That's about the only good thing that has happened this month. For the week, I reinforced my position on Gushan and added to the solar portfolio with STP. The main problem right now is that I have too many stocks, and that needs to be changed up a bit. The key ones right now aren't doing well, these include Genetech, First Solar, and Intuitive Surgical, although they're quality stocks, these are not likely to last for long as they become supplanted by other high growth stocks. Currently, it seems that I have a lot more stocks in the alternative energy sector, STP, FSLR, GU, WGOV, and ENER, these make up close to 35% of the portfolio. So, may be there will be some consolidation along this sector shortly. Overall, May was a bit of a loser month. We'll have to see how June turns out, and that might set a better tone for the rest of the year.
Saturday, May 31, 2008
Friday, May 23, 2008
Tough Week, nowhere to go but down from here
What a tough week. More lessons reiterated, the key one being always take profit when its there. I sold Apple and Gushan after watching those drop much of the week. Selling Apple was a mistake, the only hope is that sometime next week, the stock will resume its drop sufficiently to buy back in. With Gushan, the sale should've come at $17 or so instead of watching it go down to $15 before selling. This was one of those costly mistakes that one can only regret in hindsight. Selling Rio was probably a good move though considering how much it went down at the end of the week. There should also be an entry point there somewhere.
Although this week has been a bit of an eye opener as well. Bought into a few other beaten down stocks, Citigroup, WWE, Dendreon, and First Solar were all picked up. Although First Solar was bought on averaged down basis, added further to the position every time the stock went down. Given the continued rise on energy prices, FSLR is a continued good bet. Citigroup has also been beaten down over the last couple of weeks, started a small position there that may be added to as time goes on, generally the financials look like they've nearly bottomed, so, now might be a time to cautiously start picking some up. WWE is going to be another one that will have more of a position added onto it going forward, there is a nice little dividend that should happen in mid June, which has a prospect of boosting its prices in the next couple of weeks. Finally, Dendreon is the speculative play, having come down quite a bit lately, it was time to move back in a little and see if there is a quick pop and some fast money that can be made, but realistically, with Dendreon until Provenge (their cancer drug) gets approved, they will be stuck in the $5 range.
The week though has managed to help me solidify my thinking on strategy a bit more. The first is that my portfolio has to be split into three parts, core holdings where good long term companies like Apple will be held, secondary holdings that will trade in and out of speculative stocks like a Dendreon, and then just a small cash position to look for new possibilities. The problem though is that it'll take some time to get to this stage. Another interesting lesson is averaging, this is something already known, but had to be reinforced. Gushan was a good example of averaging while the stock is going up, and managed to get decent gains even if timing wasn't so great. Now, FSLR is going to be another test case, the stock dropped heavily this week, strange given the surge in oil. Having bought it on the way down, this is definitely still a stock that has legs, so I think it'll have some room to bounce back up, only time will tell if I'm right on this.
Overall, May has been an unkind month, but it isn't over yet. Hopefully, the foundation is being laid for some decent gains going forward.
Although this week has been a bit of an eye opener as well. Bought into a few other beaten down stocks, Citigroup, WWE, Dendreon, and First Solar were all picked up. Although First Solar was bought on averaged down basis, added further to the position every time the stock went down. Given the continued rise on energy prices, FSLR is a continued good bet. Citigroup has also been beaten down over the last couple of weeks, started a small position there that may be added to as time goes on, generally the financials look like they've nearly bottomed, so, now might be a time to cautiously start picking some up. WWE is going to be another one that will have more of a position added onto it going forward, there is a nice little dividend that should happen in mid June, which has a prospect of boosting its prices in the next couple of weeks. Finally, Dendreon is the speculative play, having come down quite a bit lately, it was time to move back in a little and see if there is a quick pop and some fast money that can be made, but realistically, with Dendreon until Provenge (their cancer drug) gets approved, they will be stuck in the $5 range.
The week though has managed to help me solidify my thinking on strategy a bit more. The first is that my portfolio has to be split into three parts, core holdings where good long term companies like Apple will be held, secondary holdings that will trade in and out of speculative stocks like a Dendreon, and then just a small cash position to look for new possibilities. The problem though is that it'll take some time to get to this stage. Another interesting lesson is averaging, this is something already known, but had to be reinforced. Gushan was a good example of averaging while the stock is going up, and managed to get decent gains even if timing wasn't so great. Now, FSLR is going to be another test case, the stock dropped heavily this week, strange given the surge in oil. Having bought it on the way down, this is definitely still a stock that has legs, so I think it'll have some room to bounce back up, only time will tell if I'm right on this.
Overall, May has been an unkind month, but it isn't over yet. Hopefully, the foundation is being laid for some decent gains going forward.
