3SOF

Quote from: nullzero on February 27, 2007, 02:25:01 PM
Man the only stock I see on fire today is the QID. DOW looks like it may see -300 points today. NASD -100 points maybe... All from the Chinese and Greenspan. I think its time to short the market this is the change in tide I been watching. I was waiting for early summer to enter but this may be the turning point on the markets. David time to pick some shorts on fire for the portfolio?

I don't feel that way, but I must be honest and say I haven't been paying all the necessary attention to the general market. I guess this paradox had to be presented to me shortly, because I've been thinking about it and still didn't come up with a solution.

The thing is:

- Does one trust the specific company's fundamentals and if they're very attractive, hold it through good and bad times, through bull and bear markets?

Buffet would say yes, Livermore would say no.

- Or else, do you remain a bull for as long as it is a bull market, and therefore long stocks, and a bear for as long as it is a bear market, and therefore short stocks?

Buffet would never short a stock, Livermore would say yes.

Buffet is the most successful investor in stocks ever. Livermore killed himself after his fourth or fifth bankruptcy. You be the judge.

What do I have to say about this? Well, I guess I'm still too young to have a definitive answer (just turned 31, 11 years of stock market experience - most of it spent trading futures), but I'm loving to invest on the perspective of the business, and businesses don't shut doors when the market goes down. Several of them just keep growing.

It's an open debate.

Quote from: David Randolph on February 27, 2007, 02:29:43 PM

Quote from: lancefur on February 27, 2007, 02:13:54 PM
Man, I hate days like this. I didn't add to stocks I already held but I did buy GIGM at a low price and now that's even dropped further.

Stupid question really but I will toss it out there...why don't markets go up like this? Why do they only go down like this and then take a couple weeks or so to recover or longer?

They go up like this and more, in bear markets

Once I saw the Nasdaq up 14% in just one trading day, I believe it was the 3rd of January 2001, after the FED cut rates by 50 basis points by surprise when the market was open!

Me too, I hate days like these, when I looked to the Main and saw it down almost 4% on the day I felt like vomiting.

But then I remember some days where I lost 30 or 40% in one day, years ago when I played futures so I put things in perspective.

What I'm going to do is finish these analysis because that's my job and my life, I can't let the market interfere with the normal course of life, it can't! I suggest you do the same ... anyway, I've seen several big market breaks starting, and this doesn't feel like one, there wasn't enough optimism in the air prior to this, in fact, the media and the general sense of the public has been quite bearish lately. Not the right environment for a big crash, they always come as a surprise.

But a 5 or 10% correction? Unfortunately, it can happen ... good luck for us.

Strong hands here...almost lost my grip on a couple poorly timed purchases such as JADE but still holding strong.

Quote from: nullzero on February 27, 2007, 02:25:01 PM
Man the only stock I see on fire today is the QID. DOW looks like it may see -300 points today. NASD -100 points maybe... All from the Chinese and Greenspan. I think its time to short the market this is the change in tide I been watching. I was waiting for early summer to enter but this may be the turning point on the markets. David time to pick some shorts on fire for the portfolio?

Hey Nullzero I hear ya, "shorts on fire", may be the time.  As David says its a risky business, but if the markets do turn then you are trading with the trend.  And from 3SOF data and members we should be able to identify the really inflated fluff, thats the stuff we would never never buy long for the portfolio.

Also agree on the QID, almost bought some couple of days ago just above $50.25, but hadn't quite convinced myself.  I think it might now be the time to enter, if we get a general bounce tomorrow the QID's may come down into the low $52's.  Will wait and see.

What do you think David, stocks on fire shorts, if the market turns??

Sitting tight for the most part today, sun is shining, just above zero, have been out shoveling some snow and went to the car wash to get rid of some salt on the truck.

Quasi

I keep an eye on the general markets by going to this site that shows the weekly, daily, and 60 minute charts on the markets direction (dow, qqq, nasdaq).  Here is the web link (I hope it copies okay...).

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID897936&cmd=show

INSM is up today on big dip day on high volume.  You would think on a day like today it would be a perfect candidate to tank, because all it has going for it is speculation right now.  Must be some pretty strong speculation.

