Saturday, June 7, 2008

Off to Berlin... Placing some trades...

I'm heading off to Berlin for a few days. I'll be back next Thursday, but I'm interested in a few things I think might happen.

So I'm placing two REED orders. I sold mine today 1000 @ $2.55/$2.54, profiting $217 on my initial purchase of 1000 @ $2.34/$2.32. (Since there is such low volume on REED, you can't typically complete your entire order for the price set. When my SELL triggered today at $2.55, there were only 500 bids at that price; the BID then shifted to $2.54 leaving me with an extra 500 shares. I moved my sell order down to $2.54 to move them and they sold.)

My order book also has some Tessera in it since it's due for a bounce. Their Amkor arbitration is hitting on June 10th, so I'm watching to see what happens there. I think they already won and are just determining settlement stuff but that's a big deal and if it's great news, we'll see a huge spike. My play is a mid-term, but if it doesn't auto-sell by the 10th, I'm going to cancel a sell and/or buy it if it didn't trigger to begin with. We could see a $5 (20-25%) bump on good news about this.

I am also still in 40 AAPL @ $184.35. Watch to see what happens on the 9th with iPhone chatter. I don't know how much of it is priced in but I think "amazing features" and "available immediately en masse" could be enough to push this past its support. There's been chatter of it for months but the steady increase hasn't been related to pricing in on that. I think it can break $200. Let's see what happens.

Here's my order book:







TIME
DESCRIPTIONSTATUS
6/7/08 04:21:07
SELL -250 TSRA STP 14.00 GTC TRG BY #48238739 OCO #48238740WAIT TRG
6/7/08 04:21:07
SELL -250 TSRA TRSTP MARK-.17 MARK GTC TRG BY #48238739 OCO #48238740 WHEN TSRA MARK AT OR ABOVE 19.65WAIT TRG
6/7/08 04:21:07
BUY +250 TSRA TRSTP MARK+.17 MARK GTC WHEN TSRA MARK AT OR BELOW 18.75WAIT COND
6/7/08 03:14:22
SELL -1000 REED @2.55 LMT GTC TRG BY #48238495WAIT TRG
6/7/08 03:14:22
BUY +1000 REED @2.10 LMT GTCQUEUED
6/7/08 03:12:47
SELL -1000 REED @2.50 LMT GTC TRG BY #48238484WAIT TRG
6/7/08 03:12:47
BUY +1000 REED @2.25 LMT GTCQUEUED

Friday, June 6, 2008

REED woes and cheers...

So I watched REED tank to $2.00 the other day. I held on, knowing it'd bounce back. But I didn't buy my belief: I should've bought in another 1,000 shares in if I really believed it'd hit the $2.50 range and average in. Instead, I just sat back. It bounced up to $2.47 in the mean time. Bad call; would've been up $470. Can't let that slip again.

Once it breaches $2.50, I'll sell. And once it hits $2.10-$2.25, I'll buy in again. This one might be my new fun time.

I'm also in AAPL, 40 shares @ $184.something. I'm hoping it pushes up past the $190 resistance we've been seeing.

Tuesday, June 3, 2008

Next time, read the damn email... (Wanting AAPL, can't buy...)

So thinkorswim has been bugging me about getting my signature card in. I haven't done that since I established my account and I guess the USA PATRIOT Act requires that. So I got this charming message when trying to buy 40 shares of Apple: "On this account you cannot open new positions." Great.

Time to send the card in. Also, time to hold Apple for a medium play. Their price targets are in the $225 range and they're about to announce something big—almost everyone assumes the 3G iPhone. This is only good news, since there's no gap 'til profit as there was with the last iPhone announcement. It's only going to further entrench the brand with an already successful product. And I think it could surge past $200 and stay that way.

I want to buy in at the $185 point (which is hilarious, considering my first trade was to buy a single share of AAPL @ $123.35 three months ago... Man.

Friday, May 30, 2008

Touching the stove with REED...

I have that nagging feeling that I'm about to do something absolutely. fucking. stupid. I'm setting up an OCO bracket on a penny stock, complete with an idiotic trailing stop. Issue: Trailing stops won't trigger properly with such low market volatility. Issue: I don't want to set a simple sell limit, in case it maintains upwards momentum. Issue: I won't be babysitting the order at all. Issue: I'm completely stupid.

Order:
BUY +1000 REED @2.35 LMT GTC WHEN REED MARK AT OR BELOW 2.35
SELL -1000 REED TRSTP MARK-.05 MARK GTC TRG BY #4510 OCO #47304511 WHEN REED MARK AT OR ABOVE 2.60
SELL -1000 REED STP 1.05 GTC TRG BY #4510 OCO #4511

Wish me luck. Watch what happens to $2,350 worth of cash here, eh? My emergency stop is set damn low, below its 52-week low of $1.50, but it hit that only two months ago. It spiked shortly after, saw by some as a great price I'm sure, but has steadily slumped back into the $2.30 range.

Still, the bounce of this stock is impressive: from $2.25 to $2.85 in about a week.

Let's see what happens.

Thursday, May 29, 2008

What's up with Berkshire...

