3SOF

Time to go long, which I did today.  Way too much pessimism and all the talking heads keep pushing healthcare, utilities, and consumer staples (since when have they ever been right on market direction?  They only call what has happened, not what will happen!!).  If the market gets 1 piece of good news (surprise rate cut), it will fly.

Interesting read from Yahoo MB on the QQQQ's, I have this bad feeling about the markets in the U.S. and eventually abroad, the same feeling I had in Dec. 1999, but for different reasons.  I know David is investing for the long term, but Cash is king sometimes.  I may miss a bounce on a Fed cut, but for know I'm out of the market with a good return for the year.  (I just want to preserve my capital)  Will wait for the clouds to clear for a jump back in, it's going to have to be a "I know that I know revelation when I re-invest."  I will still subscribe to 3stocks, because David is one of the best and I respect his views.  GLTA, cheers, Ellen

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TRUTH SERUM: 2008     24-Dec-07 02:58 pm   
Don't be delusional...

- If real estate and related garbage accounted for ~30-40% GDP growth in the last five years is smelling like shit it is bound to have ramifications that are going to be painful...

- If financials at ~20% to 25% of S&P 500 are getting destroyed by real estate and related derivatives kryptonite it is bound to squeeze the shit out of the American Eagle in every quarter as credit contraction takes hold...

- If corporates are at the peak of their profits and that the business cycle is tipping downwards, cheap talk on valuations being cheap is nothing but intellectual prostitution.

- If consumers at ~72% of GDP is with zero savings and loaded to gills with debt, and the housing ATM machine away, and job outlook weakening by the minute are hurting despite forced smiles at Christmas dinner tables it is bound to bound to destroy the lazy and zero IQ society that USA has become.

- If corporate balance sheets - are being destroyed as in the case of financials; - are being frivoulsly used to repurchase stock to offset generous options dilution as in the case of technology companies; - are being used to dole out generous dividends in the case of consumer companies; - are being used to fund expensive new drugs/new fabs with nothing much to show in the case of drug /semiconductor companies; and being used as a source of cash to meet working capital obligations in most cases in the face of credit contraction; it shows there is no hope for stability, and little faith in profitable growth.

- If credit markets are in a deep freeze, consuming anti-freeze in terms of Arab, Chinese, Singaporean, or local funding on onerous terms is not going to cure the loss of trust in corporate balance sheets that are laden with toxic garbage.

- Fraud Engineering Department (FED) can accept garbage as collateral but it is garbage on it books at the end of the day; ECB can inject $0.5 trillion in ready credit but LIBOR knows it is liuidity/credit is not the issue. Cost of capital can be addressed in with various capital structures, but cost of garbage and price for garbage always ZERO!

- If stock market on its most logical day has an IQ of 70, there is no ned to analyze it logically to the nth degree but trade the hell out of it based on the magic show being enacted.

- If stock market participants look so glum to you at just a few percentage points of the peak of many indices, imaginw waht it would be likw when the indices and their components are off 30% or greater?

Enjoy your Christmas dinner, for I will assure you that truth serum will enter your blood stream and your brain cells shortly afterwards...

looks like business is good, we'll see come Monday
http://moulddiemaking-in.blogspot.com/2007/05/going-lean-cuts-tool-delivery-time-by.html

David, I am curiuos about JSDA.  I realize it's valuation is high for current earnings, however, it has gone from 2% to 25% market penetration in a contract with a national distributor (FIZ) and when JSDA announces earnings on March 8th, they will also announce new retail stores that are selling their products.  On yahoo message boards, they have been spotted in Costco, Wal-mart, Target, Krogers, Publix, Smith's, Albertson's and a few other grocery stores that I can't recall.  Before Dec. 31 they had an exclusive contract with Target and now have new contract with bev. distributor.  They sell soda (multiple flavors in regular, diet and the new pure cane sugar, and also have organic drinks, teas and energy drinks)  Cramer tauted them as the next HANS back in Dec.  I know Setravis has held JSDA for a while.  What is your opinion of JSDA?  Is there really a 10 fold potential with the PPS/market cap. in the next 2 years?  Thanks in advance.  Elliemae   

David,
   
The way I see it as a provider, WCG is like the audit police for the government.  They receive a premium per membership, and the provider's must request authorized visits/treatments for the patient.  Basically, as a provider, you have to jump through hoops to get authorization/paid.  However, the waste in health care has been rampant and this service protects/polices all parties involved in the care of the patient (provider/patient/government payee, tax payers).  I know this sounds cynical, but the truth is the truth.  Anyways, WCG and companies of this type will be utilized to save the government money in all areas, because fees are already stripped down for medicaid/medicare reimbursement and providers won't take anymore cuts.  For a 1 hour P.T. visit, Medicaid pays $85.00, and now that you have to go through a CMO like WCG, you still get $85.00 for a 1hr. visit (unless you are not an authorized provider, then you get 10% less for authorized services $76.50)
The real savings for the government comes in when a treatment/procedure is deemed not medically necessary and is not authorized.  I also forgot the paperwork trail that encompasses the process to get authorized visits, or extended visits (makes a provider think twice about visits/treatments needed)
I remember about 10 years ago there was a Psychiatrist in Atlanta, Ga. that would round Medicad children up on buses with parental consent for CAMP and would charge Medicaid for psychiatric eval./treatment and made over $2 million in 1 year.  When this was brought to the news media, Medicaid's response was it was unethical but not illegal!!  Well, this isn't going to happen with CMO's

WCG just keeps hitting the ball out of the park with earnings and membership enrollment.  WCG won't double overnight, but look back in 14 months and it will!!  Patience will be rewarded

WCG always retraces some when healthcare cuts are in the media, however, WCG is not like the UNH's and WLP's that supply individuals bare bones healthcare to self payors that want minimum coverage, WCG has relationships/contracts with State funded and federal programs like Medicaid and Medicare.  WCG is growing!!  Don't listen to the noise, buy low and buy lower if you have to, because this will be a monster company in the long run.  

