REDF

[defenderyou]

I know that you are long SIFY but as you know all too well, REDF and SIFY are a highly corelated pairs trade. I could not get any REDF to short, so I shorted SIFY (1000) at 10.37 just a few minutes ago. I see that SIFY almost closed the gap down (up to 10.72, while gap close is 10.80), but now there is a gap down to 9.05. Its funny ho Cramer pissed on SIFY the other day saying sell, calling them basically fools for not being able to execute and Internet strategy, to only come back and rec REDF like that. Seems totally inconsistent. I guess I never understood your rationale either, unless you intended to do a pairs trade (long SIFY, short REDF); but as an outright long or short I think both should be shorted. Did you use the opportunity to sell SIFY and take a nice 15%-20% profit on the purchase the other day??

As far as contest, I picked the worst of my three choices - NENG or GEOI - my two other choices would have placed me in the leader board; instead I picked MPET, and am surely on the loser Board. Well maybe the UDACHO field will be a winner and I will eat my words.

[Jimbo]

Here is Cramer's take about today's action : No Gall in 'Indian Google's' Leap

"Should Rediff (REDF:Nasdaq ADR - commentary - research - Cramer's Take) be up $5 because I said last night on "Mad Money" that I like it? Of course not; no one is that good, certainly not me. And this isn't false modesty. I have made a study of everyone, and no one is that good.
This is a stock, though, that was depressed. It was a coiled spring and went from being bad technically -- so people were short it -- to being good technically because it hit some level after I mentioned it on "Mad Money" last night. Would I sell it? If I owned it Tuesday at $15 and I didn't sell, I would be violating my bulls-bears-pigs rule, as I spelled out in Jim Cramer's Real Money: Sane Investing in an Insane World.

Of course, if you believe everything I say about Rediff being the Indian Google (GOOG:Nasdaq - commentary - research - Cramer's Take) -- and there is no reason not to believe that, given its standing in the country -- you could argue that it would get to $20 eventually. But what I think is appalling to some professionals is how it got there in one day.

To that I say, that's a problem with brokers and electronic brokers. As a broker at Goldman Sachs, I simply wouldn't let anyone buy a stock that was up $4 or $5 unless it was a $100 stock -- even if I wanted the commission and it was the end of the month and I needed to make my numbers! I believe that a combination of brokers who won't put limits on their customers and customers who trade online without enough discipline to do the job took this one up."


And another one : Why I'm Short Rediff by Doug Kass (Street Insight Contributor)


"Jim "El Capitan" Cramer writes about Rediff.com, a company that he mentioned on "Mad Money" last evening.
Today the shares are more 35% higher based on Jimmy's bullish comments on the company last evening in which he forecast that it would rise back to $20 in the next few months. It did that this morning! I view REDF with less enthusiasm than my pal does and I will have some more detailed thought on REDF over the next few days.

In a recent piece, I suggested that some of "Mad Money's" viewers get caught up in the moment and bid -- with Internet speed -- some of his recommendations to absurd levels. (Jimmy justifiably ridicules such aggressive after-market buying in his column!) From my perch, REDF is a clear example of this giddiness, and I have taken a short rental (short-term long) in the name as I believe it will retreat right back into the mid teens over the next few weeks.

REDF is an unprofitable company with about 200 employees. The company publishes two newspapers and provides online information on shopping, entertainment -- oh yes and matchmaking and cricket! In addition, REDF provides a chat and messaging service in India. The company's annual revenues are less than $15 million -- down 30% from 2003 -- and the company has never been profitable. In this writer's opinion, comparisons of REDF to Google and Yahoo! fall ... ahem, quite a bit short!



Hope those articles at TheStreet.com bring more sellers 

[shawFund]

This one I agree with you for short position.

Cramer is just a show business man. You have to be your own boss.

He cannot make you money for free.

[valueseeker]

I rode REDF from $13 to high $19 before I sold a couple of months back. REDF's PE is very high, however, it's making money as opposed to SIFY is not.

REDF is equivalent to Yahoo & Google, while SIFY is equivalent to American online + Yahoo maybe. It's a bit harder for SIFY to make money because of the infrascture investment. I could be wrong, but I won't short either REDF or SIFY.