I exited Berkshire Hathaway about a month ago because I was growing impatient and liked to see more movement. Ironically, I'm now trending towards more medium-termed plays, but I'm looking out for short-term/day-trades that will work, too.

Berkshire slammed down into the $4,035 range last Thursday, a support that it had broached the Friday before that before rebounding about $90. It's a pretty clearly established support; it hasn't dipped (more than 1%) below $3,900 since it first passed that point August 20th, 2007.

Clearly, a lot of people are recognizing it as a good time to average in for the long haul. BRK/B hit $5,059 in early December but started to slide real fast from that resistance point. It's probably closer to it's market-based "intrinsic value" at the near $4,400 mark, but I think it could easily continue on upward and break $4,600 next week. I'm not putting my money where my mouth is, but let's just watch what happens over the next week or two.

Things have been very busy at work, but I'll be getting back into this more and more over the next couple of weeks, as I'm consolidating my Scottrade and Thinkorswim portfolios. (I work at Phoenix, Arizona Web Development firm Synapse Studios as my day job. See my blog there.)

Thursday, May 22, 2008

MOS hurts, TSRA heals...



So MOS shot back up, but my stops triggered properly and it only hurt me something like $40 or $60. Or something.

I initiated a fun TSRA play last night:
BUY +250 TSRA MARK+.10 WHEN TSRA MARK AT OR BELOW 18.55
I've stopped setting flat out limit purchases. The common wisdom is to never buy at MARK but to always place a limit order and wait for the market to come to you. Anything else is chasing and can be real trouble; you can almost always get a better price.

With a stock as volatile as TSRA, though, if it starts the day by shooting straight on down, it can be painful.

Say TSRA opens at 19. You have every intention to buy at 18.75. The market opens and it plunges downward, to 18.75, where your LIMIT order triggers. It then continues on its downward march to 18.35, before turning around. Here's the issue: Every penny below your purchase price is a penny you must now make back UP in order to come close to profitability.

One defense against this is the trailing stop on the BUY side with a threshold trigger. I set a trailing stop of 10 cents, only once it hit 18.55. What this means is that I can expect to pay no more than 18.65. But what it further means is that if TSRA is intent on tanking early on, I won't buy into a downtrend. My trailing stop will follow it on down, until the momentum shifts by 10 cents.

Now, on a very volatile stock with considerable spikes and lags, you can easily have a stock drop 40 cents, gain the 10 cents needed to trigger your buy order, and then promptly resuming its demise. I've had this happen. Twice. It then promptly ran into my STOP and sold me out, causing me to loose twice in a row. Things to carefully consider then: set your trailing stop level at something intelligent, based on a stock's tendency to spike and lag and its typical volatility. Truthfully, 10 cents is probably too anemic, but going much higher than that results in lost profitability; every cent the stock has to regain before you buy in is a cent you don't earn profit on.

Further, set your emergency stop further out. I should've had mine at 17, but I figured 18 wasn't going to happen. I was very, very wrong. And sad.

Yesterday, the stock started at 18.69 and started its way on down. It hit a day low of 18.33 before turning sharply and heading on up. It gained 10 cents and my trailing stop triggered in and I rode an amazing little wave on up to $19.90-ish, before it caught a lag back down to 19.74/19.55 and sold me out right about there. Still, on 250 shares, that was a profit of $272.

I'm doing something nearly identical today. I won't touch it if it doesn't bounce up at all during the day; my emergency stop is set for 17 and I think that's been a healthy support level and if it hits that, shit's hit the fan already. But holding it for a day or two is smart; it'll touch on 20 again and then back back off. A stock like this is volatile yet generally so within a range and relatively predictable. Naturally, I can get myself burned with too cautious stops or bad trailing stop levels, or if the unthinkable happens and big news causes an epic gap. But for now, it's fun and a potentially good play.

Tomorrow's order:
BUY +250 TSRA TRSTP MARK+.10 MARK GTC WHEN TSRA MARK AT OR BELOW 18.55
SELL -250 TSRA TRSTP MARK-.16 MARK GTC TRG BY #46617 OCO #4661 WHEN TSRA MARK AT OR ABOVE 19.45
SELL -250 TSRA STP 17.00 GTC TRG BY #4661 OCO #46617

Tuesday, May 20, 2008

MOS Short Selling...

I've got to head to bed real soon so I'm going to keep this short. My brother loves Mosaic, a fertilizer company. Their performance is tightly bound to Potash prices so it presents an interesting study. Every time they've had a 4%+ drop in the past six months, it's been followed by another nearly 4% drop, at least in the intraday.

So I'm banking on that happening again.

Here's my play:
Sell -39 MOS @ 122.75
Buy +39 MOS STP TRG+126.00
Buy +39 MOS TRSTP MARK+1.50% WHEN MOS MARK AT OR BELOW 120.00

Maximum loss = $126.75, excluding any gaps and commissions.

Friday, May 16, 2008

Back...

Sorry for the lack of posts. I'm still jet-lagged. Got screwed by two Tessera plays that triggered and fired straight through my fucking stops. Lost about $160 on each, twice. Then watched it hit $18-ish after a dip in the $17s. Placed a buy order at $17.75 that never triggered because it shot through to almost $20. Hating it a bit about that right now.

