Session of 02/28/2007

[David Randolph]

Good morning

Sorry, just got back from lunch. I've asked for Ramsburg to liquidate all the Main Portfolio's holdings over the first hour of trading today.

I'm on the bear camp now (I wrote a full article explaining my position on the premium area).

So I want suggestions not to buy stocks, but to sell stocks short. I'll write another post with the characteristics I'm looking for.

Thank you for your participation!

[David Randolph]

Good stocks to short are:

- Breaking down on the chart. Stocks that went down heavily yesterday and are higher in the early morning trade.
- With a price per share between $5 and $50.
- With at least 200,000 shares traded until 9 pm.
- Market cap between $250 M and, say, $5 B.
- No OTCBB stocks.

Overall, stocks with bearish momentum.

On the fundamental side, but I admit you won't have the time, the tools or the willing to check that, I would like to have stocks with:

- Weak balance sheet
- Habit of diluting shareholders value
- High valuation in terms of revenue and earnings multiples

I'm not in a hurry to start selling, so let's have some suggestions, I'll make a quick analysis on them. Today I want to cover a lot more stocks, so there's no poll and no big analysis, just some quick comments on each stock.

Thanks and good luck

[nullzero]

Got some to start off.

FRPT
JADE
ACH
AOB

[runner2847]

David,

Wasnt it just a day or two ago that you made a point to talk about how Buffet never shorted stocks and the other guy who did short stocks ended up killing himself.  I dont think I know anywhere approaching the amount you know about this stuff, but I think it might a little premature to assume that yesterday was going to turn into a trend.  Thus far the markets are holding even or slightly green. If anything, in my limited experience, I agree with your statements yesterday morning that the big sell off presented a great buying opportunity on stocks like CECE ect that have been hot as of late.

What are you thinking for the 3stocks portfolio? Do you plan to start shorting?

Thanks for your explanations David. I've learned a lot in the couple of weeks Ive been following the board. I will have money available to start trading in a couple of weeks so I plan on following along with you on here as soon as my funds are available.

[nullzero]

Buffet doesnt buy in markets like this he waits till it bottoms out. If we want to make the money work for us we need to take advantage of the trend that is going on.

[mbaugh]

Short JOYG, missed earnings and easy to get short shares.  Look at the last time it fell from its high.

[wontfindaname]

How about VSE? Blowout earnings today.

[David Randolph]

Got some to start off.

FRPT
JADE
ACH
AOB

Yep, FRPT is one of the most overvalued stocks I've ever seen, and it has been diluting shareholder's value in a rage.

I just sold it short at $15.95, even though it isn't the best sector, this looks like a sure thing for a 30% decline.

[nullzero]

SAY, ISIS, NITE, URBN

[bourbonstreet_crawdaddy]

Hi David,

It sounds like you have done a great deal of analyzing the market over the past 48 hours, and I am interested to find out more about your bearish outlook for the markets going forward. It does appear that we may be nearing the end of a bull market phase, but I do believe that excellent opportunities do exist, and will exist even in a down market.

It will be interesting to see how the winners that we have identified on the board will respond, as we speak, CPNE.ob is up >9% and ETLT.ob is up >4%!  I expect to see them rebound and hit new highs soon.

As you stated last week on the board David, no man can continually make large gains over a long stretch of time - however, with 1000 minds working together, as we have here on 3SOF, I believe that we can identify and benefit from those opportunities where stocks are making large gains..... 

I am excited about the future, and believe that many more opportunities will surface here on the 3SOF board - we just have too many highly intelligent investors keeping us informed of great companies, and there will continue to be great opportunities in the future.

Have a great day - and let's all figure out how to make some BIG $$$

Bourbon   

[la-onda]

David,
please check MER!

tia
O.

[nullzero]

CHINA looks like a good one  .

[David Randolph]

David,

Wasnt it just a day or two ago that you made a point to talk about how Buffet never shorted stocks and the other guy who did short stocks ended up killing himself.  I dont think I know anywhere approaching the amount you know about this stuff, but I think it might a little premature to assume that yesterday was going to turn into a trend.  Thus far the markets are holding even or slightly green. If anything, in my limited experience, I agree with your statements yesterday morning that the big sell off presented a great buying opportunity on stocks like CECE ect that have been hot as of late.

What are you thinking for the 3stocks portfolio? Do you plan to start shorting?

Thanks for your explanations David. I've learned a lot in the couple of weeks Ive been following the board. I will have money available to start trading in a couple of weeks so I plan on following along with you on here as soon as my funds are available.

I've gave it plenty of thought and study all night long, and also answered that Buffet idea. The thing is even Buffet has been saying for several years that he can't find anything attractive to buy in the market and he's sitting in a big pile of cash waiting for prices to go down to more attractive valuations.

I see problems arising in China's economic system and the US consumer finally retrenching some of the status quo of more debt turned into more spending.

Perhaps more on the end of the day I'll post my article here.

Yes, the right way to go now, in my opinion, is to short stocks.

Livermore was a victim of the times, Buffet was very fortunate to be full invested in the biggest bull market of all times, the 1982 - 2000 bull market that made the Dow rise 1,400%.

Can be wrong though, good luck

[tokyopua]

Got some to start off.

FRPT
JADE
ACH
AOB

Yep, FRPT is one of the most overvalued stocks I've ever seen, and it has been diluting shareholder's value in a rage.

I just sold it short at $15.95, even though it isn't the best sector, this looks like a sure thing for a 30% decline.

Bummer, I go to short my first stock ever and Etrade has no shares to lend lol.

[nullzero]

Got some to start off.

FRPT
JADE
ACH
AOB

Yep, FRPT is one of the most overvalued stocks I've ever seen, and it has been diluting shareholder's value in a rage.

I just sold it short at $15.95, even though it isn't the best sector, this looks like a sure thing for a 30% decline.

Bummer, I go to short my first stock ever and Etrade has no shares to lend lol.

There will be other chances  .