Tuesday, May 20, 2008
Tough Day
No doubt about it, it was a tough day on the street, down nearly 200 points. Most of the portfolio held up well. But of course, Dryships was a disaster. Somehow that's not much of a surprise right now, given that this was one of those stocks that have been moving up in anticipation of earning, and now it decides to drop. No choice but to hold on to this for a little while and see how it plays out, since it's a small position, no big loss. Closed out the position on RIO though, although not at the most favorable price, this is also one that has had a bit of a run.
On the other hand, WGOV has been a disappointment just like DNA, and ENER looks like its stuck in a trading range just like AAPL, and ISRG. FSLR on the other hand had a not so bad day given the state of the market. Asia looks like it is dropping again for Wednesday, so it will likely mean a down day for stocks yet again. Given the continued currency weakness, it is likely that energy stocks will continue to surge. This should be the overriding theme of this year. Meaning, the portfolio might have to switch from its tech focus to more of an energy focus for the rest of the year.
On the other hand, WGOV has been a disappointment just like DNA, and ENER looks like its stuck in a trading range just like AAPL, and ISRG. FSLR on the other hand had a not so bad day given the state of the market. Asia looks like it is dropping again for Wednesday, so it will likely mean a down day for stocks yet again. Given the continued currency weakness, it is likely that energy stocks will continue to surge. This should be the overriding theme of this year. Meaning, the portfolio might have to switch from its tech focus to more of an energy focus for the rest of the year.
Monday, May 19, 2008
Monday: May 19, 2008
Today was rather interesting. Pulled some money out of Gushan (GU) and then made a m0ve into a transport Dryships Inc (DRYS) and just a small position back into First Solar (FSLR) thanks to the big drop today. Tomorrow is likely to be a down day, Asia is showing some signs of weakness. This may be time to move out of a position like Apple (AAPL) at least for the short term since momentum seem to have stalled there for the moment.
The DRYS move this morning was likely a mistake, got caught trying to turn a quick buck even though the stock has been on a tear lately and has nearly doubled. FSLR may also be a mistake since there is a good chance this one goes back down to $280, but a small position at $292 won't hurt. Unless the demand for oil suddenly drops, the alternative energy play will continue to remain a good one for the long term. So, if there is a lot more weakness this week, it may be an opportunity to further add to the positions, especially if in companies like FSLR and GU.
The DRYS move this morning was likely a mistake, got caught trying to turn a quick buck even though the stock has been on a tear lately and has nearly doubled. FSLR may also be a mistake since there is a good chance this one goes back down to $280, but a small position at $292 won't hurt. Unless the demand for oil suddenly drops, the alternative energy play will continue to remain a good one for the long term. So, if there is a lot more weakness this week, it may be an opportunity to further add to the positions, especially if in companies like FSLR and GU.
Friday, May 16, 2008
It's Friday... and the market isn't too bad
All in all, it wasn't a bad market this week. Added a couple of new positions this week, removed one position, and noticed something interesting. First Solar (FSLR) position was closed on Wednesday, and then added Energy Conversion Devices (ENER) and Woodward Governor (WGOV) on Thursday. Both the later have been in the news lately, ENER having just announced a great quarter, and WGOV was mentioned as a great wind power play. But the theme is pretty obvious, alternative energy is all the rage, and Gushan (GU) bought last week apparently had a decent enough quarter that it continues to move up. All this thanks to the oil run up and Goldman's $200 per barrel oil prediction, it wouldn't be surprising if oil hit $130 a barrel next week.
This would call for a new trading strategy though for a good part of the portfolio. The theme is all going to be based on the fact that higher oil prices are inevitable. Therefore, the alternatives are all going to be in hypergrowth mode. The question is which are the right ones to pick to maximize returns. Part of the reason FSLR was sold was due to the recent runup. The runup is based on the premise that it's the only game (for thin film solar) in town, which is untrue. But FSLR is the largest name in play right now.
For the future, FSLR will likely track oil much more closely than before, and has a higher chance of pull back given the recent run up. So, FSLR would be a buy on a dip. Probably below $270 or so, but the major opportunity for growth will likely be found elsewhere.
This would call for a new trading strategy though for a good part of the portfolio. The theme is all going to be based on the fact that higher oil prices are inevitable. Therefore, the alternatives are all going to be in hypergrowth mode. The question is which are the right ones to pick to maximize returns. Part of the reason FSLR was sold was due to the recent runup. The runup is based on the premise that it's the only game (for thin film solar) in town, which is untrue. But FSLR is the largest name in play right now.
For the future, FSLR will likely track oil much more closely than before, and has a higher chance of pull back given the recent run up. So, FSLR would be a buy on a dip. Probably below $270 or so, but the major opportunity for growth will likely be found elsewhere.