Will be getting back into this way more actively next week. Liquidated Scottrade. Thinkorswim 4 life, etc.

Sunday, April 27, 2008

On Vacation...

I forgot to post that I'm actually on vacation right now, on a cruise ship for about 2 weeks. I made a QQQQs play, looking for it as a long-term. Overbought, so that I was on margin, had bought at the dip, caught that I was in margin while at the airport, sold it off in afters for about $120+ profit.

I made some on my MOS play.

I'm watching V break its initial resistance. $100 by August, anyone? (I don't own any, though...)

And I have a standing bracketed OCO order for TSRA when it hits $19.45, stop at $18.85, trailing stop set to trigger at $21.25 for 17 cents. We'll see if that plays.

If you don't see any movement here, that's because I'm gone til May 13th. Cheers!

Thursday, April 24, 2008

Long TSRA, Short MOS, missed on AAPL

So I bought 20 AAPL at $162.60 right before close yesterday. And then I watched it spike amazingly to the $171 point in after-hours. And I didn't hit sell. As I was walking around the office a few minutes later, and then back to my desk, I was wondering why I hadn't at that point. By the time I had come back, it had gone from a ~$160 profit to ($133). Awesome. Ended up leveling out, but I don't want to hold it long.

I've loaded up an interesting play in Mosaic Company (MOS). They had a rough day yesterday and a quick look at their 6-month charts shows that every time they've had a pretty rough day, they've continued to slide the next day, sometimes to much greater effect. But they've always bounced up enough to trigger an upper-limit buy-to-cover, so I've pushed it up a bit high.

My order looks like this:
Sell -20 MOS @ 131.50 LMT
Buy +20 MOS STP 136.00
OR
Buy +20 MOS TRSTP MARK+.10 WHEN MOS MARK AT OR BELOW 129.00

Basically, I want to sell short almost immediately when the market opens. If the stock turns around and spikes up to $136, I'll buy to cover my position, total loss: $100.

If the stock flies through the $129 mark, a trailing stop will take effect such that if it rebounds by more than 10 cents at any point, a buy to cover will take effect and lock in some profit. If that hits, minimum locked in profit: $49 or so.

Might turn out that I'm fucking up how I place limit orders with shorting, but I'm learning the platform and figure my stops are in place to protect me from my own stupidity.

This will be my third roundtrip if it executes, so it's a good thing I'm leaving. I need to liquidate my Scottrade positions or convert them into something more stable. Maybe try the DJIA; see if we can see some gains in 19 days. We're past the nasty bank stuff and the rough earnings period, so we might see some bounceback and growth. Berkshire is also trading at a near-6-month low, but I won't be here to lock in the profits on that and Scottrade doesn't have logical/bracketed trades.

We'll see if I keep losing with my position ideas. I need to get the hell out of AAPL as well. I'm going to put a stop on that to make sure it doesn't tank.
Edit: AAPL exit positions:
SELL -20 AAPL STP 156.00
SELL -20 AAPL TRSTP MARK-.26 WHEN AAPL MARK AT OR ABOVE 164

Wednesday, April 23, 2008

Sold 200 TSRA @ 20.00, Profit: $104.30

So after having re-bought into TSRA another 200 shares on thinkorswim for $19.4285, my trailing stop limit triggered at 20.00.

This is because I was fundamentally misunderstanding the utility of the trailing stop limit, which is to say, simpler than I was making it. Instead of a trailing stop that only triggers once it hits a limit, it's instead a trailing stop that triggers instantly, with an upper limit that will force a sale no matter what. A bit less useful, but basically a hybrid way of placing an order with two levels of protection in a single order.

TOS does allow you to create triggers and rules, though, so the way around this and to get the desired behavior I was talking about yesterday would be to create your basic bracketed OCO with a low stop where you want it and then to create a trailing stop with the MARK - whatever value, and a "AT OR ABOVE" trigger on the mark price.

Fortunately, TSRA swung back down just after hitting 20.00, but not before hitting 20.22, which means my TS would've triggered at 20.12, basically killing $20 in profit. Probably the cheapest form of that mistak I could make; if it had triggered on the next 20.00 touch, where the stock broke out all the way up to 20.70, I would've been much more pissed.

AAPL Earnings...

Every once in awhile, I set out to do something that I know is probably dumb, but I'm determined to do anyway. Most the time, this is a losing proposition.

There's all manner of speculation on AAPL's earnings coming out after hours today. Some are saying they'll at least meet, others are saying they'll exceed. Since there are expectations they'll exceed, they have exceed by something of a landslide in order to break past the priced-in pre-expectations game already being waged. An analyst downgrade today helped cool it down a bit by bumping it down about 8 points, settling in at 160. (You'll recall I bought AAPL in my first stock move; an ill-advised single share at 125 last month.)

It's been slowly trending up as we've been approaching earnings; again the market can price things in based on their abstracted layer of expectations. A meet or lightly exceeds is probably pretty tightly priced in right now.

