Boatguy brought CUBA to my attention on the Members Corner (I want to save him money with this recommendation). This isn't a stock of a company, it is a closed end fund.
It invests close to 100% of the money in common shares, and it is worth exactly the value of those common shares. The aggregate value of the fund's common shares is $8.97 per CUBA share, as published on the company's website (http://www.herzfeld.com/favorite.htm).
Of course that over the years the stock has traded around the Net Asset Value, with extremely low liquidity. But recently, with this hype around political changes in CUBA, several misinformed investors are buying the "stock" because its ticker symbol is CUBA and on their profile it says they invest in companies of the Caribbean.
Yes, they do, and those companies shares are currently worth $8.97 per CUBA share, not $16.07 (CUBA's yesterday closing price).
Moreover, the fund has 70% of its capital invested in US and Mexican stocks (read this (http://www.herzfeld.com/AnnualRpt6-30-06.pdf)). 0% in Cuba, of course.
The stock is also rising because of this: The Herzfeld Caribbean Basin Fund, Inc. Declares $1.00 Per Share Year-End Distribution and Establishes Dividend Reinvestment Plan (http://finance.yahoo.com/q?s=cuba)
Of course, the stock will go down about $1 on the ex-dividend date, which is December 13, 2006.
So, the stock is trading at $16.07 but its objective intrinsic value is $8.97. I see a 40%, zero risk profit on a short sale at current levels.
This won't be easy to short, but since it has made good volume over the last month, it's possible your broker has some shares to lend. Probably you'll need to call them.
The trading plan is:
Short CUBA between $15 and $16 and hold to close below $10. 6.66% of capital if possible, it's a sure thing.
Hi Dave,
I never did get in this stock, just watching ;)
Although if I had bought when I first posted it on August 1 I would already have more than doubled my money and would have already sold most if not all by now.
I did however do some DD and think most investors in the fund realize that the fund invests in companies likely to increase if and when the US lifts the embargo on Cuba and certainly investors in the US know the fund owns nothing in Cuba as it is illegal to invest US funds there. Cruise lines, construction and the other stocks in the fund are mostly solid stocks in their own right and worthy even without access to Cuba.
Good luck with your trade Dave and thanks for the warning, although if Castro dies today I would cover asap ;D
QuoteCruise lines, construction and the other stocks in the fund are mostly solid stocks in their own right and worthy even without access to Cuba.
I agree, they're worthy. They're worth $8.97 per CUBA share, today (at market prices, not some valuation. These are stock prices traded on stock exchanges). They're not worth $16.07 per CUBA share. Hence the arbitrage play.
To be correctly made, one should buy all the stocks in the fund in the right proportions and sell CUBA shares. That would turn the risk into exactly zero.
This way there's some timing risk but the certainty that the stock will be trading below $10 in no more than a month, because these arbitrage plays usually don't last long.
QuoteGood luck with your trade Dave and thanks for the warning, although if Castro dies today I would cover asap ;D
I would short more ASAP ;D.
QuoteAlthough if I had bought when I first posted it on August 1 I would already have more than doubled my money and would have already sold most if not all by now.
Yes, you would have been lucky to profit from a greater fool experience (no offense). I'm glad you don't own any, good luck on your trades :)
Hi David,
I have a question??
So, when you BUY a closed-end fund, you want to purchase below its NAV return to make it a good investment????
Is this whay you are confident CUBA will come back to at nav $8.96??????? (sorry for the confusion) ???
http://closed-endfunds.com/FundSelector/FundDetail.fs?ID=4842
thanks
rafael
QuoteSo, when you BUY a closed-end fund, you want to purchase below its NAV return to make it a good investment?Huh
No, you don't need to buy it at discount, you profit if the funds holdings appreciate with time. The stock tracks the value of the funds holdings, it's like an ETF, do you know SPY for the S&P500 or QQQQ for the Nasdaq 100?
CUBA is more or less the same thing. The only problem is it is trading with a 79% premium, due to market inefficiencies and low liquidity.