-Valueseeker

[stocky]

REDF is certainly not India's google and not certainly yahoo. Sometimes I suspect Cramer is not just spicing up his show but may have some thing up his sleeves.

[willey]

All JMHO, of course...

Thursday should see the "megaphone pattern" ( traced out on the Dow industrials, which began just before December & which "double bottomed" on Wednesday, 1-25 ) begin its monsterous rise towards Dow 11,500!  It won't be a straight shot higher ( of course ) but will be impressive, to say the least, & will catch many folks off guard.

Anyway, given the above & its playing out ( as I suspect ), being short anything internet may not be the best way to good financial health...

...but, what do I know...

willey

[David Randolph]

I know that you are long SIFY but as you know all too well, REDF and SIFY are a highly corelated pairs trade. I could not get any REDF to short, so I shorted SIFY (1000) at 10.37 just a few minutes ago. I see that SIFY almost closed the gap down (up to 10.72, while gap close is 10.80), but now there is a gap down to 9.05. Its funny ho Cramer pissed on SIFY the other day saying sell, calling them basically fools for not being able to execute and Internet strategy, to only come back and rec REDF like that. Seems totally inconsistent. I guess I never understood your rationale either, unless you intended to do a pairs trade (long SIFY, short REDF); but as an outright long or short I think both should be shorted. Did you use the opportunity to sell SIFY and take a nice 15%-20% profit on the purchase the other day??

As far as contest, I picked the worst of my three choices - NENG or GEOI - my two other choices would have placed me in the leader board; instead I picked MPET, and am surely on the loser Board. Well maybe the UDACHO field will be a winner and I will eat my words.

I think you did well selling SIFY short, as I read some more I have many doubts about the relationship between SIFY, Raju Vagesna (sorry if this isn't the correct name) and his brother. Don't like that mix and transactions with the company's assets.

I was selling SIFY anyway, but Cramer gave me the opportunity to profit nicely (well, not him, his followers). Sure I sold it, at $10.30, didn't you get the newsletter before the open? You can also see SIFY as a closed trade on the Stocks on Fire Portfolio page.

My pick at the Contest (DIET) isn't doing well either 

This one I agree with you for short position.

Cramer is just a show business man. You have to be your own boss.

He cannot make you money for free.

I like to read what he writes, and listen to what he says, and I might even pay for that, but, as I look at his portfolio, it is up what, 15% over the last 3 years? I was once a subscriber to his service, but it seemed like he never bought or sold anything for real, he just danced around positions. «Now I sell 500 of my 6,000 shares», «now I buy back those 500 and add another 500», always around the same core holdings.

Off course I always think and invest with my own head, though I try to learn a lot from others.

I rode REDF from $13 to high $19 before I sold a couple of months back. REDF's PE is very high, however, it's making money as opposed to SIFY is not.

REDF is equivalent to Yahoo & Google, while SIFY is equivalent to American online + Yahoo maybe. It's a bit harder for SIFY to make money because of the infrascture investment. I could be wrong, but I won't short either REDF or SIFY.
-Valueseeker

Thanks for your opinion Valueseeker 

I see REDF with about $16M in revenues in 2005 and a $496M market cap 

I believe this overvaluation is impossible to sustain for much longer !

REDF is certainly not India's google and not certainly yahoo. Sometimes I suspect Cramer is not just spicing up his show but may have some thing up his sleeves.

Well, we just don't know ... but I bet that there are many people, even companies, chasing him so that he recommends their stock. REDF seems like an ordered job, but I don't think Cramer needs stuff like that, or the risk.

All JMHO, of course...

Thursday should see the "megaphone pattern" ( traced out on the Dow industrials, which began just before December & which "double bottomed" on Wednesday, 1-25 ) begin its monstrous rise towards Dow 11,500!  It won't be a straight shot higher ( of course ) but will be impressive, to say the least, & will catch many folks off guard.

Anyway, given the above & its playing out ( as I suspect ), being short anything internet may not be the best way to good financial health...

...but, what do I know...

willey

willey, you said the same thing just before REDF went down 20-30%, remember? The market can go up a lot and a bad stock can go down, don't you think? But I agree with you, shorting is not all that fun and I consider this REDF short just as a trade, a trade that I might even close today (I'm still studying, and Jimbo's post seems promising).