The flip side of this of course, is if that fail to meet. I don't think this is likely, but if they pull a GE, watch out: The Qs will drop and you'll see the NASDAQ as a whole take a slide. It will be a bad thing.

I don't think they'll fail. I think we'll see some sell off heading into it in anticipation of missed expectations. And then hopefully that'll take some of the priced-in effect off and they'll post good numbers in the call. Apple is a strong brand that has become considerably more price-competitive and is outselling, in terms of growth, their competitors by a 10-to-1 ratio. This helps make them recession-resistant, but in any "splurge" item, we could easily see Apple issue crap guidance for Q3. Poor forward-moving guidance can take the wind out of any positive earnings announcement and can even cause a stock to slide heavily in the face of amazing earnings increases, as seen last week in Intuitive Surgical (ISRG).

There, the market had priced in some sky-high expectations and the guidance shifts scared investors who felt it an indication of hospital belt-tightening and further anemic growth to come in the "recessiveish" market.

We'll see if AAPL follows the same trend.

I'm thinking we'll see some impressive numbers. If AAPL sells off pre-earnings and hits $153, I have an order for 20 shares, STOP @ 152.00, TRSTPLMT MARK-.30 @ 167, which means either it'll stop sell $1 down at $152, or it'll initiate a trailing stop of -.30 cents if the market price hits $167.

We shall see. Most I can lose is $20.

Tuesday, April 22, 2008

Getting burned by a slide: stops ahoy

So I placed my dueling strategies into place; one at $20.00 stop at $19.85 (there had been a lot of support just above that, figured it wouldn't trigger; was wrong) and another at $19.55, in case it broke through its support, with another stop at like $19.20 or so.

Sadly, it slid through both my stops, but that's only sad to the degree that those two plays only cost me $150, versus the $230 I lost holding my Scottrade 200 shares through the entire plummet. I know, how stupid to have the stops on one side and not the other; true story.

Moral of the story: you should never have to ride a downtrend. Every second a long position goes down at any speed costs you. If you bail at the start of a slide and pick back up once it starts to level/turn around, you can "gap" the dips and make money on each and every upswing. Of course, predicting accurately the turnaround can be a bit of a bitch; I didn't think it was going to break through its support so harshly but alas, some news moved it and down it went 5%.

Still, my strategies worked in that my losses were minimized; locked in at the level I had already determined. And much more expensive on Scottrade, where they weren't.

Building a better platform: Fun with thinkorswim

I put $5,000 or so into a thinkorswim account, the cheeky, quirky brokerage with amazing software and low fees. TOS does things a bit differently: for one, they offer 1.5 cent/share ($5 min.) trades, making them cheaper than Scottrade up to 466 shares, with a $10 cap. And they send you a stuffed monkey when you fund an account. I'm not even fucking kidding.

As if that weren't enough, they offer you plenty of platform tools and rules-based trading good times which will allow me to sleep instead of trying to wake up to make ill-advised, emotion-linked trading decisions in the 5am pre-market. TOS allows me to schedule pre-market limit orders ahead of time.

But one of my favorite features as I'm just learning to scratch the surface of their desktop surface, is the ability to perform cool trades like a bracketed OCO (one-cancels-others) trade. And the ability to perform trailing stop limits.

So check this out: I have an order to BUY 200 shares of Tessera if it hits $20.25. If and only if that order is performed, two possible trigger orders take effect: If TSRA bounces down to $19.85, I sell all 200 shares. If TSRA hits $20.70, however, a trailing stop is then and only THEN initiated with a 10 cent trail. This is two parts awesome right here: The power of the trailing stop is tempered heavily by the fact that it leaves you vulnerable at all price points along its increase.

Consider: If you buy 100 shares of TSRA at $20.00 a share, and you want to lock in a potential profit with a trailing stop of around 10 cents, it leaves you vulnerable as soon as the order is placed. If you place the TS order right after your purchase order, as Scottrade's regular, non-Elite (their daytrade product) tool forces you to, you're vulnerable if the stock bites it to $19.90. Worse, you're vulnerable if the stock bounces up to $20.20 and then dips back to $20.10. With a trailing stop limit, the TS only activates once the limit is reached: $20.70. Then, if it dips down to $20.60, a sell is triggered and you can be absolutely positive of the minimum potential profit threshold if the TRSTPLMT is triggered.

Further, you can set a regular, non-limit-triggered stop at the same time, a bit further down if you're expecting it to dip lower than 10 cents early on; in this case, 15 cents lower than where I bought it. It seems unlikely for tomorrow, and in fact TSRA may never hit $20.25 to trigger the initial buy, but if it does, I have a stop already in place, detached from "let's hope for a swing back up" emotion and playing by the rules I've set. What's better is that I can lock in my profit without worrying about a premature exit; the exit only plays once I've hit a level I'm satisfied with.

The OCO portion of the deal simply means that if ONE of those exits is fired, the other exit order is cancelled.

I've added a second layer: If TSRA tanks miserably down to $19.25, a BUY order will trigger for another 200, with similar spreads up and down. This allows me to exit on the trip down and pick up once it hits what I perceive to be bottom.

