market speculation for October

[KTP]

Well, ok, I was wrong about AFFY and should not have sold my measly 900 shares, but I was right about the market in general and am looking pretty good sitting on cash while the DOW tanks. I guess not losing $30,000 in my larger portfolio is some consolation for not making a quick $3,000 or so on AFFY

Note: Even though I exited my microsoft position several weeks ago (thank goodness), I think it is stupidly oversold right now. If it goes much lower I am going to shift my cash into a lot of the actual stock (not options) as a super safe haven against further market collapse or inflation. I figure if Microsoft drops to a PE ratio of 5 or so, people will maybe buy some even if the market in general is doing poorly.

[gambler2075]

Well, ok, I was wrong about AFFY and should not have sold my measly 900 shares, but I was right about the market in general and am looking pretty good sitting on cash while the DOW tanks. I guess not losing $30,000 in my larger portfolio is some consolation for not making a quick $3,000 or so on AFFY

Well, AFFY was more of a fundamental play, and so I planned on waiting it out.
Anyway, I am still holding my 82,500 shares which are up quite nicely since the 5$ level

But we will see what happens.
g

[gambler2075]

Thx.
I figure since this board put up with my ramblings for a while I should tell them what I have bought. Remember that this is a speculative position... you could lose it all. Don't bet more than you can afford to lose.

That being said, I am long 72K shares of AFFY. It's here at 5.09 and the market has discounted the value of hematide, due to the slightly higher risks of death in the non-dialysis segment.

Looks like 5.09 was pretty much the bottom, lol... It's up almost 50% since this post, which I think slightly beats out any CD I have seen

But then again, it is not a profit until one sells, and it has run up quite a bit already. We will see.

g

[disneysteve]

Looks like 5.09 was pretty much the bottom, lol... It's up almost 50% since this post

So what's your next hot tip?

How do you decide when to sell? What about selling part of your holdings to lock in your profit and hang onto some in case it keeps climbing?

[gambler2075]

So what's your next hot tip?

How do you decide when to sell? What about selling part of your holdings to lock in your profit and hang onto some in case it keeps climbing?

I haven't found a next one yet... so I will continue to hold for a bit. Selling is a tough question, certainly it has gone from at least ridiculously undervalued to somewhat undervalued, but we will see...

g

[buildmybudget]

Gambler, are you essentially saying that you don't utilize fundamental analysis at all? Is it simply watching the news/media to identify a contrarian position that drives your trading strategy? I agree that the media definitely has a huge effect on specific stock movements, however I believe that you're much better off investing the Ben Graham way. I suppose I'm more like Scannner--somebody who wants to invest to grow with the company.

[gambler2075]

Gambler, are you essentially saying that you don't utilize fundamental analysis at all? Is it simply watching the news/media to identify a contrarian position that drives your trading strategy? I agree that the media definitely has a huge effect on specific stock movements, however I believe that you're much better off investing the Ben Graham way. I suppose I'm more like Scannner--somebody who wants to invest to grow with the company.

Actually I do do fundamental analysis, but I do it in a way that is very different than a long-term investor. When I do my FA I really look to see what kind of catalysts are coming up that can influence the price of a stock, in the near term.

As an example, a long term investor may look at a drug company and decide that a certain drug will have a billion $ market cap in 5 years, and that they will take 50% of the market in that time. They will then buy a stock and wait for 5 years.

I would look at the situation very differently and see if there is anything that is immediately coming up (i.e. AFFY is likely to publicize the results of their pre-NDA meeting with the FDA, stating that they can go forward with Hematide and file for an NDA application. This is a much more near-term catalyst, something that may be happening in the next couple of weeks, if not earlier.

Both are FA in a sense, however, they are on very different time frames. The trouble I see with the first approach (classical fundamental investing) is that things can change, or be delayed in those 5 years someone is waiting. The market can tank, taking the stock down.

As a trader I will rely on FA, but only to the extent that I can determine impending catalysts that will drive a stock price higher. My job as a trader is to put my money in a position where the price will appreciate the most in the shortest period of time. At all times, I have about 10 different bio stocks with different impending catalysts that I am evaluating, to see if putting my money there is better than putting in Affymax. The moment I make that determination, is the moment I sell AFFY and put it there.

g

p.s. Just to add an additional bit of info: I already know that most of my biotech stocks are massively undervalued. The tough question for a trader is when the retail masses will realize that a bio is actually oversold. For AFFY, it was ridiculously obvious that it was underpriced at 5$ per share, yet the retail masses did not realize that. The smart money was loading up at 5$ for the past few months, all while keeping the retail investor in the dark. Finally, when they had loaded up, they told everyone how great it was (by their recent upgrades). Will they take it higher? probably. Will it be a bumpy ride? probably. Is running up 50% in 3 days a bit much? Yes, but I believe in the 6 month time frame it is massively underpriced, so I continue to hold.

