeks, as the action shored up some longer term technical support I was looking for. I also think Powerwave is ready to take off. My analysis shows a confirmed bottom, and the stock has been building strength for several months and has shown some signs of life in the last couple of weeks. I am losing my patience with Carter's Inc. though. It will either find support at current levels or drop down to retest the low $20s. Technically it can go either way, so I'll have to watch it very carefully. Otherwise I'll take my loss (bought at $28) and move on. It's my own fault. A bottom has not been confirmed and the business model is unexciting. I think Children's Place has better clothes for older kids - brighter colors, hipper styles - but Carter's dominates retail children's departments, especially the newborn segment. Both are strong brands, but they seem susceptible to competition - especially Children's Place, what with Old Navy and Gap Kids. I haven't studied the balance sheets too hard (OK, not at all) but I think either Carter's or MWRK could be a takeover target eventually. I think MWRK has the opportunity to expand globally as well. OK, I also bought some Ford. Another tremendous brand. Right after I did we found out that Mullaly went to Japan to talk to Toyota. I could think of some synergies - specifically: Ford needs to get some fuel efficient technology into their vehicles (Hello Toyota!), but more importantly, Toyota needs to expand capacity to meet growing demand, and Ford has lots and lots of manpower and manufacturing resources in need of work. A turnaround play, but the fact Bill Ford had the meatballs to swallow his pride and find a better person for the job than himself shows the commitment to making the right moves."

I wrote that January 6 of this year. I've come to learn (read: understand) more and more. I've done lots and lots of technical research and honed my skills... hasn't helped me with PWAV, though. Still holding on at a loss... want my money back! (Rule No. 1 - Don't lose money; Rule #2 - See Rule No. 1) Building strength a lot slower than I thought. Had the right idea getting out of CRI and especially MWRK when I did. It really does come down to basics.

Buy what you know; companies you know, preferably companies you know are doing good business. Buy them, but buy them when they're cheap. Dividends are acceptable. So I bought Pfizer.

Once I get my money out of PWAV, I'm eyeing these stocks:
CSCO D ED GE LTD NI NST SAM SOV
Pickings are slim here, but these are poised for a strong 2007 - technically speaking. Will have to share my ideas... if they work and I'm rich someday.

Ciao for now.