Wednesday, October 31, 2007

Halloween Recap

Well it was an enjoyable Halloween . Bernanke and company handed out candy to the bulls via a quarter point interest rate cut. Woohoo !! The market reacted with an initial dip which was great for me as I managed to buy a boatload of QLDs and SSOs on the cheap. See there was a reason for me cutting down a lot of positions the last few days. I wanted to take full advantage of today.

I believe tech stocks will continue to do well though I dumped FFIV at $36 today. Tired of playing with this stock. I will continue building up positions in AKAM LLNW INAP NTES OVTI and other tech names that are doing well. I think NTES may be the most undervalued play in China . Would not be surprised to see $40 by December 31st.

Speaking of tech, I also like SIRF. This stock was a steal at $16 a few months back. Too bad I did not take a position. I was planning on but brushed it off after reading their annual report. Thats why reading annual reports don't make much sense. Too much bullshit in there. Making money in stocks is all about price volume action.

And CROX finally took a beating today. At $57 I think CROX might be a decent buy. Trades at less than 22 times next years earnings. Pretty cheap for a stock growing this fast.

Tuesday, October 30, 2007


Thats right. Halloween is right around the corner. What will Mr. Bernanke have in store for us ? Thats the million dollar question . "To cut or not to cut ?" Half a point cut and we will get a good rally. Quarter point and perhaps a little upside. No cut and we will probably collapse like a stack of cards.

I think we will get some sort of rate cut. Bernanke has his hands tied. Credit market are in a tight spot. Long Gold and Silver are my plays for tomorrow. We got a slight pullback which allowed me to add to my GLD and SLV positions. I expect them to soar on a cut. Financials and Homebuilders should get a good boost too.

I continue to clean out my portfolio dumping out stuff like IBKR among others. When all is done I expect to be down to 25 positions or so. I'm tired of holding underperforming positions. Its time to add quality. I'm expecting a recession. I don't think the US consumer is going to be around much longer. The fall in home values added to increasing prices at the pump, grocery stores and retail establishments is pressuring the consumer. Once the layoffs pick up, the party will be over. No amount of rate cuts will save us. I think we need a good hard recession. Some hardship is good. Makes one stronger. Us Americans have become a lazy bunch, always expecting someone to help us out.

Well tomorrow is the big day. Everyone better be prepared.

Monday, October 29, 2007


The market looks fairly strong so far. Tech is doing well and the Nasdaq leads the way.

Oil continues to stay high partially due to rumors of war with Iran. I still think oil is peaking here. I believe we will see lower prices in the next month or so.

Fed meets on Wednesday and the market is predicting a rate cut. is a rate cut already priced in ? What happens if the Fed does not cut ? Those are two questions I am currently pondering.

I have dumped my position in SBUX. I think Starbucks has serious problems and will move lower in the coming months. I just don't buy their story anymore.

I have been adding to my positions in BOOM LLNW INAP MCHX AKAM MPEL NIHD QLD HANS this morning. I like what I am seeing with the above names.

I think CMG is grossly overvalued and will drop after earnings. On the other hand I could be wrong.

BIDU continues to move higher and it looks like $400 is on the cards. I continue to sell my position in small increments. I bought this between $95-110 and it has been my best gainer this year.

Friday, October 26, 2007

Pre Market Brief

Great earnings from MSFT and a positive outlook from CFC this morning have send the futures racing skyward. I expect a strong rally today and continuing into next week. I think the bears have had their chance to cover. Any attempts to bring the market down will only in further rate cut rumors sending the market upward. Microsoft is up over 12% in premarket and Countrywide is up over 21%.

I started building a position in NIHD yesterday below $55. Keep an eye on this one. There is still plenty of growth ahead.

Got into BOOM prior to earnings. Earning growth continues to be solid and I will continue adding.

I think financials are poised to rally today particularly the mortgage lenders on the back of CFC solid outlook. Brokers are alos a good place on the back of IBKR blowout earnings. Have been long IBKR since the IPO at $30. Added as it went lower.

I expect a very bullish trading session.