If you're able to short it tell me later.
IB don't allow to short CUBA (maybe IB is having an affair with Castro) >:D
Good luck for all that can short it.
David
You mentioned
it's like an ETF, do you know SPY for the S&P500 or QQQQ for the Nasdaq 100?
By the way at this moment would you recommend DXD and QID which are inverse ??
THX in advance
I like the QID chart it looks like its bottomed and is ready to rebound (market ready to go down).
QuoteBy the way at this moment would you recommend DXD and QID which are inverse ??
Those are interesting instruments for sometime in the future, thanks for showing them to me. At this moment no, we're in a Bull Market !
Quote from: nullzero on December 07, 2006, 01:56:33 PM
I like the QID chart it looks like its bottomed and is ready to rebound (market ready to go down).
Hi nullzero, I wouldn't try to pick up a top on this market (or in any market). The trend is your friend.
You dont think sediment can change very fast over the next 3 weeks going into January 1st? From what I hear from many other traders and analyst is we should see the market get some sense knocked into it after the holiday season. Heh just bought some QID the about 10 mins ago and im up .50% so far. I think the time is coming for the market to pullback at least a little.
EDIT
On another note the vix index is up over 6% today and just passed over the 50dma recently. The techincals of the vix index look like its positioned to break out. I will post under stock market talking with the chart and maybe we can have dicussion about the market over there.
Quote from: nullzero on December 07, 2006, 02:09:29 PM
You dont think sediment can change very fast over the next 3 weeks going into January 1st? From what I hear from many other traders and analyst is we should see the market get some sense knocked into it after the holiday season. Heh just bought some QID the about 10 mins ago and im up .50% so far. I think the time is coming for the market to pullback at least a little.
Good luck nullzero :)
I'm trying to stop betting on small fluctuations and stay with the big swing. Because betting on fluctuations will never make me rich. I've tried that for too long.
Man, if I can make 50% a year I'll be the richest man on earth 30 years from now. I don't need 50% a month. Trying to get, say, 20 or 30% a month was what made me make much less money than I ought to, given how right I was in the market.
I won't have 30 years in front of me forever, so I better start doing the right thing ... You know what I mean :)
Yeah I know what you mean. I am just worried holding many things long these day because of the problems we face ahead; Weak dollar, housing bubble burst, losing the war in iraq and iraq turning into a proxy iranian state (which would lead to an oil crisis.) I can go on maybe its just me and im to negative but I feel that the perfect storm is brewing for a major recession and stock market pullback in the next year.
Quote from: nullzero on December 07, 2006, 02:36:23 PM
Yeah I know what you mean. I am just worried holding many things long these day because of the problems we face ahead; Weak dollar, housing bubble burst, losing the war in iraq and iraq turning into a proxy iranian state (which would lead to an oil crisis.) I can go on maybe its just me and im to negative but I feel that the perfect storm is brewing for a major recession and stock market pullback in the next year.
Ok, this deserves a new thread, perhaps on the Members Corner? I'll open one there, it's been some time since I looked at my favourite general market indicators.
Yeah that sounds a good general market analysis thread would be a nice place for this. Some dicussing on Dow, Nas, S&P500, VIX, Dollar, Oil, Gold, and other economic indicators would be a big help to the 3stocks community.
Ok, I was able to short CUBA, but if I don't get at least three answers from people saying they were able to short it, I'll take that trade out of the 3 Stocks Portfolio.
Everybody has to be able to follow the strategy for the results to be fair. That's the way I see this service.
Anyway, if you read this thread carefully, you know that a closed-end fund or a portfolio company are always valued at the Net Asset Value per share of the company. Don't expect to find arbitrage opportunities on liquid stocks. This is a one time event.
I was able to short it thru Scottrade.
I was also able to short thru Scottrade.
Interactive Brokers do not allow to short it :-(
Neither Ameritrade nor E*Trade had stocks available for short sale yesterday, and the price is too low today to even try it again. I'm afraid I have to sit this one out.
