MoneyMiser Picks

Time is not my my side in this game, so...

Rating: 2.00 not yet rated(2 votes)    Vote:

You are logged in as | Logout

I'm dumping some stocks to get some cash. I'm a longer term value investor, so the short term rules are hampering my style somewhat. So it's time for some big adjustments:

GOOG, wow was I wrong about Google being a value between 500-550. Enough said. Also unwinds one of my 10% positions.

DFS, Discover card I thought was cheap as well, but not cheap enough.

JOE, on CNN Money's best of 2008 pick list, and also relatively cheap P/E wise. Just not moving enough.

TRN, I don't know what is going on with Trinity 's stock price. Anything below $30 is an entry point to start buildng a position in my opinion for a long term value investor. They blew away 4th quarter #s, but I guess the skittish traders are throwing the baby out with the bath water as they take the market down to more appetizing value levels. My 401k appreciates that, but not my SLO account.

So with that cash freed up...

1. I'm starting to add to my GS position. Goldman Sachs is poised to BLOW AWAY the street's earning estimates. Think about it, either there is one hell of a subprime skelton hiding in Goldman's closet, or they're just doing what they do best, make LOTS of money. My guess is they're making money. And with the stock about 1/3rd off of its 52 week highs, that's enough to peak my interest even more for a trade.

2. I'm adding to my MSFT position. Microsoft gets better no matter what happens with the Yahoo! deal. This is a relatively historic opportunity to buy a DOMINANT company, with significant moats. Emerging markets will have to upgrade their technology to advance, and who else are they going to buy it from?

3. Since TSO isn't working yet, I'm going to try the Oil services sector. Both Guy Adami and Pete Najarian have been pounding the Fast Money table at CNBC about BHI, and doing some of my own research I agree with them. First, Baker Hughes is close to their 52 week low, which leaves plenty of room for upside. Second, they've got a comparable P/E to Halliburton, but Haliburton is closer to their 52 week high. Third, with oil probably trading at $100+ per barrel for an extended period of time thanks in part to the Fed's decision to turn the dollar into toilet paper, more people are going to want to drill for oil.

I'm still long term bullish on Tesoro. The crack spread eventually must narrow again, and people will still do some driving this summer. That should help the refinery biz.

I'm really tempted to double down on NTRI. They got ANNIHILATED unecessarily in my opinion. Mr. Market had a panic attack of epic order, and this is a long term 300% potential return over the next 5 years. Why? Does America have an obesity problem? Yep. Who's advertising more than jus tabout any other weight loss program? Nutri-System. And they grew the number of MEN on the program, which is traditionally difficult. I probably will not add any more though, due to the short-term nature of this contest.

GLD continues to go left to right as Dennis Gartman would say. I don't see any reason to cash in on it yet.

CSCO is on the right track (finally), and if things continue my big bet on them will pay off. Now the big question becomes will ORCL follow? The CEO's insider selling last month at virtually these same levels worries me, so I'm going to hold back for now. Tech is acting very weird so far this year.

I think the Aluminum names like Alcoa and Kaiser Aluminum, have room to fall. These names have become 2 month trading vehicles in the past year if you look at thier charts. Perhaps some of the blame for that is on the Rio Tinto deal/no deal. Get Howie Mandell on it.

Comments: 1

Short Term capitulation

Rating: 0 not yet rated(0 votes)    Vote:

You are logged in as | Logout

OK, I think Bear Stearns has caused short term capitulation. We saw GINORMOUS (Technical term) volatility, relative to what we've seen in the year so far. Take a look at the VIX. Longer term, we probably will need to hit 1100 or lower on the S&P 500 before we see the beginnings of a true turn around. 1100 being about 30% off the all-time high set back in October of 2007.

Bear Stearns is now the official scapegoat for the Sub-prime mess in the investment banks. God help those poor employees at Bear Stearns who just got the floor taken out from under them. I wish I had owned JPMorgan, good God that was a steal of a deal. Just the real estate alone makes that deal just about worth it.