Thursday, October 25, 2007


Overall market is looking weak today. I expect strength into the close. Shanghai fell hard overnight. Gold and Silver are going through the roof in anticipation of a rate cut. Broker stocks are doing well too.

In IPO news ULTA is soaring. I am long. Got in at IPO price $18. Currently at $30. Will buy more below $28 ( if it gets there). I see $50 in 12 months.

I am adding to DFS. I cannot believe how low this one is. Should be a top 10 position by year end.

My NTRI position is picking up steam. We saw the bottom. I expect a strong rally in the coming days. I added more after hours and pre market today.

Buying some NIHD here. I've been keeping an eye on this. I think below $55 is a good place to take a position. Even if the company earns $3 next year which is 20% below consensus, at 25 x next years earnings this should be a $75 stock. I will keep adding each $1 this stock falls. We may see $45-50 but I think Latin American telecom growth cannot be ignored. I plan on making NIHD one of my top 5 positions.

Wednesday, October 24, 2007

Market Recap

In After Hour trading my positions in FFIV and NTRI got blown away. I was stopped out of half my FFIV position during regular trading hours. I like RVBD better and will probably buy some in the next few days. I will probably double up on NTRI because I don't think things can get any worse though I felt the same 20 points back ....

Lets break NTRI down. They will earn around $3 this year. At $25 a share that is a PE of 8.33. They will likely do atleast $3 next year if you factor in international growth . I figure NTRI will double its earnings in 5 years to atleast $6 a share. Even at a conservative PE of 15 thats $90 a share in 5 years. Thats an annualized return of better than 25%. To top it of, management is repurchasing up to $100 million of shares in the coming months. And Tiger Global management recently doubled their stake.

AKAM released earnings an beat by a penny. The stock was up a little in after hours trading. I believe AKAM should be trading at $45-50 and not where it currently is ($33.54). Having averaged better than 100% annualized growth over the last 5 years and and expected growth rate of 30% over the next 5 years I believe at even 30 times next years earnings ($1.66) AKAM shoud be $49.80.

NYX continues moving higher printing $90 today. I think $100 is close at hand and perhaps even $120 by years end.

AMZN got beaten up today. While hope is not a viable investment strategy, I really do want to see AMZN back at $50. People who paid $100 for AMZN are stupid. This is a retail play. AMZN will not grow at better than 40% annually over the next 5 years. Even 30% growth is pushing it. How can you justify paying even $87 for a stock that has earned 87 cents per share the last 12 months ? Even if AMZN does $2 a share next year which is 30% higher than consensus it still trades at almost 44 times 2008 earnings ! The only thing that keeps AMZN up is Bill Miller and Legg Mason. They own 20% of the company and are reducing holdings by half by years end. AMZN is an old lady and Legg Mason/Bill Miller is her walker. Take the walker away and the old lady crumbles.

The market appears to have put in a bottom today. Oil is looking toppy. A Fed rate cut is coming. The Bulls are hungry. The Bears defeated. I sense a strong rally tomorrow.

I continue buying SNDK. This chip stock has been beaten up for no fault of its own. Trading at 17 times 2008 earnings with a 5 year growth rate of 35% and expected to grow at better than 22% going forward, this is a great buy. I see an easy $100 inside of 3 years.

Tuesday, October 23, 2007


AMZN earnings beat was actually a disappointment. 19 cents a share does not quite cut it. Many investors were looking for a blowout something along the lines of 22 to 24 cents a share.
The stock is taking it to the nuts in AH trading down 10%. A beautiful island reversal beckons on the charts if AMZN continues sinking in the days ahead.

RVBD is getting punched around like Apollo Creed at the hands of Ivan Drago. RVBD is a buy as long as $36.50 holds tomorrow. Investors pay for growth and RVBD is a growth story. Earnings were great; guidance a little weak. No big deal. I'll probably take a position in the coming days. I've owned RVBD before. FFIV is down as a result in AH. Earnings are out tomorrow. I'm long FFIV.

Comcast admits delaying some subscribers traffic. Shame on Comcast. Who cares if people share files. The world has changed. Got over it. Either you keep up or get killed.

