Session of 02/28/2007

[David Randolph]

Is there any Brazilian ETF outthere?

That market is up 6 fold in just 4 years. But I guess a Russian ETF would be even better ... would like to make a bearish bet on emerging markets.

[tokyopua]

How about SIGM?  PE is 331

Yep, expectations are extremely inflated on SIGM, sold that one short at $28.13.

How about CIEN?

[njshiva]

short on CBAK??

[tokyopua]

I would prefer to see the portfolios develop a long/short percentage target, similar to the invested/cash targets that brokerages have.  For example, during a bull market we may be 90% long and 10% short meaning we look for 9 stocks that you like long and 1 stock that is likely to drop. 

Maybe now we should be 30/70 where we only take the best of the longs and are more willing to short weak stocks.  I don't like the all or nothing approach, but hey, I'm here to learn and maybe my thinking needs adjusting.  David has a great track record so I will give him the benefit of the doubt!

I agree because I think not everyone is able to short, atleast not me! 

I understand how you feel because I was not able to short... until yesterday.  It was much easier than I thought to apply for a margin acount, literally took me less than 3 minutes online with Etrade...

[buddjas1]

Yes, dang I chickened out & sold 2/3 this morning .. but did keep 1/3 so we shall see where it goes from here 
[/quote]

I picked up yours and David's shares.  I even got some at 2.30.  Lets hope it holds up.

[David Randolph]

Why aren't you able to short? A margin account can be opened with just $2,000.

Anyway, there will also be long picks, somewhere down the line. I expect a lot of volatility in the markets going forward, it will be harder to make money, but still worth it in my view.

[Se7en]

I would prefer to see the portfolios develop a long/short percentage target, similar to the invested/cash targets that brokerages have.  For example, during a bull market we may be 90% long and 10% short meaning we look for 9 stocks that you like long and 1 stock that is likely to drop. 

Maybe now we should be 30/70 where we only take the best of the longs and are more willing to short weak stocks.  I don't like the all or nothing approach, but hey, I'm here to learn and maybe my thinking needs adjusting.  David has a great track record so I will give him the benefit of the doubt!

I agree because I think not everyone is able to short, atleast not me! 

I understand how you feel because I was not able to short... until yesterday.  It was much easier than I thought to apply for a margin acount, literally took me less than 3 minutes online with Etrade...

I can't do it with my broker, don't forget I'm not living in the U.S. but in Belgium and transferring my funds to an American or overseas broker just for been able to short, I'll pass for that!

[David Randolph]

Ok, I bought that QID stuff @ $54.50, don't like the product all that much (since we were in a bull market), but in a bear market as I think we're entering, it is a nice diversified product that a long only account can take advantage of.

[tokyopua]

Ok, I bought that QID stuff @ $54.50, don't like the product all that much (since we were in a bull market), but in a bear market as I think we're entering, it is a nice diversified product that a long only account can take advantage of.

So you now have 3, does this mean you are done buying/shorting for the day?  I assume we still look for candidates, but the portfolio is full, right?

[rickjust]

hi,
well on qid you are buying the breakout on high volume ,
the q's made a double top maybe a few days consolidatiing on each before returning to their respective upward downward directions. too early to tell what will happen  . fear rules the market once again. !!
maxi

[Michael]

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.....  

Hi Bourbon,

You earned an applauds from me on that post

I have been bearish on the market for a looong time and am 90% in bonds (which from an investment point of view has been a bad decision). I could however easily see this market go through a 30% correction.

I have no clue if yesterdays correction will be the start of a bear market but I think it was a good reminder that the market will not go up for ever and risk management is extremely important.

When that is said even in a bear market there are stocks that go up and we have historically, as a community, been very good at finding those.

Being only 10% invested in the market has allowed me during the last 8 month to take some very significant risks and still sleep well at night (actually it is more my work that keeps me awake  )

David has decided at least for now to reduce his exposure (on the long side) in the market to 0%. I have to admit that I think that is a bit of an overreaction but if I hadn't already reduced my exposure I would do it now. If this doesn't turn out to be the start of a bear market I at least don't think there is much upside left in this bull run.

Here is the good news for traders and speculators. I do also think that the volatility will be high so when you have reduced your exposure be ready to find those stocks on fire. CPNE is in that category today  

[David Randolph]

Ok, I bought that QID stuff @ $54.50, don't like the product all that much (since we were in a bull market), but in a bear market as I think we're entering, it is a nice diversified product that a long only account can take advantage of.

So you now have 3, does this mean you are done buying/shorting for the day?  I assume we still look for candidates, but the portfolio is full, right?

Yep, we'll keep looking for stocks to short. I just feel more calm now that I've sold some stocks short.

I still have the Main to fill on the short side, and I want to go easy on that, stocks really have to be very well picked so my hands won't be weak.

But I generally agree with the 30/70 idea, I'm not going for a 100% short position. Still, it feels good to have that 10.4% return in 2007 safe in my "conservative" pocket for now.

[TraderStar]

Just my 2 cents, but .. although I agree we are due & overdue for a major market correction, I don't think yesterday was the beginning of it.   I feel there will at least be a major "dead cat bounce" recovery in the short term before the market makes its 'official' correction sometime later this year .. and it should be a doozy so learning to spot short setups starting now is not a bad idea at all. 
For the next few weeks, months however, I would not be too eager to get too short too quickly.  Yesterday's drop, partly due to a computer glitch & partly to Greenie's sneezing too loudly in Hong Kong .. is probably more of a buying opportunity, at least in the short term.
That said, I am reducing all positions way down, off margin and at least 1/2 into cash, until there is a clearer picture of what Mr. Market intends to do next.

[BigSully1]

I'm more like 50/50 right now for the very near term. I already sold much of my Ultrashorts this morning and have been shopping for bargains.

I think the Fed will be cutting interest rates again very soon and absolutely think Greenspan already set us up for it with his comments.

It will only put a bandaid on the long term situation though, and when the real bear begins, it will be a monster, IMO. Could take a couple years to play out.In the meantime, who really knows

[nullzero]

TTWO, SFLY, and NUAN