Session of 03/01/2007

[labatts6254]

How about AUY, AIG, and SLW.

[nullzero]

David what do you think of SRS? Also what you think of a short on CFC.

[tokyopua]

Posted these yesterday after the session ended:

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I have a MSN stock scan for shorts made up now, still tweaking it, but today it gave:

MNC, SGR, BOL, ECLP, GTRC, SHFL

4 have dillution history, all have negative annual EPS growth rate per MSN, all have current ratios less than 2, all should have PEs that are high relative to their industries, and are between 250M and 5B market cap.
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[TraderStar]

I just got my margin account approved and would like to start shorting some stocks. I have a few questions and would really appreciate your help.

1. When I place an order to sell short, I should choose "Short" type instead of "Sell", is that right? 

2. When I want to buy back the shares, should I choose "Cover" or "Buy"?

3. While I am holding the stocks, do I need to pay any interest on the shorting shares even if I have enough cash in my account?

4. Any other rules for shorting? As you know, I only have a little over $2500 on my account for now.

Thank you very much for your help.

1 & 2. It depends on how your broker is set up ... if they offer the option to "short" and "cover" then that is probably the correct one.

3. your broker will charge you interest on the margin loaned .. it should not affect your account that much .. but be aware if a stock you are shorting pays a dividend while you are short, then you owe the dividend.  

4.  Just be careful and observe your stops strictly ..  

You can also short by purchasing a put on a stock, that way your only risk is the amount of premium you pay.  But if you are disciplined at observing stops,  shorting can be very rewarding. Good luck.  

[ravenquork]

This volatility is insane.

Seriously.  The market has no idea what it wants to do.  Even QID is all over the place. 

Fear versus Greed

[bourbonstreet_crawdaddy]

Hi David,

I had a chance to read your analysis of the market last night, and I am very impressed with your evaluation - and agree totally with your synopsis and outlook. I liquidated my stock holdings this morning, and shorted BIDU and SIGM this morning, and opened a long position in SLV. I bought shares at $140 today, and look forward to great gains in ishares Silver Trust.

I would like to open a position in Gold, and see that the ticker GLD is referring to StreetTracks Gold Shares, which have the ticker GLD. Is the NYSE issue GLD what you are referring to in your recommendation? Just want to be sure, the shares are currently selling at $66.51.

Thank You as always for your keen and perceptive insight!

Bourbon 

[David Randolph]

Looks like the best way to play it is swing trade the QID and other short plays on the volatile swings.

Not at all. Been there, done that. If one tries to swing trade these things buying and selling, buying and selling, he will end up not making money at all, even if he's right in the market.

When stocks are going down, there are violent counter moves, especially on the intraday. Short covering, bargain hunting, emotional buying, all that stuff.

I will just sit tight with my short positions and ignore the short term volatility. It's the only way to survive and prosper in a bear market (although hard to do).

Good luck

[nullzero]

Thanks David for your input. I will hold tight any other shorts you have been eying?

[David Randolph]

Hi David,

I had a chance to read your analysis of the market last night, and I am very impressed with your evaluation - and agree totally with your synopsis and outlook. I liquidated my stock holdings this morning, and shorted BIDU and SIGM this morning, and opened a long position in SLV. I bought shares at $140 today, and look forward to great gains in ishares Silver Trust.

I would like to open a position in Gold, and see that the ticker GLD is referring to StreetTracks Gold Shares, which have the ticker GLD. Is the NYSE issue GLD what you are referring to in your recommendation? Just want to be sure, the shares are currently selling at $66.51.

Thank You as always for your keen and perceptive insight!

Bourbon 

Thanks Bourbon. Exactly, it is GLD, I bought at $66.34.

[kslifka]

Thanks for the analysis on RNO.

According to RNO's website it has just begun Gold Mining Interests in West Africa.

[njshiva]

David, can you please look at CAAS if it is a good short candidate?
I see lot of dilution and rev growth is not that impressive

Thanks

[tokyopua]

Just theorizing here, but there is a lot of talk about the yen carry trade unwinding.  I heard today that Japan's finance minister said that as they investigated recently the yen carry trade was 10 times larger than they had thought.

If much of the people who borrowed yen to buy foreign higher yielding assests (say US stocks) where themselves foreigners, then it makes sense that their orders come in at market open (as they put in the orders in their time zones).

What we saw this morning is a huge down open, followed by intraday buying here at home.  I wouldnt be surprised to see a pattern of this for awhile if it is indeed driven by the unwinding of the yen carry trade.

[David Randolph]

Thanks for the analysis on RNO.

According to RNO's website it has just begun Gold Mining Interests in West Africa.

Can you provide a link for that news kslifka? I'm a bull in gold and silver for financial reasons, not economic reasons. Hence, I'm not a bull in other commodities like copper. So this play could be damaged by a falling price of copper, even though it may start operations in gold.

How about pure gold and silver plays?

Thanks, we have plenty of time. 

[kslifka]

Thanks for the analysis on RNO.

According to RNO's website it has just begun Gold Mining Interests in West Africa.

Can you provide a link for that news kslifka? I'm a bull in gold and silver for financial reasons, not economic reasons. Hence, I'm not a bull in other commodities like copper. So this play could be damaged by a falling price of copper, even though it may start operations in gold.

How about pure gold and silver plays?

Thanks, we have plenty of time. 

Sorry...I thought I did.  I noticed the Mine is not completed but is expected to be completed during the first half of 2007

http://www.rionarcea.com/tasiast_overview.html

[oakhedge]

David, How about Gold Stock GORO.OB? Thanks.