Maestro
I tried a short sell order anyway just now but both of my brokers still have the stock not available for short sell. Too bad.
--
Maestro
Quote from: David Randolph on December 07, 2006, 02:02:38 PM
QuoteBy the way at this moment would you recommend DXD and QID which are inverse ??
Those are interesting instruments for sometime in the future, thanks for showing them to me. At this moment no, we're in a Bull Market !
David here are some more to keep in mind in case the bull should suddenly die;
Short QQQ PSQ
Short S&P500 SH
Short Dow30 DOG
Short MidCap400 MYY
The UltraShort ETF's are leveraged 200% and their movement should be twice the indices.
UltraShort QQQ QID
UltraShort S&P500 SDS
Ultrashort Dow30 DXD
UltraShort MidCap400 MZZ
These ProShares ETF's work the same way as a short position on the indices, the only difference being that to short, you would place a long order. For that reason, you can even be short in IRA's, or without a margin acoount, or if you are turned off to shorting individual stocks.
Thanks for your reports :)
It looks like at least 3 people were able to short CUBA, but the majority couldn't. So, although I recommend closing this trade around $9, I'll close it for the 3 Stocks on Fire Portfolio at, say, around $12.5.
This way the portfolio gets some benefit out of this analysis, but not all, since many people couldn't follow the recommendation, even though they wanted too.
Brokers like IB, Tradestation and alike are good for very short term traders and day traders, but for trading every stock you want, Scottrade seems to be the best.
The current Net Asset Value per CUBA share is $8.89 (http://www.herzfeld.com/favorite.htm). Usually the stock trades around the current Net Asset Value per share, with a little discount or a little premium, but never with a 76% premium like it's happening now.
Here's more information about closed end funds, provided by CUBA's website: What is a Closed-End Fund? (http://www.herzfeld.com/whatisa.htm)
So, my recommendation is for you to hold your shorts to close them around $9. For the 3 Stocks on Fire Portfolio purpose only I'll close the trade around $12.5.
(thanks for those powerful bear market instruments BigSully1)
gap is filled and ready to continue...
D O W N ! ! !
Quote from: 422fwhp on December 11, 2006, 07:44:48 PM
gap is filled and ready to continue...
D O W N ! ! !
I agree 422fwhp :)
I also think yesterday's rise was because it was the last day to get the $1 a share dividend:
«MIAMI--(BUSINESS WIRE)--The Board of Directors of The Herzfeld Caribbean Basin Fund, Inc. (Nasdaq Capital Market: CUBA) declared a year-end distribution from net long-term capital gains of $1.00 per share, payable on January 12, 2007 to
stockholders of record December 15, 2006.»
Today it is the ex-dividend date, so I expect CUBA to fall not just $1, but say, at least $2. We'll have to pay the dividend later. Then tell me how much you paid, and when, to compare with my own records.
I still recommend you to close CUBA short around $9, this is a sure thing. For the 3 SOF Portfolio purpose only I'll close the trade at $12.5.
No, the ex-dividend is tomorrow, so we may have some more pain today, as people buy/hold because of the dividend (in fact, they don't have a clue what they're doing).
I expect CUBA to go down $6 or $7 before the end of 2006.
I was totally freaking out yesterday as I watched CUBA go up 4.3%. It just killed me, because I'm sure I'm right on this one.
This is an important play for future strategic alternatives.
Because if I'm indeed right and this POS falls $7 before the end of the year to around $9, then I will know that anything is possible in terms of market inefficiencies, that is, people don't have the slightest clue of what they're doing with their money.
And if I'm wrong, that is, there's something so much hidden that I wasn't able to find it, then I'll consider that the market indeed always knows better, and if a chart is so damn bullish as CUBA's, I should never, ever, consider shorting it.
So, this play is a battle between reasonable fundamental analysis and technical analysis. The one that wins will see its weight on my overall analytical process raised.
But I maintain that yesterday's rise were fools buying because of the dividend. The ex-dividend date is today (http://www.sec.gov/answers/dividen.htm) (I'm sorry for the mistake on yesterday's update), since someone that buys today won't be a shareholder of record at December 15th and won't receive the $1 dividend.