TOS has a ton of other tools, and this is just my impressions after my first hour playing with it. It's definitely daunting software, but they have lots of video tutorials that are straightforward and really helpful. I think I may be moving my Scottrade holdings over to TOS, which is a bit sad because the Scottrade people are very nice, but TOS just beats them in features AND price and I can't play my mini-strategies with Scottrade—that leaves me too vulnerable...

We'll see how things play out tomorrow and if any of these trigger.

Thursday, April 17, 2008

GOOG spikes dramatically...

Damn. 17% in aftermarket from $445 to $525. Should've jumped on board, but it was looking kinda scary with their new quality controls. Be greedy when others are fearful, though...

ABT is just festering for no good reason. I'm going to hold it a few more days and then dump it if we don't get Xience news. Sad that it beats expectations, beats guidance and posts strong numbers and still drops. Worse still that it's doing this in the midst of plenty of other pharmas posting bad numbers and it's not able to pick up slack from them.

Still waiting on Amkor news from TSRA... Still have high hopes.

I think I'm going to buy into AAPL for next week's earnings call and go long, perhaps for the trip. We'll see how risky I'm feeling. For now, I'm still down about $100 total. Kinda sucks. (The Coverstor shows the return on my brother's in-and-out movement, so that's why it's showing a positive return.)

Wednesday, April 16, 2008

Feeling the burn...

Definitely a painful few days, as I'm now at a net loss of about $150. Awesome.

The market has just taken a drubbing the past few days. It doesn't help that this is "banks tell us how hard they've fucked up" week, with WaMu and a bunch of others writing down and taking losses like crazy. Add to that GE's performance on Friday and my tech and pharma stocks are eating it just from the halo effect.

Intel posted good numbers which should help, Abbott SHOULD get approval for their coated stents, perhaps this week and they announce pre-market today, in about 2-3 hours, I'd imagine. Hopefully good news; all signs point to yes. If they're anything below expectations, I'm pretty rightly fucked.

Rumor abounds that Tessera won the arbitration with Amkor; they're just discussing awards now. That will be huge for them, so I'm holding both these long for now, basically tapping my cash reserves entirely. Need a bounceback here; it's getting brutal and I'm not even in financials, aerospace/airlines or retail. Ugh.

Friday, April 11, 2008

This is why you need stop losses...

Today was a bloody day all around and not something I needed to be around for. Let's examine what I did wrong:

I hesitated in setting a stop loss for Tessera at, say, $21. In my mind, if it bounced to $21 again, it was just going to bounce back up and I didn't want to miss the swing up and lose some money. Instead, it tanked right through its support to $20.29. Jesus. Each of those cents it dropped cost me $2. I'm down $206 on $4,058 worth of Tessera, because I didn't set a stop loss.

Tessera isn't dropping on any news. It's not dropping because of a loss of value or patent issues. No, it dropped, like just about everything else today, on news that GE fucked up and didn't hit their estimates. Because GE is such a far-reaching conglomerate and because they have some exposure to subprime with GE Capital/Finance, they double-whammied and took everyone down with them.

Since I want to be in Tessera *anyway*, this was a particularly painful lesson: I should have had a stop loss at $20.90. It would've tunneled right through that before landing where it did and I would've saved $122 of pain. I could've bought my 200 shares back at $20.90 and dodged that pain. But instead, I kept myself from establishing a decent stop loss. It's part art, part science to establish a proper stop loss that will keep me from exiting just as it's about to upswing again. But I needed one today.

Abbott started to dive and kept on going. I should've held off on purchasing ANY stock at the beginning of the day with something as significant as GE's news, especially considering how sterile ABT has been the past few weeks. I'm really hoping things bounce back Monday. I also need to examine stop losses to set now.

I also have a great deal more exposure with 200 shares. A relatively meager bounceback will bring this all back and a spike will boost me quite happily. I'm guessing and hoping TSRA makes it back into the high $21-$22 range next week, on no news.

Meanwhile, I'm still looking for a 19-day strategy. Ideas are welcome.

Buying Abbott Laboratories (ABT)...

Lackluster day today. Tessera bounced around and ended low, no big deal, it'll bounce back up tomorrow. Will try to sell in the $22 range.

American Airlines completely surprised me with a BUNCH of short covers and support actually bringing it *up* 7%. Who knew.

Buying Abbott Laboratories in advance of their earnings announcement on the 16th. Could get bitten bad on this: 65 @ 53.91. Hoping to see maybe 3-7% gains, though. Could easily swing down up to 10% on missed expectations, etc. I'll bail if it looks choppy before the call. Shouldn't be an issue though, I think. Pharma is stable if there aren't any massive, unforeseen patent/lawsuit issues and Abbott has had some good news coming their way and little movement elsewhere so let's see if this pans out. Getting on board a good few days before the announcement to allow myself to profit from any gaps. Again, though, it could swing either way.

I'm beginning to look for a short-medium-term strategy for the trip. I'll be gone for a full 19 days and completely out of touch with regards to stock and such. I'm thinking I'll buy into either GOOG or back into BRK, since they're relatively low impact—but GOOG's earnings announcement could affect that a lot. Same with AAPL, but they have both traded really strongly this past month. Not sure if they'll correct back down or not.

