Session of 03/08/2007

[David Randolph]

Anyone here ever bought a 10 bagger? (a stock that rose 900% from your entry point)

I only bought 1, but it shouldn't count, since it was such a penny stock. Where are those 10 baggers? How to find them before they rise?

These are the questions we should be trying to answer, not if the market goes up or down today. I know, partially my fault, as I look for direction.

[WallStreetnBio]

Im suprised to see how many people are now changing their minds and flip flopping on their outlook on the market from Bear to Bull in a matter of just 3 days of weak volume buying. Becareful those switching back and forth before you know it you will have missed all the big moves. Its interesting seeing the psychology of fellow traders and how easily they will change with the movements in the market. I am sticking with the bearish outlook because of the techincal and fundamental outlook. I have a on the ground view of how things are going down here in Southern California with the economy. I have many friends and family members in debt upto their ears and see first hand of the toll the slowing housing market has on the California economy.

i hear you nullzero. michigan economy sucks as well. it seems that everyone is ignoring the 400 pound gorrila in the room. i look at it like the market can be irrational long enough for you to lose your money. i'm on the edge of my seat and if things change i will modify my portfolio but i cant keep losing money shorting stocks. i can tell you one thing im more comfortable now that im long than i was short.

[automountus]

Hi David

what do you think about TRA. they are in fertilizers business and i believe its a good business even in down times



Thanks
A

[realcoolhead]

Perhaps the best way is:

1. Keep searching for individual stocks that are fundamentally strong. So that even if there is a downturn, they won't get hurt much. I think the best way to look for those stocks are actually in a downturn, like the ones David just added back. (Again, I request NVTL to be analyzed  )

2. If we see a likely downturn, no matter if it is a correction or a possible bear market. We short a portion of the portfolio on the entire market, not individual stocks! So, SDS, QID or even a long-dated put option on QQQQ/SPY etc. are fine, just not on individual stocks or put options on them.

That way, if the market goes up, those long positions will most likely outperform a lot more than a little drag on the short side; If the market goes down, we won't make much money. But if the market is down 20% I will be more than happy to make just 2%!

Remember, investment/trading is not all about money, MENTAL HEALTH counts too! Afterall, we invest/trade for the happiness of our lives, not to be stressful and sometimes miserable ...

[nullzero]

A test for bulls and bears if post 10 things that you believe support the bullish or bearish position on the markets. I know I can post 10 things right off the top of my head for the bearish...

1) Negative savings rate for Americans not substainable

2) Manufacturing still in a recession in the U.S. (GM and Ford firing massive amounts of American employees, Michigan economy suffering)

3) Real Estate market and all the negative consquences related to it

4) Subprime Lender industry is poisoned!

5) Gas prices back over $3 dollars a gallon in parts of the country. Oil stable at over $60 a barrel.

6) Consumers tapped out of buying power due to over extending themselves in debt.

7) Massive government deficit

8] Financial Institutions highly leveraged in the market using Yen carry trade.

9) Majority of Buyouts and Buybacks supported by high leverage borrowing.

10) Majority of companies not reinvesting for future capacity or oppertunity. Instead they are giving money back to investors or stockpiling it.

[tokyopua]

Well nullzero, indeed, the market can go down, there are strong reasons for it (although I got suspicious when I saw too many people joining the bear camp too easily - usually reasons aren't that apparent when a Bear Market is coming).

I sold stocks short and bought puts and didn't like the feeling of it, even if it is a bear market. Why? Because market timing doesn't seem like a successful long term strategy to me. Livermore was a market timer, and he couldn't keep his money (even though he was a genius).

With the world being so big now, I wonder if there won't always be great growing companies to invest in, regardless of the business cycles. For example, here in Portugal, we've had and we're still an economic depression. Yet, some stocks are at all time highs because of their unique business characteristics.

David I agree we must find the best of the bunch strong long term companies. However we should try to take full advantage of short to medium term trends if the supporting data is very strong for our position and we are confident that we are on the winning side.

I am still with you Nullzero, this correction is not likely over.  I posted in the correction/bear market thread just now, but per IBD rules, this move Tuesday and today makes a valid follow through in their system very hard to come by.

I kept my QID, though covered two shorts that I didnt have conviction in from the beginning.  Definitely tough to be a bear for the last 3 days, but I think the market will be singing a different tune.

