Wednesday, September 21, 2011

Another MP short target

So the latest rumor is Frontier (FTR), MP member, has been targeted by shorts. The action of the past few days did get my attention. The volume was enormous and the price movement was ridiculous. This is one the shorts may regret going after with that hefty dividend. Their plan must be to send the stock down enough so the dividend is not sustainable, but that's a risky play. I'd buy more at $6 and a lot more if it fell significantly below that. 

The market is definitely in a bad mood that could last another 2 maybe 3 months, but this is the way things go - longs have their day and shorts eventually have theirs. It's times like these we dress up our portfolios and when times are great and it looks like they're will never be a down day, that's when we sell some.


Tuesday, September 20, 2011

Hold on to your hats, it's stormy outside

We went through this mid last year, where the market was ruled by the unruly. This is why we say over and over again, don't try to trade this market, but invest and be prepared to stay with your positions for a year or longer. Seems everything China is taking the brunt of the beating. Still waiting to fill our last three Model Portfolio spots. 

I wonder if the SEC is ever going to take our markets back from the hoard of speculators that have transferred billions in wealth from every day people to themselves? How many times do we have to watch coordinated attacks by speculators on small/mid cap stocks with low floats, sometimes destroying companies, before someone does something? 

Anyway, glad we're still able to collect fat dividends.


Saturday, September 17, 2011

Crazy week with crazy volatility

This market is up to its old tricks. Hedge funds are back with a vengeance and that can be seen in the volatility and high level of correlation between similar stocks. It creates opportunity, as times like these traders tend to throw the baby out with the bath water. 

Notable stories, Netflix (NASDAQ: NFLX), what a disaster. They actually thought they could raise prices 60% over night and not suffer defections. They must have been high on their own success. 

The story with RIMM is no surprise, as we've talked about their demise for some time now. All the people who thought they were getting a bargain at $30 should be ready to double down at $15. What a disaster. They had such a strong brand and squandered it. 

Been thinking about the last three names for the Model Portfolio and we have a few candidates, but can't decide yet, looking at wireless telecom, biotech, and China.


Wednesday, September 14, 2011

Novatel being dogged by shadowy figures

Some bodies have it in, not just for DANG, but for NVTL. I'm starting to see the most obscure articles written by unknown bloggers, even more unknown than PaperGains, being published on Google and Yahoo dogging NVTL. I thought there was a raid taking place in NVTL stock and I'm completely convinced now. The stock hasn't moved much as a result of these perceived negative stories, so I'm thinking in a few months they give up. Invest, don't trade and you can wait this stuff out and make good money. 

How about the HIG headlines lately. The upgrades are a day late to the party.


Saturday, September 10, 2011

Picking fruit from our trees UPDATED 10 Sep

10 Sep - I know we were reluctant to touch the insurers 30 days ago, because of European exposure concerns, but one of our old friends Hartford (NYSE: HIG) doesn't have much of that, so we're adding HIG to the list at $16.75 it's a bargain. We don't believe it or most of the other insurers fully recovered from the beating they took over the past few years. It's a solid name and has a 2.3% yield in here with book value over 40, we like it. While we looked at Genworth, there's still that uncertainty over the mortgage business and the potential restructuring down the line and no dividend to keep us warm at night. 

We're adding another combo play, Renesola (NYSE: SOL) at $2.90 and Trina Solar (NYSE: TSL) at $10.50. These two stocks will hold one position. This sector has been beaten down to the point of absurdity. I think the real problem is there are too many solar companies and many need to go away. There's tremendous upside here and very little risk over the next couple of years. It's dangerous picking just one, as who knows who's going to survive, so we pick two of the bigger, better run companies. These companies are running out of cash and they have the scale and management to outlast and out do the competition. Also, both these names are heavily shorted which could provide some lift on good news. 

That's 7 down and 3 to go. 

22 Aug - So DANG appears to have been targeted by short sellers. Got hammered today and I didn't notice it was on the Reg SHO/Threshold list until today (been there for a while). For those of us who can wait it out, we should see a nice pop, eventually.

20 Aug - Adding a combo play Dangdang (NYSE: DANG) at $7.90 and Renren (NYSE: RENN) at $7. This position will hold one spot in the portfolio, so it's a split. This is our speculative play and gets ups good exposure to the Chinese consumer and both companies increased revenues by over 50%. Some of the negative news around these names doesn't bother me as I heard the same stuff about Baidu and Ctrip and Sina.

14 Aug - Adding Frontier Communications (NYSE: FTR) at $6.95 and that fat 10.8% yield.

So Cisco (NASDAQ: CSCO) had a good quarter so in to the bag it goes. At this price, why wait. We're adding it tomorrow, say we pick it up at $14.50 given where it'll probably trade. We're also adding Petrobras (NYSE: PBR) to the portfolio at $26.50. This is the oil company of the future and this is a dynamite price.

Remember, we're going to pick 10 names and spend equal amounts on each. So far we have NVTL, CSCO, PBR, FTR, DANG/RENN, HIG, SOL/TSL. We'll summarize them when the list is complete.


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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