Thursday, April 10, 2008

Averaging in TSRA...

Bad day on the market, but I bought another 100 shares of TSRA, this set at $21.31. As it closed at $21.66, not a bad scene. Should've sold off the first 100 at open, but no big deal. Since I bought the first 100 @ $21.55, still doing alright. I'll sell at least 100 if it hits $22.40-ish again. $22.60 or whatnot would be ideal.

Why not sell the whole load? Because I'm still expecting news on the Amkor settlement and don't really want to miss the bump I'm expecting we'll get on that. Though the settlement talks were to end on the 8th, so perhaps nothing going til next week, once a decision is made...

Want a near sure thing? Short AMR (American Airlines' parent company). They've had to nix another 1,000 flights for MD-80 checks and that's going to hurt them something awful. Note to American Airlines: Get this shit fixed before I fly you on the 25th. Seriously. They already tanked 10% Wednesday, so they might his some support (because stuff like this can only "damage" you temporarily so much) but I think we could see another 5-10% today. It'll probably gap before pre-market and not be worth waking up for, though. Let's take a look at what happens when the market opens.

Fun fact: If I had bought 10 shares of GOOG at the beginning of this and held them until Monday, without any other activity, I would've made $536, instead of the $374 I'm sitting on now. Not sure what'll happen with their earnings though, but might be a good buy if it gets beaten up again, which some are expecting.

Even sadder? If I had bought 34 shares of AAPL (about the same price as 10 of GOOG at the time) and sold now, I'd be up $998. Medium-term may really be the way to go, at least with some of my liquidity. Berkshire's only up $30 from when I first bought it though.

Tuesday, April 8, 2008

AMD in and out, back in to TSRA...

SymbolActionQtyAcct TypePriceTotal
AMDBOUGHT TO COVER500SHORT$6.06$3,037.00
TSRABOUGHT100MARGIN$21.55$2,162.00
AMDSOLD SHORT500SHORT$6.10$3,042.98
Can't short in pre-market. Fun. Wouldn't have mattered since it gapped pretty hard. Entered at market at open 500 @ $6.10, watched it climb to the $6.18 range, but held tight, covered at $6.06 for a net profit of all of $5. Woo.

Tessera bounced around a bit more today before triggering my limit order 100 @ $21.55 before closing at $21.87 / $22.10 (A.E.) netting roughly $55. I'm going to set another trailing stop and let this one play on its own again. If it keeps wanting to trade in this range, I might as well ride it each way. I just hope I'm on board when the Amkor news comes through, assuming it's good news.

Also, a veritable bounty of earnings calls coming up over the next week. Time to pick some tasty picks... Bed Bath Beyond, Circuit City, Progressive... and a bunch bunch more the week after.

Looking to short AMD for a day...

AMD just announced a nasty 10% reduction of their workforce due to "deteriorating business conditions." Bad scene. Good time to try my hand at shorting for the first time ever.

Shorting, for those who didn't catch my lesson earlier, is pretty simple: I sell you stock I don't own. Don't worry, I'll make sure I come up with it. I'm just looking to buy it to cover my sale to you, at a lower price than I sold you it for. I sell you a share of Wal-Mart for $50. If I can buy it after a drop to $40, sweet, I just made $10.

Problem? If Wal-Mart doubles to $100, I still owe you the stock. So now I have to buy to cover the stock at $100, and I'm out $50.

I'm going to try to short at the open of pre-market. Which means I need to pass out soon in order to get any sleep. I'll see how this goes. I could easily lose some serious cash on it. But I want to try my hand at shorting and I think AMD could move.

Worst-case scenario: people see the move as prudent, AMD goes up.

Monday, April 7, 2008

TSRA & PLXS Sold, $74.01 profit...

Both TSRA and PLXS triggered their stops today:
SymbolActionQtyAcct TypePriceTotal
TSRASOLD100MARGIN$22.405$2,233.48
PLXSSOLD100MARGIN$26.0901$2,601.99
Seeing as I originally bought PLXS for $2,601.99 total, and TSRA for $2,159.47, that leaves me with a net profit of $74.01 on both.

I am now completely exited from all positions, the first time that's been the case since I've started.

TSRA has been all over the place. Early on, it was trading in a range from $22.42 to $22.60 or so. My trailing stop was set for $22.41 and I watched it come very, very close several times before finally triggering. A bit later, the stock shot up to $22.95, but it's come back down to $22.37-ish. I have a standing limit order to buy back 100 @ $21.55, but it's doubtful it'll drop far enough to hit that today, since it's up on the day and opened at $22.

PLXS ended up costing me all of $5, but it's hovering right around the same point so I'm not too upset.

I'm beginning to formulate strategies for my upcoming trip. I'll be gone for over two weeks and won't have much access to internet. I'm definitely considering just buying two solid shares of BRK/B, especially if it keeps tanking like it has. It's down to $4,360 after having hit $4,466 when I sold it.

Google also looks poised for a breakout. It's hitting $480 right now, but it's been swinging back down as well. We'll see what happens when earnings come up soon.