Does this mean there's a short term floor in for the financials? For some companies, probably. Other than JPMorgan, probably Lehman, Citigroup, and maybe Morgan Stanley. All have gotten beaten down, with Morgan Stanley not being "quite" as beaten down imcomparison with that list. JPMorgan's bounce, in combination with an expeccted Fed rate cut of between 75 and 100 basis points (If you believe the futures markets) could provide a very short term bounce for the financials (2 days or less). I'm not sure if the fed rate cut would help more solvent banks like USB (Bufffet's bet) as much as those who've taken it on the chin. Citigroup is still the largest bank in the U.S. #2 I believe is still BAC. BAC and Capital One have credit card problems, so any fed rate cut probably won't help them that much. Wachovia also has some credit card exposure, but not nearly as much. So Wachovia could get a medium bump. Overall, I think Ciitgroup is the play if you think a fed funds rate will provide a very short term boost for a trade, but be prepared to move out quick if you get a bounce of more than $1-2 per share. I may start building a small position in Citi.

Speaking of financials, if Goldman Sachs doesn't blow the cover off the ball with earnings this week, we're in for an extremely rough ride in the investment banks. I'm betting they will come through though. Add in the psychotic Mr. Market's deep discount on LEH, I'm starting a new position in LEH, and adding to GS. How long I'll hang on to these trades, I'm not sure. LEH , probable not more than a 10-15% move up, due to the fickle nature with this market and the financials.

Have you seen the price of gas lately? AAA says America, and regions across the country, are hitting new gas price records nearly every day. We've got a confluence of events happening that makes the refiners very attractive:

1. Oil taking a dive (please go down A LOT more)
2. Summer driving season coming - yes America will still drive even with $4.00 gas
3. Maintenance cycle
4. Extremely cheap P/E ratios, and other valuations relative to their history (with many refiners at or near their 52 week lows)
5. Currently "high" gas inventories giving the illusion that supply won't be a problem, when as we all know, people will get scared when refinery utilization rates fall between 82-86%, which is almost always bound to happen during the maintenance cycle

With all of that as background, I'm doubling down on TSO. Why them and not Valero? Well, the stock just took another 10% hit today (Monday), their stock price is low compared with their competitors, and their P/E is VERY attractive. I believe you get the most bang for your buck on a refiner move with TSO for this game's purpose, than paying a higher price for Valero.

Hello CSCO, how are you :-) I knew you'd come around. Now if you could kindly kick INTL, AAPL, NVDA, and MSFT in the rear, and bring them along with you for the ride, my game portfolio would really appreciate it.

A special rant about NVDA: I don't know how the #1 graphics card maker in the world is losing so much in their stock price. The don't just have a moat, they have a virtual ocean between themselves and anyone else. When the NASDAQ turns around, this stock will soar.

EMC, EMC, EMC, oh what you do to me. $14.47 and falling. I don't know, man I really don't know what's wrong here. Relatively good earnings and guidance. Sigh. Between you and Amazon, I don't understand what's going wrong. I don't know how much longer I can fight the tape on this for the purposes of this game. In a real account, I buy, and won't look back, then buy some more when prices get cheaper.

BUD, no St. Patrick's Day pop is disappointing. Long term, this may prove to be an entry point. But for the purposes of this game, the lager is weighing me down.

PCP's stock price is on acid. Again, same situation as BUD probably. Long term hold, but I'm not certain for this game.

NYX is also disappointing. I guess people are afraid that fewer trades will happen as the economy gets worse.

The one thing I learn more and more from this game is just how far in the future that "Wall Street" looks when pricing stocks day to day. With NYX, they must only be looking 6-9 months down the road. I feel this price is a quality entry point for longer term investors. But I guess I'm not much of a trader.

So, time to get rid of some stocks to free up some cash. With great long term regret, I'm selling NYX, NTRI, EMC, AMZN, NVDA.

GLD is still working for the obvious reasons. YUM is proving to still be a quality play in the fast food sector. YUM's overseas growth is probably contributing more than some expected.

BHI is disappointing me so far, but I expect a turnaround.

Comments: 0

Time to bob and weave

Rating: 2.00 not yet rated(1 votes)    Vote:

You are logged in as | Logout

Well, that worked.

LEH, up nicely. Too bad I didn't buy Monday, but for some reason whenever I try to log into Marketrocracy during the day, I can't get in.

Well, time to take profits, and dump LEH at the opeb, C at $21.00, and GS if it hits $180. I believe all of these stock have some upside to them, but I am not certain how long that bullish sentiment will last (probably until after 11:30 a.m. on Thursday). So I'm taking my profits and running.