Monday, May 12, 2008
Random Thoughts
What an interesting trading day that I can't take advantage of. One of the problem with having success is that you want to hold on to it. Now, the problem is more real if you only have one success to really hold on to. Apple is good right now, and the one part of me says to sell the darn thing. Another part looks at the last sell action on Apple and RIMM and thinks what a bloody mistake that was. Of course, I do wish I have some money now into the down stocks, my poor Intuitive Surgical and First Solar. Both are momentum stocks, hopefully, I can ride the upward momentum for a bit and make a bit of money that way.
One thing for sure, my trading strategy need to change a little bit. Wonder if the market will be good tomorrow.
Tuesday, May 6, 2008
How not to negotiate a deal
One of the most enjoyable class during the course of my MBA was negotiations. One of the first concept that you learn is BATNA (Best Alternative To a Negotiated Agreement), basically, BATNA is the only standard which can protect someone both from accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept. So, if the BATNA is better than the agreement you would reach, then you would not go for the agreement. How is this related to stocks and business?
The most obvious example is the now defunct Microsoft/Yahoo deal. For Yahoo, and more specifically, the chief Yahoo (defined in Dictionary.com as an uncultivated or boorish person; lout; philistine; yokel) Jerry Yang, there were really two simple options:
Negotiated agreement: That leads to Jerry walking away rich, and with his reputation intact while Microsoft is stuck with hopelessly trying to incorporate the mess that Yang and his predecessor Terry Semel left behind into its organizational structure.
BATNA: Keep Yahoo independent, and the face the litany of horrors that includes:
- Angry shareholders in revolt, and if they succeed, Yang's legacy with Yahoo will be one of humiliation.
- Even lower offers from future suitors if Yahoo can even find one.
- An advertising system that is obviously not working well, why else would Yahoo outsource its search advertising to Google.
- A continued decline in stock price if Yahoo income doesn’t show improvement next quarter.
So, when you look at the alternatives, it’s really simple. It’s understandable why Yang wanted to squeeze a few billion more from Microsoft, but that should never have been done at the cost of losing the deal. So, even if he took the deal as it was on February 1st, he would’ve been better off than the BATNA.
As for why I think Yahoo is in a weak position, just look at Jerry’s statement on Monday. It’s like saying: “we’re sorry we're so stupid, please take us back.” Losing the deal was a mist
ake, but owning up to it is an open invitation for your already pissed off . So, in the end, may be Yang and the Yahoo board could’ve benefited a little more from some MBA classes. That’s why I think the definition of yahoo on Dictionary.com would greatly benefit from a picture of the Jerry Yang, the self professed Chief Yahoo, talk about an apt description.
Trading: May 6, 2008
The trading today was interesting. I knew what I wanted, but the execution was poor. I wanted to dump HRP, and it happened. I wanted to get more GU, that also happened. But in both instance, neither was optimum, the puny amount of GU I bought up was not worth the effort. The HRP move out was not bad, mainly because I didn't want to be around when they reported earnings on Thursday, we'll see if this is a good call or not. GU is something I've been meaning to move into a little more over time. The stock is coming off of its lows, so definitely worthy of some excess attention, still don't know when the earnings report come out.
As for the others, Apple, Intuitive, First Solar and Genetech are all riding on momentum for now.
Thursday, May 1, 2008
Comparing against the past
I've done this BLOG for a little over a month now, and I've compared my end of March results to end of April results. And I was decidedly unhappy. Had I kept the exact same portfolio I had at the end of March until now, I would be actually about 10% better off overall. I guess that's the change in fortunes.
Looking at the current list of stocks, I wonder may be if the better idea is to hold onto the brand names. Apple is certainly worth it. And stupid me, by selling when I did, I missed essentially $20 of gain on 500 shares, yep, there goes $10K. But now that I've bought back in, I think I'll just hang on for the ride. Visa, another example of a badly timed sell, 400 shares went up another $20 from when I sold, there's another $8K. These were definitely bad choices. RIMM was another one. My pick since then, ISRG and FSLR have both flopped. HRP hasn't done any better... so far, not a good month.
I think this calls for a sit down and a re-evaluation of strategy going forward. Oh, trades of the day, I pulled in a little bit of Gushan Energy. I heard a little about this stock, decided to put up a small position in it, and see what happens. Let's see if this one is a flop or a not.
Looking at the current list of stocks, I wonder may be if the better idea is to hold onto the brand names. Apple is certainly worth it. And stupid me, by selling when I did, I missed essentially $20 of gain on 500 shares, yep, there goes $10K. But now that I've bought back in, I think I'll just hang on for the ride. Visa, another example of a badly timed sell, 400 shares went up another $20 from when I sold, there's another $8K. These were definitely bad choices. RIMM was another one. My pick since then, ISRG and FSLR have both flopped. HRP hasn't done any better... so far, not a good month.
I think this calls for a sit down and a re-evaluation of strategy going forward. Oh, trades of the day, I pulled in a little bit of Gushan Energy. I heard a little about this stock, decided to put up a small position in it, and see what happens. Let's see if this one is a flop or a not.
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