Tuesday, April 28, 2009

Dendreon Day/Crooked Business! Updated

(At risk of this becoming the Dendreon blog, here's another post. The stock is surging today ahead of the data announcement. The news is said to be out at about 11am pst, but I suspect it will be leaked before. Stock isn't halted yet.) That was my post before the looting began! What a scam! Someone raided the stock at about 10:25 am pst for about 2 minutes.

I happened to be watching and I was shocked, to say the least. In my opinion, this was a heavy short position allowed to get out at a low price. If you used stop loss orders and were stopped out, then you learned a very important lesson - for 'all or nothing' stocks, don't use stops as they are meaningless. Remember, just because you put a stop order in at 20 doesn't mean you get 20.

By the way, there was a very suspicious post on one of the message boards at around 8:30am pst. Someone said there would be a bear raid on the stock at about 10:30am pst. There are crooks among us.

Who's going to do something about blatantly illegal acts like this? Who's going to protect the retail investor.

Show your outrage by contacting the enforcement arm of the SEC at enforcement@sec.gov

disclosure long DNDN

"How can you protect us from Bernie Madoffs if you cannot protect us from what happened today???

I feel morally obligated to bring to your attention a crime I witnessed today yet sanctioned by the NASDAQ. It is my sincere hope that you will review the information I have taken the time to present below and consider your duty and responsibility to respond appropriately.

Just minutes prior to a trading halt at 1:27 PM today in Dendreon (NASDAQ: DNDN) for the public release of trial data on their revolutionary drug, Provenge, an orchestrated raid on shareholders took place taking the stock from the mid-twenties to under $8 in less than 70 seconds. During that 70 seconds over 4000 trades for over 3 million shares were reported to have been made ( http://www.bloomberg.com/apps/news?pid=n... ) suggesting to me that this was orchestrated and forced onto the market and not part of the normal market forces that drive a stock. Certainly, such actions are beyond the capability of the retail market. When the stock resumed trading later in the evening it had returned to the mid-twenties, but the damage had already been done.

For many small investors who are careful to invest their savings, stop losses had been placed to protect their investment from too much erosion in case sentiment changed. However, the rapid execution and manipulation of the stock prevented those shares from being filled at a reasonable level as these stop loss orders activated and issued market sell orders. These market sell orders actually pooled with similar unfilled orders causing a cascade of falling prices hitting more stops and forcing more market orders onto the market. I have no doubt that whoever orchestrated this manipulation did so to scoop up those shares at bargain prices as opposed to where the market had been trading just seconds earlier, essentially stealing the hard earned equity of these smaller investors. And, as the stock returned afterhours to previous highs for the day, the profits that rightfully belonged to these individual investors were also stolen.

Analysts and journalists commenting on the story were dumbfounded to explain the trading action and reluctant to offer their theories openly. And, after a brief investigation the NASDAQ quickly announced that all trades would stand leaving all affected investors with no recourse. However, I am writing to you in the hope that the Obama Administration represents a new ethic for the nation and for Wall Street and that a sense of responsibility exists to investigate this incident and publicly report on an explanation.

Although I was not affected by today's trading manipulations, I see what happened today as one of the most outrageous and obvious attempts by professional traders to game the system at the expense of smaller retail investors. And, a more thorough investigation would go a long way to building back confidence in the markets for small private investors and reform what I consider to be a very corrupt system that favors hedge funds and professional traders at the expense of individual investors!


Thursday, April 23, 2009

Here We Go Insurers

Some of the talk has died down related to the insurers and I think it's because they're about to report. I expect the insurers to report much better than expected numbers like I expected the large banks. To bring up a previous point I made; market volatility has come way down, so I expect insurance portfolios to look much better than they did just a couple of months ago.

Just look at the performance of MetLife (MET), Genworth (GNW), Hartford (HIG), and Aflac (AFL) over the past two months. The last two are on my 'Model Portfolio list. We were led to believe that most large insurers were about to have a going out of business sale any day.

The smart money knew the truth and the smart money jumped in when it seemed darkest. Hartford and Aflac have almost tripled from their lows! I expect these companies to report much better than expected numbers and I'm willing to go on the record before it happens.

As the market continues to move up, and yes, I believe this rally has legs into early Summer and as long as I see more than a few talking heads saying the rally is over and continue to use scare tactics on the general public, I'm bullish. Sounds too much like people missed the rally and want a chance to get in. Have you noticed the pull backs are becoming more and more brief. Not like a few months ago when the bears could mount a rout that lasted a week or more.

Disclosure: Long HIG, AFL, GNW



Sunday, April 19, 2009

The Vix

Stock Tables - 1 year
It hasn't gotten the press it got on the way up, but the Vix has come down under 35 after going through the ceiling over the past few months. This is a real good sign for the market and for investors. I heard someone talking to one of the talking heads about how market volatility is good for investors - WRONG! Market volatility is good for traders.

The market has moved up nicely over the over the past few weeks and investors have benefited as the volatility has come down. Actual investors don't want to sit in front of a monitor guessing where the highs and lows are. The data shows that retail investors lose when they do this. Besides, that behavior isn't what we call investing, but trading.