Safety Stops for TSRA & PLXS...

I've placed two sell orders for TSRA and PLXS.

I bought into TSRA 100 @ 21.455 and it's trading at 21.99 / 22.05 (A.E.). I think it has a lot of potential upward momentum, but if it dips back down, I can use that to my advantage. I've set a trailing stop of 0.26 pts so its floor is 21.73. If it dips below that, I'll reevaluate, but probably buy back in a little lower, instead of taking the hit for the dip. I think we'll hold steady in the upper 21s, but any significant dip will trigger the stop.

Again, this is a stock I'm holding for news on the Amkor arbitration. I think the other pending lawsuits are too far off to make this a short term play, so we'll see what happens, though I'm debating switching it from a trailing stop to a regular stop...

PLXS didn't bounce like I had hoped; the downgrade to "neutral" really hurt it. They finished some proper financing as expected late Friday, but I'm not sure it'll have much of an impact. Either way, it closed at 26.01 / 25.91 (A.E.) after I bought 100 @ 26.00, so I've set a T/S of 0.31 points, but I'm not sure I'll want to see that trigger without a nice spike. I'm looking to exit this position pretty quickly one way or another and I'll probably take a slight loss on it.

Friday, April 4, 2008

Portfolio Recap

I started this blog and my "trading career" three weeks ago today.

Let's look at how I've fared:

As of right now, I'm up almost exactly $300. On exactly $7,500 invested. (Bear Stearns required an additional $1,000 that was put into play for liquidity purposes; that original $1,000 was withdrawn the next day.) So we're looking at a 4% return in under a month.

Not bad, but it can definitely be better. My PLXS play didn't bounce upward enough; buying in at $26 was a bad call; not enough volatility/upward motion to cause it to gap at open and it hovered in the $25.50s through most of the day before closing at $26.01. Gain before commissions: $1. We'll see what happens to it on Monday, but I'll close my position on that sooner or later; was just making an anticipated correction play.

Tessera is getting more and more interesting. The Ankor hearing should be wrapping up with results coming this week. It's performed shockingly well all week, though it slipped some 41 cents today. (And at 100 shares, I do feel it.) I'm not holding it for those tiny gains and losses. I'm hoping some big news pushes it up to the $30-$40 range. Positive Ankor news would be best, but MOTO settlement would be the holy grail. Unfortunately, Ankor is short-term. MOTO definitely isn't, it seems.

We'll see what happens next week. My holdings are worth exactly $4,800.00 right now, which leaves me with $2,700 in liquid assets.

Plexus takes a hit, looking for a bounce back....

Plexus Corp (PLXS) took a nasty hit yesterday on a single analyst's downgrade comments that don't reflect the company's broader holdings and capabilities. They ended up down $3.74 / 12.73% to $25.64. I've bought 100 @ $26 (which may be a bit too much, but we'll see if I should've just let market take over for regular session—this is how I learn lessons.)

I'll put a regular market session market bid for 100 shares and see where it closes. This one could easily bounce down a bit, but I'm guessing it oversold yesterday.

New strategy, but of course we'll see where we end up.

Thursday, April 3, 2008

RIMM Sold, small profit...

Today's Completed Orders
SymbolActionQtyAcct TypePriceTotal
RIMMSOLD30MARGIN$121.25$3,630.47
Sold RIMM today with a trailing stop set at .75 that followed it along. Should've held on a little tighter, since it's trading in the $123.25 range now.

Realistically, I should've sold it yesterday in after hours when it spiked to $125. Definitely should've recognized that it wasn't going much higher than that and made off with it then. But alas.

Net profit after commission: $57.97 or roughly 1.6%. Not great, but better than taking a loss. Could've realized up to $220. This entire game is about timing and learning to read the market a little better. I definitely didn't anticipate a drop off to the $115 range right before market close last night, especially considering that the earnings announcement was scheduled for after the bell. I could've bought in then and sold a few hours later at the $124-$125 mark for a much healthier profit.

Had a margin call issued because of the free-ride this constituted. (Since I bought RIMM with unsettled funds and then sold it before said funds settle, it's considered sold on the margin. Since the previously sold securities I bought this with will settle up before my purchase or sale of RIMM, I'll pay no margin fees or anything though.)

Also, still holding Tessera which is up $0.38, for a net gain of $38. This is its third day of gains thus far, if it holds. I'm guessing it'll start to bounce down soon. Again, this is a medium-term holding until at LEAST the Ankor hearing results or some other info on their MOTO case come out. I'm sitting on a bit of a powder keg, but if the patents are truly valid, this could explode to the $40s. Or plummet to the $10 or lower if they're not.

Wednesday, April 2, 2008

Avoided VRTX, in for RIMM's earnings...

I decided to avoid VRTX; there was very little movement on it for the first hour.

RIMM has their earnings announcement at 5pm today but it was hovering in the $119 area. For some reason, I put a limit at 30 @ $118.85, which is unfortunate because it's closer to $118.00 now, but I thought I could capitalize if it dipped and took off again.