[Scanner]

ECU.TO was trading @ $1.34 today. . .I'm up almost 80% with my 5K in 1 month.

[KTP]

ECU.TO was trading @ $1.34 today. . .I'm up almost 80% with my 5K in 1 month.

Nice! grats.

I jumped back into some microsoft Jan 11 $26 calls the other day when they hit a low of $0.49 (who in the world sold at <$25 a share???). I only went in for 100 contracts this time, but sitting on almost a 200% gain right now. Gonna sell at 300% gain.

[KTP]

(I guess we really should change this thread to market speculation for 2010)

Obama caved and I bet this means 200 points on the DOW tommorow.

Microsoft should break 27 again, apple will probably reach some silly all time new high, I have no clue what AFFY will do, and silver still needs to catch up with gold so might add a few cents.

New prediction for Microsoft is $28 by end of year, running up to about $30 right before Jan earnings, then spiking to $32 before retracing back to $31, then hovering in the range of $29 to $32 for the next few months depending on the market in general. The April calls are too expensive right now though. I guess everyone knows Jan will be a blowout quarter.

I am selling these $26 Jan 11 calls when they hit $1.98 (paid $0.49). At that point, depending on how I feel, I will probably buy some April $29 calls if I can get them under a buck somehow. I think I will be smart this time though and rollover $5000 to a Roth and buy them with that money, then recharacterize it back to an IRA if I lose out, so no taxes due. If it goes to $32, then I will have a new $20,000 Roth for about $1600 in taxes. Or so that is my current plan. I have an additional $40K sitting in the IRA in cash from the previous speculation earlier this year.

[gambler2075]

AFFY has really annoyed me over the past week or so... I did end up selling 47K shares at 6.92 and rebuying at 6.22 but BofA kept timing out and I couldn't get out at 6.92 with my 35K shares. Regardless, I bought back and am holding 85K shares because I believe the company is decently underpriced over the next 6 months. Right now I don't have another prospect I am looking at, so I will probably be somewhat boring and hold for a bit. Maybe only for a bounce to high 6's, I dunno. It is coming close to year end so I may have to take some out for tax purposes... Currently up 450,000$ in trading profits (~175% ROI) for the 2010 tax year (if it ended right now) so I have to make my moves wisely.

g

[Scanner]

In all honesty, as much as I am a silver bug, I do have to concede to the Silver bears they have a point that it is overbought at this point and this "looks" like a bubble.

I think honestly, there is a 50/50 chance of it going up another 10 points or down 10 points at this point. The downside risk and upside reward are about equal and to me, that's really not a buy.

As an investor, I like about a 2:1 upside/downside risk/reward ratio before buying. It's a "Hold" of course, at 50/50.

The main risk to silver I can see at this point is interest rates rising and the dollar rallying as Europe continues to tumble, along with people holding it as a hedge to start buying stocks and selling out.

I have a bottom on my SLV and I guess I should consider puttign a bottom on my ECU at this point.

[Scanner]

PS: We should start a seperate thread: "Our speculations" since this has gone past October.

Everyone likes to talk about the speculative part of their portfolio and I have maintained a lot of us have (myself included) have ignored the "dessert" part of our menu and talk meat and vegetables here.

[gambler2075]

AFFY has really annoyed me over the past week or so... I did end up selling 47K shares at 6.92 and rebuying at 6.22 but BofA kept timing out and I couldn't get out at 6.92 with my 35K shares. Regardless, I bought back and am holding 85K shares because I believe the company is decently underpriced over the next 6 months. Right now I don't have another prospect I am looking at, so I will probably be somewhat boring and hold for a bit. Maybe only for a bounce to high 6's, I dunno. It is coming close to year end so I may have to take some out for tax purposes... Currently up 450,000$ in trading profits (~175% ROI) for the 2010 tax year (if it ended right now) so I have to make my moves wisely.

g

AFFY is back to the high 6 area again, and I am itching to take profits again. 5-10% in a week or 2 is tempting... we will see. All of the bios are bouncing like crazy these past few days, from ARNA to CHTP...

g

[KTP]

I know! If you had told me AFFY was going to bounce back and forth from 6 to 6.50 so many times I would have made a few $$$ swing trading it.

I have been keeping an eye on ARNA and AVNR, but I went long in a compnay called Vanda (VNDA). They actually have a real drug. Well, I guess so does AVNR, but it is just two common drugs put together.

I got into another company called SeaDrill (SDRL). I think they are well positioned to take some market share from TransOcean (RIG) while it deals with fallout from the Gulf spill lawsuits. Plus they are Norwegian run, which is cool. Not expecting a ton of gains, just slow steady creep up over the next few years (although it is up 4% from when I purchased it friday).