Here is Cramer's take about today's action : No Gall in 'Indian Google's' Leap

"Should Rediff (REDF:Nasdaq ADR - commentary - research - Cramer's Take) be up $5 because I said last night on "Mad Money" that I like it? Of course not; no one is that good, certainly not me. And this isn't false modesty. I have made a study of everyone, and no one is that good.
This is a stock, though, that was depressed. It was a coiled spring and went from being bad technically -- so people were short it -- to being good technically because it hit some level after I mentioned it on "Mad Money" last night. Would I sell it? If I owned it Tuesday at $15 and I didn't sell, I would be violating my bulls-bears-pigs rule, as I spelled out in Jim Cramer's Real Money: Sane Investing in an Insane World.

Of course, if you believe everything I say about Rediff being the Indian Google (GOOG:Nasdaq - commentary - research - Cramer's Take) -- and there is no reason not to believe that, given its standing in the country -- you could argue that it would get to $20 eventually. But what I think is appalling to some professionals is how it got there in one day.

To that I say, that's a problem with brokers and electronic brokers. As a broker at Goldman Sachs, I simply wouldn't let anyone buy a stock that was up $4 or $5 unless it was a $100 stock -- even if I wanted the commission and it was the end of the month and I needed to make my numbers! I believe that a combination of brokers who won't put limits on their customers and customers who trade online without enough discipline to do the job took this one up."


And another one : Why I'm Short Rediff by Doug Kass (Street Insight Contributor)


"Jim "El Capitan" Cramer writes about Rediff.com, a company that he mentioned on "Mad Money" last evening.
Today the shares are more 35% higher based on Jimmy's bullish comments on the company last evening in which he forecast that it would rise back to $20 in the next few months. It did that this morning! I view REDF with less enthusiasm than my pal does and I will have some more detailed thought on REDF over the next few days.

In a recent piece, I suggested that some of "Mad Money's" viewers get caught up in the moment and bid -- with Internet speed -- some of his recommendations to absurd levels. (Jimmy justifiably ridicules such aggressive after-market buying in his column!) From my perch, REDF is a clear example of this giddiness, and I have taken a short rental (short-term long) in the name as I believe it will retreat right back into the mid teens over the next few weeks.

REDF is an unprofitable company with about 200 employees. The company publishes two newspapers and provides online information on shopping, entertainment -- oh yes and matchmaking and cricket! In addition, REDF provides a chat and messaging service in India. The company's annual revenues are less than $15 million -- down 30% from 2003 -- and the company has never been profitable. In this writer's opinion, comparisons of REDF to Google and Yahoo! fall ... ahem, quite a bit short!

Hope those articles at TheStreet.com bring more sellers 

Great post and info Jimbo, thanks 

I used Cramer's recommendation to sell SIFY with a nice one day profit and now I'll use it again to close my REDF short also with an handsome profit, I believe.

I see people that bought yesterday scratching their heads thinking: «Cramer sold, and now there's this other guy at thestreet.com, also respectable, saying he is short the stock. I better sell»

My estimate is that they will sell it enough to fill the $16.79 - $16.83 gap and that's where I'll take profits, hopefully today.

[KCScott]

I  like to read what he writes, and listen to what he says, and I might even pay for that, but, as I look at his portfolio, it is up what, 15% over the last 3 years? I was once a subscriber to his service, but it seemed like he never bought or sold anything for real, he just danced around positions.

I'd pay for a service that e mailed me, that morning,  what stocks he is going to feature on his show that night. You could make serious "mad money" trading with that knowledge as he is now a mover of markets as evidenced by REDF.

I'm short REDF 640 shares at $16.00 which, Thanks to Cramer, got smoked Wednesday.
I shorted another 1,000 today at $19.71 based on David's analysis and this:



Shooting Star
The shooting star is made up of one candlestick (white or black) with a small body, long upper shadow and small or nonexistent lower shadow. The size of the upper shadow should be a least twice the length of the body and the high/low range should be relatively large. Large is a relative term and the high/low range should be large relative to the range over the last 10-20 days.