More importantly, people that bought/hold because of the dividend, can sell today and they will still get the dividend. I see no further reason for CUBA to stand this tall, I believe it will fall so fast these suckers won't have time to breathe chasing it down.
Or else I'm the sucker and they're right. We'll see ...
CUBA was driving me nuts but finally it is starting to go down as it should. Selling this stock is almost a patriotic act, to punish ignorant investors (well, let it fall down hard first before calling them ignorant - or else I'll be the fool here).
Later I need to correct my selling price $1 lower on the 3 Stocks on Fire Portfolio, because I'll need to pay the dividend, I'll do that after the open, really short on time now.
The recommendation is for you to keep holding to those shorts if you have them.
I didn't know the following was about to happen, but I'm glad that it did:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=30269;image)
CUBA's net asset value declined by $1 because of the dividend distribution. The distribution was made with money from selling shares of the fund, of course !
Let CUBA go down some more, then I'll put my selling price $1 lower since I'll have to pay $1 for every share held.
The trading plan changes to: Buy to cover CUBA around $8.
It's amazing how a rounding top takes time to develop, even when a stock is so obviously overvalued as CUBA is.
I guess that's because, even when shorts are 100% right, they are always shaking and fearing a big rally will wipe their equity (it's a legitimate fear, CUBA was already insanely valued at $12).
I don't know if you fully understand this play of mine (perhaps you need to read this whole thread), but CUBA is like an investment fund, but if you go to the bank to subscribe it, you pay 85% more than the market value of the fund's current holdings :o
I've never seen an inefficiency like this. Why is this possible? I guess because nobody held CUBA's shares before this Castro issue, everybody held the closed end investment fund since the beginning. So when misinformed investor's wanted to buy, there wasn't anybody to sell, hence the share price surge.
Of course, over time, CUBA shares need to come back down to it's fair value, which is the Net Asset Value per Cuba share of the closed end fund. Yesterday that value was $8.02.
In fact I'm going to write an e-mail to the company, saying I would like to buy shares of their fund for the long term, but with this premium ... just to see if they tip something.
Then I'll let you now, the trading plan continues to be "buy to cover CUBA around $8" (for the 3 Stocks on Fire Portfolio purpose I'll close the trade at $12.5, as I've explained before).
I received an e-mail from CUBA, here it is:
«The net asset value is $8.01 as of Friday's close. The Fund was ex- a $1.00 per share year-end long-term capital gain distribution on Wednesday, 12/13, record date 12/15, payable 1/12/07.
All news and reports are posted on our website at www.herzfeld.com under Herzfeld/Cuba.
Sincerely,
Cecilia Gondor»
So, Cecilia refused to explain why in the hell the share price of CUBA closed yesterday at $14.9 when the Net Asset Value of the fund it represents is $8.02. She can't explain, and I can't either. The only explanation I find is: the market is inefficient. The stock was so illiquid that it went up as people bought the name "CUBA" and the profile of "makes investments in the Caribbean", without knowing that this is a closed-end fund !
I was expecting this for some time, and on Friday the President of the company sold 18,721 of his 50,945 shares. I bet he'll sell them all, because his fund won't get to this around $15 a share value in several years to come ;)
The plan continues to be: buy to cover CUBA around $8 (for the 3 SOF Portfolio purpose only I'll close this trade at $12.5 as I've explained earlier on this thread).
Volume is coming down, so speculative momentum players will start leaving for the exit. They will soon find out that, besides them, nobody wants to buy these shares above $8 and the stock will definitely crater.
My recommendation continues to be: buy to cover CUBA shorts around $8 (yesterday's net asset value was $7.97).
Nothing new on CUBA, the current net asset value is $7.92, the plan is to close this short around $8.
CUBA's volume is drying to almost zero. Suddenly this stock will be down 20 or 30% in one day, at least that's my expectation. I wish CUBA had a message board where I could write an article on it, so that misinformed investors buying the stock could see the truth.