I have not shorted a stock in quite some time, the psychology behind it can get you.  For me, when holding a shorted position, if that stock gaps up on news like NFLX, it is a whole lot harder to hold than when you are long on a stock and it gaps down on news.  I guess that's where the "short squeeze" arises from.  David, don't beat yourself up over this trade.  Every trade is a gamble, no matter how much charting and fundamental analysis is used.  If you have ever played craps,  The pass side of betting is a lot more fun than the don't pass side, but if you switch to pass from/to don't pass it will mentally wear on you and you'll walk away from the table scratching your head and licking you wounds.  If NFLX had closed at $26 today, you would probably feel like it was a good trade.  Sometimes, the  wins, but not always, so start a new tomorrow! Sunny days ahead.

Volume down a bit today
93% ownde by institutions....
I am assuming this is a good thing.  Cool
Although, I've read it is good to get into a stock before the institutions drive the price up.  Davids analysis really helps to see if there is more upside from here.
Best
GMan

I believe the institutions understand the potential growth of this company versus the average retail investor

Elliemae
Could it be WCG instead that is acquiring these Psychiatric Beds?

Not to my knowledge

For now, I think I'm gonna wait till it retraces to the 5EMA, like about $73.  The bollinger band squeeze play is over cuz it already made a red candle and failed to make a new high on Friday.  There's plenty of time till earnings (Feb. 12), so I would buy the Feb 70 call options after a 5 or 10EMA retracement and bounce.

Leaira is probably right, this stock has pulled back 3-10% on profit taking, etc.. just to resume back up, however, in the long term picture, timing an entry point could be futile.

I first became aware of WCG when my 21 year old son was in his junior year of college and had gone to a job fair in Nov. 2005 and had met a rep. from WCG.  My son was very impressed and told me to investigate the co. for investing (he graduates this spring with a B.B.A. in Actuarial Science and took a job with Property and Casualty instead of Health and Life, like WCG)  Anyways, I researched WCG and took a position in Nov.2005.  Well, I live in Atlanta, Georgia and I am a Physical Therapist that provides services to patients on Medicare, Medicaid, and private ins.  Beginning June of 2006, Georgia Medicaid required CMO's and 3 managed care co. were contracted (Amerigroup, Peachstate, and Wellcare/WCG)  Georgia Medicaid program has been financially strapped in the last 5 years and personally, an hour visit for a P.T. had gone from $107.00 in 2000 to $85.00 an hour in 2005.  Well, every sector of healthcare provided to Medicaid recipients had been cut as well.  In 2005, the state of Georgia had to come up with a plan to control/cut cost for their Medicaid members, and in all reality, no more cuts could be made to providers, for the payout was already at it's minimal amount that would support healthcare providers and still make a profit (in some cases break even for doctors/hospitals)  So Georgia Medicaid has implemented the managed healthcare cos. (which WCG is across the state of Georgia, not just in selected regions like Amerigroup and Peachstate)  This is saving Georgia's Medicaid system millions of dollars per year.  It helps prevent hospital visits and keeps providers accountable for services provided.  Prior to this implementation, Medicaid providers were virtually unsupervised.  If 2 one hour therapy sessions a week were allowed for a child, an unethical provider could provide services to a disabled child for years, as long as they kept a doctors prescription on file every 6 months.  Now with the CMO's in place, each provider has to get authorized for a limit # of visits and then provide documentation to support future visits that are medically necessary .  This is just one area of healthcare given as an example here, but it applies across the board to all Medicaid providers.  Now, If WCG is only in 8 states and has the potential to expand across the country as other states try to curb their healthcare cost, and now put Medicare into the mix (and you know as the baby boomers age Medicare becomes more strained)  I believe WCG will be utilized for Medicare exponentially in the future (because again, you can only cut payment to healthcare providers so much, and then you have to look for new ways to save money)  I know this was long, but I hope I opened some eyes as to the powder keg WCG is becoming.  Take a look at  WLP and I believe the market cap of WCG could be 68 billion in 7-8 years easily

It is a holiday today, however, I am working and will try to update some info. on WCG later tonight when I have time.  Have a great day!

David,

Thank you for your thorough analysis on WCG.  I have been a believer in WCG since I bought it back in 2005.  If you can block out the market noise, WCG will be a huge winner in the future.  If the govt. cuts medicaid and medicare in the future, WCG still wins, because the govt. utilizes companies like WCG to help cut/control costs.  If memory serves me correctly, WCG has only been utilized in 8 states to date and has huge growth potential.   
Thanks Again, Ellen

Something is up with this stock, up big again PM with no news

Ready to run again, up a $1.30 pre-market

Can someone enlighten me as to why this stock is worth  $12.30 PPS and guidance for full year 2007 is .12 earnings?  I realize Cramer pumped the stock a week ago when in the 10's and stated, "It's still in the growth stage and could be the next HANS, and has 2-3 years more on the growth Cycle and earnings will double in the next year"  (summary)  Well, that's true, but going from .06 to .12 is hardly enough to justify current valuation, or am I missing something?  Please, anyone, what am I missing?  Thanks in advance