David,

What made you decide to choose exm over btj to add to the portfolio.

Thanks

HOLY SHIT! -460 on the DOW

Quote from: nullzero on February 27, 2007, 03:00:24 PM
HOLY SHIT! -460 on the DOW

INSANE, very glad I went to cash, I have never seen anything like this.

I know I still have PTCH.OB, SPWR, DLSL.OB, IPT, ANGN and JAKK to cover, but I feel it is more important to think about the general market now, so I'll pass this on for tomorrow (not really in the mood too), so tomorrow I'll pick just 4 new ones to analyze.

Still on the Buffet/Livermore debate, perhaps if Buffet had lived through the 1929-1932 bear market he wouldn't be, not even close, one of the richest men in the world, because back then the Dow Jones Industrial Average fell by 90%

Buffet also lived through, and was heavily invested over that time, the biggest and longest bull market in the entire US history, the 1982-2000 bull market, that saw the Dow rise almost 12 fold in just 18 years.

So, the fact that Livermore died poor and Buffet is the second richest man in the world doesn't prove that one's theory is better than the other, maybe it was just a matter of timing.

I believe Livermore went bankrupt again in 1933 not because he was wrong in the market, but because banks simply went bankrupt too, so he was left without his money.

Anyway, for the next post let me look at some indicators I used to use when I played the general market futures, like the e-mini S&P500 and the DAX.

I cant trade through scottrade I guess their systems are overloaded. Either that or trading has been halted... the Plunge Protection Team must of stepped in to rebound the markets.

Quote from: tokyopua on February 27, 2007, 03:02:23 PM

Quote from: nullzero on February 27, 2007, 03:00:24 PM
HOLY SHIT! -460 on the DOW

INSANE, very glad I went to cash, I have never seen anything like this.

The Market sure is interesting today! 

Stephen Roach from Morgan Stanley raised the "complacency" flag on Monday:

The World Drops Its Guard

He's not a market strategist, he's a global economist. I respect his views a lot. Then Greenspan said there could be a recession in late 2007. I respect him too.

I saw the latest Commitment of Traders Report and indeed it shows complacency, with commercial hedgers heavily on the short side and speculators long.

The $VIX is jumping 58% today from a very, very low level on an historical basis.

China has been growing on an average of 10% a year for the past 20 years or so, it sure is ready for a sharp recession.

Valuations of several stocks seem cheap in relative terms, but in absolute terms they seem quite expensive on average, trading at what, 18 or 19 times 2007 estimated earnings?

I guess I'll have to concede bears are right in selling off today. This isn't even the start of a new bear market, the one that started in 2000 never ended, since the S&P 500 didn't break to an all time high. I guess this is looking more and more like the 1968 - 1982 bear market, a prolonged sideways market, going up 100%, then down 50%, then up 100%, then down 50% ...

I'm worried

I've decided to let go of the 3 holdings of the 3 Stocks on Fire Portfolio until the close. I'll just go smoke a cigarette before I'll do it.

For the Main, which is still up 10.7% on the year (it was up 17% yesterday), I'll have to think overnight which ones I should hold and which ones I should drop, or if I should just dump them all on a Livermore style type of thing.

Yes just read that the NYSE has been using the breakers, Plunge Protection Team?? not sure, also are they just slowing the rebound bounce at this point.

Yes a bad down day, just came back in from some snow shoveling, checking things out, scary, panic, I think automatic stops are being tripped all over the place.

However when I look at my holdings, (which are down somewhat) volume is below average.  When I look at stocks on my close watch list, most are also down, but again very few are down on above average volume and many are down on very low volume.

So for now I'm just gonna let the dust settle.  I will review tonight if I should reduce exposure anywhere and make a list of bargains worth the risk.  And look into the QID or QQQQ puts as some insurance for the short term, although the puts are a little pricey today.

Quasi

David. If our fearless leader is worried then I am more than worried. Mortified might be a good word. I will not hold my stocks much lower than they are now. I must cut my losses at some point and move on. The sad thing is that I had just traded my way back up from my previous loss. At least what I lost today was the houses money and not my capital. Have a great day!!!