Anybody know a good way to check volume on the main indexes realitime?  I would like to check volume on this move, the best way I have currently is stockcharts.com, but it seems a bit behind realtime.  I will check yahoo finance next...

[David Randolph]

Anyway, I understand you want time to digest and take care of the short term. I'll shut up for today, going to read some articles and study a stock I believe has the potential to be a 10 bagger (it doesn't matter if it is a bull or a bear market), but I'm not completely sure because I didn't study enough about it: SILC.

Have a nice day

[nullzero]

Anyone here ever bought a 10 bagger? (a stock that rose 900% from your entry point)

I only bought 1, but it shouldn't count, since it was such a penny stock. Where are those 10 baggers? How to find them before they rise?

These are the questions we should be trying to answer, not if the market goes up or down today. I know, partially my fault, as I look for direction.

David we should ask how terliso filters the majority of his stocks. Out of all the members I believe he has found the most multi baggers using his three magic line strategy (some of them didnt perform oviously but if used some hybrid filter with strict fundamental and business understanding put into the mix we could come out with 1-3 excellent stocks.)

[TraderStar]

Anyone here ever bought a 10 bagger? (a stock that rose 900% from your entry point)

I only bought 1, but it shouldn't count, since it was such a penny stock. Where are those 10 baggers? How to find them before they rise?

These are the questions we should be trying to answer, not if the market goes up or down today. I know, partially my fault, as I look for direction.

Exactly what I was talking about yesterday ... and you are our best hope to find the 10-baggers!  Our job is to help bring you the potential candidates.  Whether the market goes bull or bear, there are people who will start businesses & become billionaires in the next few years and we just need to get in on their stock before it is 'discovered'. 
Everything else we do in the meantime, longs, shorts, puts, calls, is just playing around & hopefully we will cut our losses promptly and let our winners run, but our main focus should be to find the next 10 (or 20, 30 -- 50?) bagger.   

[BigSully1]

David, even though I was the one first recommended SILC and also followed you in buying it back, I was really surprised you chose it as one to buy back. I still believe it is a very outstanding co., but it is after all, a tech stock and an Israeli one at that?

[TraderStar]

I really would like to see SILC fill its gap first .. (I have this thing about gaps...).  Maybe I will take a small position to watch it & add if it fills the gap or at least I'll be in if it takes off 

[nullzero]

Yen is up over 1% right now and still making new highs for the day  . Watch the Asian markets tonight should be interesting I believe we will see the Nikkei get hit pretty hard if it holds. The yen carry trade be be unwinding as we speak which can hold potential big problems for emerging markets. If the Yen starts moving up closer to its 52wk highs highly leveraged big money can start buying Yen in masses and close out of emerging market positions.

Check out hte EWJ (Japan Ishares ETF)

[nullzero]

David, even though I was the one first recommended SILC and also followed you in buying it back, I was really surprised you chose it as one to buy back. I still believe it is a very outstanding co., but it is after all, a tech stock and an Israeli one at that?

Israeli economy is extremely bullish, I just read an article on it yesterday I will try to post it up here. Also Warren Buffet heavily invested in Israel a little over a year ago... so he believes it has huge potential as well.

[TraderStar]

David I hope you don't swear off options totally, beacuse of this one bad experience. They could be a great way to increase the portfolio return as long as set certain rules in advance.

For Example:
Use no more than 10% of the portfolio
Buy with at least 2 months left until expiration.
Sell at least one month before expiration
No more than 2 open option positions at one time.

Rules 1, 2 & 3 are mine too .. but why #4?  Why only 2 positions?  As a Gemini, I need several positions for each personality  
Seriously .. what is your reason for that limitation?  Thanks.

[tokyopua]

I have to laugh looking at the VIX right now, its been going down from its new recent high Monday to levels just slightly higher than the highs of December and January, about equal to September levels.

Yeah, everything is OK now, we had a huge down day 250 to 1 negative volume on the S&P last week, but it was just a blip, everything is OK now, nothing to see here people, keep moving on, absolutely NOTHING to fear. 

Seriously though, the market bounced, but expect the VIX to bounce after 4 big down days, and then as a consequence the market to go down again... 3 days of low volume buying isnt likely to heal the wounds to the technicals.



BTW, free applaud to anyone who can give me that online realtime volume source for $spx, $dji, $ndx etc.  Even Yahoo didnt have it.