Running into Morgan Stanley. The fall of Bear Stearns (God help those poor employees) means great things for Morgan Stanley, as Guy Adami pointed out on CNBC's Fast Money Tuesday night. MS competes with Goldman Sachs for best investment bank status, and they should get a longer "short-term" bounce when MS reports before the bell Wednesday morning. Either way, this is a one day trade for me here. Bob and weave.

VISA IPO has me all geeked up (technical term). Larger than Mastercard, and they priced above the range!!! Some predict a 10% positive move once the stock hits the street Wednesday morning. I'm a bit more optimistic. I forsee $60 per share by mid-April. Mastercard may fall a bit because of it, or more likely American Express and Discover Card will get schlacked even more. I raised cash sellng some losers Tuesday morning into the rally specifically so I could put down a $150,000 bet on VISA. This will make VISA the largest part of my portfolio. I missed out on Mastercard, I'm not going to miss out on VISA, and I think a lot of other people will have similar thoughts, and bid up the stock big time.

CSCO needs to keep chugging along. My patience in it, AAPL, INTC, and MSFT are finally starting to pay off. I'll take slow gains, as long they remain overall bullish.

TSO showed signs of life today, as I predicted for a while now. I think it's a hold for the amount I have invested in it, until at least May.

YUM continues to stay yummy. China must feel like chicken every night. YUM's foreign growth numbers are spectacular. Hopefully they continue the strong story.

BUD on the other hand fizzled. Up less than 1% on a day like today is very disappointing. I'm seriously thinking about dumping it, and finding something else to pu the money into (for the purposes of this game only).

GLD is an intersting story. Jeff Macke advised dumping it as a trade on Fast Money. I'm not sure that's such a good idea, given the devaluing of the dollar that the fed rate cut will cause once things settle down. I'm not certain how high Gold will get, but I think GLD is a buy on dips. Still love Macke though.

AMAT got an upgrade today. Caris & Company cited thin film solar profits for boosting their taget price to $27, and moving to a buy. I'm starting a position.

Also interesting, UBS upgraded CSX to a buy from neutral. UBS placed a $66 price target on it. CSX set a new 52 week high today, and profit taking was going on after-hours. I'm keeping an eye on it. Railroad stocks may be overdone in the short-term.

Comments: 0

Bad timing

Rating: 0 not yet rated(0 votes)    Vote:

You are logged in as | Logout

Well that's 2 days in a row where orders didn't execute at the price I wanted. And my Morgan Stanley trade suffered because of it. I don't see the financials rebounding in the short-term from the profit taking today, so I'm selling MS.

Well looks like Jeff Macke was correct on GLD. I was wrong. Dennis Gartman is major league worried, so I'm dumping my GLD.

There are a couple of intesting trades to be had due to stocks nearing their 52 week lows:

Verizon & Merck.

Verizon's news that they'll open their network up to more devices may be a long term bullish move, given their video downloading dominance. I'll but on that news.

Merck, well it's been beaten down, and due for a short-term turnaround. Pete Najarian likes it as well. So I'm in for a little bit of Merck as well.

FCX is interesting because of the pummeling it took todya as well. Guy Adami said on Fast Money that the psat few times FCX dipped into the 80s it was a buy. With an 11% move down just today, I think that offers a nice speculative cushion to begin building a position. I'm dipping my toes for $10,000 of FCX in the SLO2.

Which is more intersting: Monsanto down nearly 12%, or Potash down nearly 11%? Either way, they're starting to come down to buyable levels.

Down seems to be a recurring theme, so I'am beginning a DOG position. I should've put it on yesterday, but oh well.

Altria looks like it might be a fairly safe defensive play here around $70. So I'm in.

Also, BUD looks like its getting close to turning the corner. I'll double down on my BUD position.

I'm not certain if I should be disappointed in myself for not selling my YUM position today. It lost half of what it's earned for me today, but everything is volatile as heck these days.

I also spotted what I believe to be a bit of a bargain in a forum favorite. Sirius dropped to $2.75 last week. And just about any time it dips below $3 it's a buy, so I'm in for a little bit, nothing too much though.

I think I've identified a trading range for Ford as well. I'm waiting for a triple confirmation signal before getting in though.

Comments: 0