Not long ago we were seeing wild swings, down 350 points, then up 200 points, all within an hour. Retail investors/traders tend to buy high and sell low when the markets swing wildly. The typical behavior is to get scared and sell when the market is down hard, then turn around and buy high believing they're missing the rally only after the market is up big. Sound familiar?

If the Vix stays down under 40 and should it get under 30 and stay, investors will see nice returns in their properly allocated, well diversified portfolios.

You can find the Vix on the right side of the screen.



Tuesday, April 14, 2009

Dendreon Updated

As you know, Dendreon (DNDN) reported on 14 April that the Provenge trials were successful! Now investors should be thinking about fair value for the company. Although the company says they are going to market the drug themselves in the US, it's good to have an idea of what the company is worth. My value for the company is $10 billion which is about $101 per share.

I get that number through comparative analysis. Remember ImClone. They looked a lot like Dendreon before they were purchased. They had a different approach to cancer and had one main drug and I believe another. They're pipeline would have been good too, had they remained a seperate company.

ImClone was purchased for $10 bil which was about 10x sales, as they had about $1 billion in sales. Analyst estimate Provenge would be good for about $1 billion in sales early on.

I believe if Dendreon isn't purchased and brings another drug to market, as they've talked about colon and breast cancers, which would be huge, the company could be the next Amgen, Biogen, Genentech 10 years from now.

Of course this assumes they get FDA approval, which should happen.

By the way, looks like the previous poll was right on, as 86% of you said DNDN would meet or exceed the desired Provenge result.

Recent Dendreon news.

Market Watch Story

Health Care Hospitals PRN Story

New World Investor Story

Seeking Alpha Michael Murphy Story

Market Intelligence Story

Care To Live Story

UK Story

Market Guardian Options Story

Xconomy Story

WSJ Article

Hot Stocks Story

Dendreon & Hedge Funds

Disclosure long DNDN


Sunday, April 12, 2009

Mutual Funds

Getting away from stocks for a minute, I thought I'd bring up a few funds that I like. For the record, I believe most retail investors should have the majority of their assets in mutual funds. I like China and South America, so the funds I like tend to be focused there.

Mathews China MCHFX and Fidelity Latin America FLATX. I've done well in both of these funds during bull markets. They tend to track those markets pretty closely which is important. It irritates me when I buy a fund and the tracking error between the market is says it tracks and the fund is huge.

These funds tend to be in the big names in those markets, so you get exposure to many different stocks you might buy anyway, but at lower costs.

I also like Janus Overseas JAOSX. This is a very good overall overseas fund. You may notice that my top 3 picks are overseas, so for anyone within 2 or 3 years of retirement might want to consider the risks associated with these types of investments before investing a substantial portion of your portfolio there.

Remember, two of the most important things to think about when evaluating a mutual fund besides how it fits in to your plan and expenses, is how it performs compared to its benchmark (and peers), and are you actually getting what you think you're getting. So if you're buying an Indian fund, but it doesn't track the Indian market, that may not be a good fund for you.

Disclosure, long MCHFX



Friday, April 10, 2009

Previous Dendreon Provenge Poll Apr6-Apr10

On the question of whether or not Provenge would meet/exceed the 22%, 245 (86%) said yes and FDA approval, 21 (7%) said no and no FDA approval, 17 (6%) said something other. This was pretty predictable from my point of view.




Genworth (GNW) has become a favorite stock of the day traders/hedgies and even retail traders. They announced on Thursday that they missed the TARP/CPP deadline. In my opinion they didn't want it (after further review). I don't blame them. I don't think they need it. At this point it was all psychological and made investors feel better. But after all the scrutiny, rules, and pink people with banners, don't take it if you don't need it.

In the short run (very short run) it hurts the stock - think 2 day event. In the intermediate and long run it's best. Don't forget, that money wasn't free or cheap and now banks that can, want to give it back. They probably didn't really want to buy that bank either. Who wants to buy a bank right now, especially since any bank you buy now is a troubled bank.

I see their action as a back door way of saying no thank you because I have to believe they would have made a bigger stink and would have made sure the paper work was good to go and on time if they REALLY needed it.

I'm sure the professionals will use scare tactics (again) to create more volatility in the stock following this news, but keep your eyes open. The company isn't going out of business anytime soon.

I found it rather humorous to read the Citi analyst criticize management and basically call them incompetent. It's hard to take anyone over at Citi serious or most any bank when they critique management at some other company.

Disclosure, long GNW.


Sunday, April 5, 2009


I felt compelled to post about the company, as it should prove to be a pretty volatile month if Friday was any indication of what we can expect. I tend to believe the last FDA decision was more political and thus I think they'll get the approval this time assuming they meet/exceed the 22% threshold. I also think they get to 22% this time around like last time. Comments?


Previous Market Poll Mar 30-Apr 3

Results of a recent market poll, Did we hit bottom? 345 respondents, 20% said yes we hit bottom and now the market heads up, 27% said yes we hit bottom and now we move sideways, 53% said it was it's a suckers rally/head fake and we're headed back down.


The Vix

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Where we rant and rave about the market and of course give our opinions on stocks we love or hate. We're not advisors and urge you to conduct your own due diligence.

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