CFC has appeared to have started its second leg down. This stock appears it may ultimately fall down into single digits. CFC is dirt cheap and any one with cojones big enough to handle this volatility will have a pot full of gold a few years down the road.

LVLT was massacred today. Wasn't Cramer pumping this a few months back. Put a $6 handle on it ? At $3.24 it must be a case of 'back the truck up' right Booyah boy ?

I think DUG might be a good buy here. I think oil prices are topping out short term. Oil is sold in November and bought back in March.

I like having all this extra cash lying around courtesy of getting stopped out a multitude of positions. Allows me to relax, refocus and put money into winning trades. You always need 10-15% of cash lying around. Feels really good. The market could drop 30% tomorrow and I would still feel good.

And NYX is a BUY here. I feel a run to $100+.

Monday, October 22, 2007

Market Summary

Yes I notice I haven't blogged in 20 days. I needed a break. The damage was done on Friday. Was today a bottom ? I don't know. This is what I am doing. Actually better yet like me break it down point by point.
  • Keeping tight stops thus protecting profits.I don't like seeing 200% + profits disappearing on holdings like BIDU.
  • Hedging via SRS. The real estate sector stinks and will lead the way down during any pullback.
  • Raising cash. A lot of my stops have already been hit. I am out of OXPS LVS (Valuation) HANS (50% out) COGT GDX DDM SSO AKAM( 75% out) RACK .
  • Ready to deploy cash into QLD . As the market pulls back I am adding into QLD since the Qs are the strongest group here.
  • Watching GOOG AAPL RIMM CROX GRMN BIDU CMG SPWR carefully. These are the markets top dogs and their failure will ultimately lead us into a bear market.
  • Keeping an eye on the 10 year Treasury. At 4.39% I don't think we are heading into a bear. I need to see 5.5% plus before I push the sell button. Money is always looking for the highest yield.
  • Drinking JW Blue Label religiously. It just tastes so much better.

Tuesday, October 02, 2007

Market Commentary

The major indices did not go anywhere today though stocks as a whole did pretty damn good. The sector that impressed me are the casino stocks with huge gains in two of my holdings LVS and MPEL. Home builders powered upwards since they are heavily shorted and anything can send them rocketing. Ridiculous gains in HOV TOL KBH DHI BZH MTH RYL . I am thinking of adding SRS as a hedge if this craziness continues. Homebuilders will be a great short very soon.

Broker stocks have been doing well as of late. I sold out my GS position between $204 and $212 with a cost basis of $174. GS printed $228 today. It was a short term trade and I was ok with it. OXPS is the broker I love and I am long and will continue to hold till this prints $35 or gets bought out.

In the semis/chips, MU had a solid day though gave back some in after hours after a not so cheery earnings report. OVTI continues powering higher and I continue to stay long. This has been one of my best plays this year. I bought between $13 all the way till $18.

AKAM and LLNW put on a little show today. I have been pounding the table on AKAM for quite some time now and it looks like some big funds are taking notice. What you have here is a growth play that offers tremendous value. FFIV is another one of my networkers that put on a show. I like RVBD too. Its been strong the last few sessions. I owned this between $28 and $45 and am considering taking a position again here.

BRLC and JADE are in my dog house along with JSDA. I have strong expectations on these names in the long run. I could sell now , take the loss and buy later. The problem is these micro caps run so fast that by the time you notice them running up, they are already up 100% or more. All 3 are spec names and constitute less than 3% of my portfolio. So I am not too worried.

BIDU continues its crazy ascent. This stock is easily my stock of the year. I sold half my stake over 100 points back and this monster continues its climb. I am looking at taking more of the table because once again BIDU is creeping towards being my biggest position. I am trying to keep BIDU to around 5% of the portfolio but am failing miserably though I am not complaining.

Gold and Silver had a poor day. I sold a major portion yesterday after I felt a pullback was due. I didn't expect to time it so perfectly. I think I will hold of buying till next week.

The market looks like it wants to continue going higher. lot of skeptics out there. Nobody believes in this rally. The Dow will likely print 15,000 before year end. I think oil peaks here and heads down below $70 by end of the year. I would be long DUG.