I know how you technical guys don't even read what I've been writing on this thread. My view is your mind is closed to new ideas about the market.
The plan continues to be, hold CUBA short until the stock goes down to its market value of, let me see today, $7.90.
CUBA is the strangest inefficiency I've ever seen on this market. I really can't explain why the stock doesn't collapse. I'm pretty sure that it will, but why the wait?
Imagine that 16 years ago people were always complaining because closed end funds always traded at a discount. Thomas Herzfeld, CUBA's president, used to make a living selling shares of the funds holdings short and buying the closed end funds at a discount, making the arbitrage play we're doing on CUBA, but in inverse:
Quote
But surely, no matter what other objectives an investor has, making money has to be near the top. What about arbitrage? Can't someone buy shares in a deeply discounted fund, then sell stocks equivalent to the fund's holdings and lock in a profit?
"That's what I do for a living," Mr. Herzfeld answered.
Now he's selling CUBA shares, as you can see on his latest transaction on December 13th: CUBA Insider Transactions (http://finance.yahoo.com/q/it?s=CUBA)
These shares are trading at a premium of 90% to the underlying fund's Net Asset Value, it's incredible.
Here's an interesting article about closed end funds valuation: Closed-End Funds: Accounting for the Discount (http://www.iht.com/articles/1992/03/28/clos.php)
Now Herzfeld's business address is a PO box.
In November, Herzfeld held a shareholder meeting at an undisclosed location. It lasted 4 minutes, 22 seconds.
HERZFELD: Is there any business to come before the meeting?
SECRETARY: Chairman, there is none.
BOARD MEMBER: I'm from Florida. I demand a recount.
No shareholders showed up to the annual meeting. Not because they fear being targeted. Herzfeld doesn't get threats anymore. Shareholders didn't show up because they don't have much to complain about.
Over the past 12 years, the fund's share price has climbed 80 percent. And a search by Bloomberg News ranked the Herzfeld fund number two in the world for Latin America over the month of November.
Washington slapped an embargo on Cuba in 1963, when Castro started nationalizing U.S. companies. Nearly four decades later, the embargo is still in place, and may even outlast Castro.
So how has Herzfeld managed to make money?
HERZFELD: We wanted to pick companies which we thought would do well, even if there was no change relating to the embargo. And those companies have done very well indeed.
The Herzfeld fund trades as CUBA on the Nasdaq. It's relatively small, with just $14 million in holdings. But it turns out new investors are dying to get a piece of the action. Herzfeld's turned away half a billion dollars in additional financing.
He does this even though managing more money would bring him hundreds of thousands of dollars in additional fees.
HERZFELD: It's more about excellence than fees. We want to get it right. The more money an investment manager has to manage, the more difficult it is for him. You become a bull in a china shop if you get too large.
Cecilia Gondor has worked with Herzfeld for 23 years.
CECILIA GONDOR: Tom is a quiet genius.
She says he carefully researches every move he makes.
GONDOR: He always can go right to that heart of the matter and say this is where the emphasis has to be.
The Herzfeld fund began trading in 1994, on May 20th — Cuban Independence Day — with an appropriate initial value of $5.20. It hit a record $9.50 after Castro went to the hospital with an intestinal ailment in August.
GONDOR: What surprised me is that we've had to wait so long. When we started the fund, we though it'd be a few years. But it's been a long time.
Herzfeld, in financial parlance, continues to go long with his investments. He's says he's prepared to keep waiting.
Lol, it was the best fund because the stock is insanely trading at a premium when compared with the fund's Net Asset Value.
CUBA = $14.92. Yesterday's Net Asset Value of the fund = $7.93
(as can be seen on the company's website: http://www.herzfeld.com/favorite.htm)
Moreover the fund has 99.9% of its money in common shares, of course none of them in Cuba because there's no stock exchange there. 76% of the funds holdings are US and Mexican stocks, as can be read here:
http://www.herzfeld.com/AnnualRpt6-30-06.pdf
I don't know what can I do to make this POS go down to its fair value (which should be trading at a discount, that is, at about $7.50). Probably, just wait ...