For a candlestick to be in star position, it must gap way from the previous candlestick. In Candlestick Charting Explained, Greg Morris indicates that a shooting star should gap up from the preceding candlestick. However, in Beyond Candlesticks, Steve Nison provides a shooting star example that forms below the previous close. There should be room to maneuver, especially when dealing with stocks and indices, which often open near the previous close. A gap up would definitely enhance the robustness of a shooting star, but the essence of the reversal should not be lost without the gap.

Thursday's decline and today's action (so far) seem to confirm the weakness.
Looking at money flow would tend to confirm the over reaction to Cramers claims.

MACD did turn upward - and I won't allow this to run away, so my out is a 20.63 Close (13% of my $18.26 Average).

Heading into REDF earnings announcement next week, I feel the selling pressure will commence in earnest.

Cramer's followers also have been noted to have very low threshold of pain.

I guess I'm about to find out.

[willey]

Hi David,

You missed the entire point of my post!  My post was about the Dow stocks & the markets direction in the short term!  REDF was mentioned merely to reflect that in a BULL MARKET, shorts can easily get burned!!!

I guess we don't communicate well, huh?

Best to you & keep up the great picks...

willey

[David Randolph]

Hi David,

You missed the entire point of my post!  My post was about the Dow stocks & the markets direction in the short term!  REDF was mentioned merely to reflect that in a BULL MARKET, shorts can easily get burned!!!

I guess we don't communicate well, huh?

Best to you & keep up the great picks...

willey

Hello willey, hey, what do I know about English? 

REDF will release 4th quarter results on Thursday before the opening bell: Rediff.com India Limited Schedules Third Quarter Conference Call For February 2, 2006

I don't have any 10-Q Form from REDF, they never filed one, its a shame ... just 6-K files with  text. Perhaps this explains the overvaluation, nobody reads their numbers carefully.

And I'm not the only one saying REDF is overvalued, the company's CEO also said that:

«"We are valued higher than the most valuable internet company (Google) in the world," says Ajit Balakrishnan, chairman & CEO of Rediff.com India Ltd.

On this article, the CEO also says he's somewhat "afraid" to list the company on Mumbai's stock market, because Indian investors "may not understand the valuation."

You can read the whole article here:       
With Google after Microsoft, Rediff hopes to reap India advantage

The thing is Google is Google, not only in the US, but around the world. I live, as you know, in Portugal, and I don't use www.sapo.pt or www.clix.pt as search engines (these are "popular" Portuguese portals), of course I use Google, even when I search for Portuguese content.

With about $600M in market cap and just about $15M in revenues for 2005 REDF is, as REDF's CEO confirms, the most highly valued internet company in the world !

I'll close this trade at the $16.79 - $16.93 gap, when Cramer's hype ends.

[willey]

Hi David,

Good fortune to you!

If I was a bettin' man, I'd say the Dow stocks blow thru 11,000 this week!  If that happens, it'll drag higher many overvalued stocks.

but, what do I know?

willey

[Lucas Scott]

The chart looks bullish to me at this point. I avoid being short on stocks when they get massive volume like we saw on Wednesday. I think a retest of $21.40 happens prior to earnings.  What happens after earnings is anyone's guess. Probably will sell off but who knows. Or as willey likes to say, what do I know? Maybe instead it gaps up to $50 on Friday.

[bw6458]

   I got this blog off the yahoo board it supports the REDF short position.... some interesting reading

http://gaurav1.blogspot.com/2006/01/hype-on-rediff.html

earnings this week will tell the tail

[Lucas Scott]

Sold my long position at $21.35. That's where I set a "just in case" limit order this morning -- looking for a retest of Wednesday's high and it got it and more.  I think REDF will go a little higher tomorrow, but not enough to justify getting back in. After all, probably half the stocks in the stock universe will go up tomorrow, right?  Gotta save powder for plays like PEIX, which I championed last night and rocketed today - perfect timing!!

[actrader]

Cramer reaffirmed his position on REDF last nite.  Said to check out TheStreet.com and Jim Altucher's article.  But it looks to be a subscription only article.  Anyone have access who can give us the skinny on the bull case?

Anyways, I am looking for a buy the hype, sell the earnings scenario.