Thanks for the article yukiii, applaud :)
David
Take a look at
Cornerstone Total Return CRF
premium is 85%
Quote from: yukiii on December 22, 2006, 03:35:24 PM
David
Take a look at
Cornerstone Total Return CRF
premium is 85%
Yes, that's another that should be sold short. There people are attracted by the monthly distributions, but of course those distributions reduce the Net Asset Value, so bulls don't know what they're doing. Since the stock is so thinly traded, it is possible that it goes up just because misinformed investors are buying and nobody is selling, because 98 or 99% of the investors in the fund bought on the original launch, not in the open market, so they don't have any shares to sell.
Anyway, with some time these things will naturally trade at the Net Asset Value per share (even at a discount, which is the historical norm), as you can read on this article from thestreet.com: April Sours for Many Closed-End Funds (http://www.thestreet.com/_yahoo/funds/mutualfundmonday/10284024.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA)
The plan continues to be: be patient and buy to cover CUBA only around its net asset value, which on Thursday's close was $7.92.
As I've been saying on this thread, CUBA was making me nuts. I could never understand why this closed end fund was trading with a premium of 80 or 90% relative to the fund's net asset value. I talked to everybody I knew, e-mailed the company and nobody could explain the current overvaluation (nobody except the chart, of course). I felt betrayed when the stock didn't went down on the ex-dividend date (the fat dividend was one of my explanations for the bullish technical picture, the publics ignorance on dividends and their effect on stock prices).
That was the first sign that I was wrong, but still, I always thought it was just a matter of time for the stock to adjust to its intrinsic value (intrinsic value given by the market value of the securities held by the fund).
It's funny the unexpected ways we sometimes learn new things in the market. Imagine that I finally understood what was happening with CUBA when I was studying MAMA :o
You say: «How can that be possible? Tell us, closed end funds are valued at their net asset value and CUBA's net asset value currently is $7.92, right?»
Right.
«The funds holdings are mostly US and Mexican mid and large cap companies? The fund is diversified through more than 100 different holdings, right?»
Absolutely.
«Then how come the fund's total holdings are worth just $13.3 M and the market cap of the stock is $26.43 M, roughly double?»
As I studied MAMA, I understood how the market always looks into the future. MAMA's financial statements show a dismal picture, yet I believe the stock is worth maybe ten times its current market cap.
I never thought of that when considering CUBA, because I thought that the funds current holdings already reflect their future value, so it doesn't make any sense to trade the stock at such a huge premium. But, this is a fund that invests in stocks, and today's holdings don't necessarily have to be tomorrow's holdings. I guess the market is looking way ahead into the future, thinking that if Cuba's communist regime goes down after Castro's probable death, the fund will invest a significant part of its money in Cuba.
So, perhaps investors aren't crazy or misinformed as I thought (well, some of them are, since they don't even know CUBA represents a closed end fund), they just want to access the possibility of being early birds in Cuba's market. The only way to buy this closed end fund is by buying CUBA's shares.
I'm losing 1.4% on this trade, plus the $1 a share that I'll have to pay as dividends (so I'm losing 7.3%). Not all that much for this tuition fee, considering the lesson learned, which was:
- The market always knows better
Tomorrow I'll buy to cover CUBA.
Quote from: David Randolph on December 26, 2006, 04:51:06 PM
Not all that much for this tuition fee, considering the lesson learned, which was:
- The market always knows better
David, gotta applaud you for going that extra length to understand why CUBA ain't doing what you'd been expecting. But here's where your conclusion gets to me:
1.) How much time does one give him/herself before you realize there might have been a mistake in the initial analysis and thus close your position? (lemme guess the answer to that question myself - until the trade edges close to hitting your money mgmt. rule or until you find the mistake in your inital analysis: whichever comes first??)
2.) My bigger issue is with that sentence of yours : The market always knows better.
I mean, if you apply that to every situation, then the whole world of "value investing" would come crashing down. If everyone out there assumes the market knows it all, there would be no point buying a stock "based on valuation", wouldn't you agree? Stocks like BFLY, SYX, MAMA, ONSM would all need to be scrapped because we could say..."the market always knows better"...point being, how much time would one give a stock to "prove it's valuation" based on one's study of the company''s fundamentals, before throwing in the towel and saying...the market knows better (not in anyway suggesting you threw the towel in on CUBA, so please don't misunderstand me on that) :)
I hope you understand what I'm trying to say in this post. :)
QuoteDavid, gotta applaud you for going that extra length to understand why CUBA ain't doing what you'd been expecting.
Didn't get any applause ;D
Quote1.) How much time does one give him/herself before you realize there might have been a mistake in the initial analysis and thus close your position? (lemme guess the answer to that question myself - until the trade edges close to hitting your money mgmt. rule or until you find the mistake in your initial analysis: whichever comes first??)
I don't know how much time. I update the initial analysis everyday and I keep the position for as long as the initial motives are still valid.
Quote2.) My bigger issue is with that sentence of yours : The market always knows better.
I mean, if you apply that to every situation, then the whole world of "value investing" would come crashing down. If everyone out there assumes the market knows it all, there would be no point buying a stock "based on valuation", wouldn't you agree? Stocks like BFLY, SYX, MAMA, ONSM would all need to be scrapped because we could say..."the market always knows better"...point being, how much time would one give a stock to "prove it's valuation" based on one's study of the company''s fundamentals, before throwing in the towel and saying...the market knows better (not in anyway suggesting you threw the towel in on CUBA, so please don't misunderstand me on that) :)
I did, I throw the towel when I have to like anybody else. I said "the market always knows better", I didn't say "the market knows it all", and there's a difference there.
Fundamental analysis is useful as a means of comparison and to have an expectation for future value. An expectation for the magnitude of the move.
Take AMKR as an example. I think the stock is worth $30 based on fundamental analysis. Yet, the stock is down 7% in December to $9.51. Why? I guess because it was up 48% in November. Although the trend is up, the stock doesn't go from one point to the other in a straight line. If I didn't knew the fundamentals, probably I would have sold on December's break (or in any break in any stock). The market always knows better, but you need to mix its message to fundamentals to know what the market is saying.
Another example, SYX. The stock was down 15% after I bought it, but I held, because I saw the fundamentals as very attractive and never changed my opinion (and technicals were still bullish, despite the 15% fall). Now I'm 21% ahead on the trade.
There's no time table to know, I keep investigating and thinking about the position. Sometimes I get more confident, given incoming information/analysis, and sometimes I see more than I saw the first time and I conclude that I was wrong. I may get out with a small profit or a small loss when that happens.
As always, the money is on the big swings, not in small fluctuations. Unfortunately, it isn't easy to find a stock that will make a big swing (it is a lot easier after the fact ;D)
Keep those questions coming, applaud :)
You got an excellent short entry here David, I think CUBA is due for a fall ;)
----> CUBA is been bullish for 12 weeks
--- > Bearish Rising Wedge Formation in play
Rising Wedge ;)
Well I'm a glutton for punishment so I'm still holding short.
Quote from: Terliso on January 03, 2007, 02:59:51 PM
You got an excellent short entry here David, I think CUBA is due for a fall ;)
----> CUBA is been bullish for 12 weeks
--- > Bearish Rising Wedge Formation in play
David, your CUBA is imploding....nice pick for a short, applause ;)
Finally! That's more like it. However, now comes the hard part...when to Buy to Cover?
Thoughts Terliso? I may just take my profit this a.m. and look more into WBTO
422fwhp- I hope you covered
CUBA is trading as if people beleive Castro has passed, he probably has.
CUBA just hit $17.50
Crazy
The stock that wont die >:D
Cuba after Castro will be interesting and will be a huge investment magnet, if the government allows US investment.
Chavez may have some influence on the events unfolding in the country. ;)