I'm expecting it to do well from an earnings perspective and bounce an extra 4-5 points, past $120. If it doesn't, I'll probably exit pretty quickly. Gotta watch out for free-riding, though I did establish the margin account so that wouldn't bother me so much.

We'll see what happens with their earnings and in after hours.

Earnings announcements: BBY, MON, RIMM

Pre-Market: BBY & MON
Post: RIMM

Guessing: Best Buy (BBY) beats earnings estimates, posts a decent FY 09 outlook, gains 5% on the day after some rocky profit-taking, etc.

Monsanto (MON): Slight gain, hits expectations; it's been doing pretty well the past few days. No huge bump?

The Blackberry people (RIMM): On/slightly better than target, 3-5% bump during hours, 4-6% after hours?

Getting into VRTX too late?

I'm wanting about 100 shares of VRTX @ market ($25.41 for now), but it's had a meteoric gain over the past two days and I wonder to myself if it's still going to gain just a bit more over the next two days on cheery news about it's Hep-C drug trials. Fool had a powerful article on it and there's lots of other chatter, but it may very well be at the very peak of its gain for now.

The real question: is it overbought and will it correct abruptly tomorrow? Or will it continue its breakout and settle down a bit later?

I'm hoping for the latter and I think it'll level or dip just a little if nothing else; I don't see it collapsing all at once or anything, so if it's another low-loss RedHat to hedge what I think is a decent shot, then I'm willing to take that. I can add a stop @ 22 or something, but we'll see if that's necessary.

Preemptive lesson: stop buying at the peak of a breakout momentum play on old news.

Also, RedHat jumped 8% today. Shucks. The other question: market or pre-market? Probably sleeping in and letting it ride. Let's see what happens.

Tuesday, April 1, 2008

Trailing Stop Triggered: So long, Visa

SymbolActionQtyAcct TypePriceTotal
VSOLD35CASH$61.75$2,154.23
Visa, I hardly knew ye.

After having bought Visa at its post-IPO glowing peak for 35 @ $64.95 / $2,280.95, it sold today after triggering a 3% trailing stop at $2,154.23, net loss of $126.72. It never pushed past the resistance I regrettably bought at, and while I still expect it to surge into the $100s in the coming months, perhaps after an earnings statement and on strong transactional growth, it wasn't doing it anytime soon.

This was an issue of liquidity—I had wanted in at $55 and got in at $64.95 instead.

This actually represents the first position I've exited at a loss and it's very clearly not going to be the last. It's also a good lesson in momentum and resistance. I had figured it would want to push clear the level I bought it at, but it only spiked an extra few cents and never hit that level again.

Alas. Let's see what happens with TSRA and what I can buy with the liquidity I have from the V and BRK sales. I've got $5,550 available for trading. Time to make some use of it.

Sold BRK, Bought TSRA

SymbolActionQtyAcct TypePriceTotal
TSRABOUGHT53CASH$21.45$1,143.85
BRK/BSOLD1CASH$4,466.00$4,458.97
TSRABOUGHT47CASH$21.46$1,015.62

I originally bought BRK/B 1 @ $4,374.50 (incl. comm.), so selling at $4,458.97 yielded me $84.47. Which is nice, considering the "fun" I'm experiencing with TSRA. I'm in for a penny and a pound at $2,159.57. Hopefully, the patents don't destroy me. But I'm still wanting to stick around and hoping for a good outcome there. I won't buy in any more than that.

TSRA dipped on news of the patent stuff which stung my position, but that's what happens.

Overall? For now? Up $158.87. Visa needs to bounce one way or another and hopefully not erase my BSC gains.

Monday, March 31, 2008

Tessera Patent Panic: What happens when people don't read *all* the words...

EDIT: I'm now pretty damn confused because only a few were even examined originally; so it may in fact be that all that were re-exed were rejected. We'll see what that means soon enough. Or I'll lose $2k.

Tessera received an initial action today from the Patent Office that some people interpreted, once again incorrectly, to mean that their patent had been invalidated. This was exacerbated by idiots posting "ALL CLAIMS REJECTED" onto Yahoo and Google's Finance boards. Awesome.

In reality, only 7 of the 27 claims of the patent in question were dumped. And the remaining 20 were essentially re-affirmed.

Here's my full rant on the boards:

Alright, a lot of people have been fear-mongering OR unintentionally
misreading the USPTO's office action which became available on PAIR
today. (Available here: http://portal.uspto.gov/external/portal/pair
Control number:90/008,484)

Let's be clear that the SUMMARY OF ACTION clearly states that SEVEN of
the 27 claims were SUBJECT TO REEXAMINATION and subsequently REJECTED
outright.

The remaining 20 claims were "not subject to reexamination," which
actually in force makes them stronger.

Summary of action:
1a. Claims 1,5,6,17,18,21 and 22 are subject to reexamination
1b. Claims 2-4,7-16,19,20 and 23-27 are not subject to reexamination
4. Claims 1,5,6,17,18,21 and 22 are rejected.

Now before we take a look at the claim language from the actual
patent, US Patent Number 5,679,977 (Available here:
http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=P...),

let's consider:
A) The patent is in full-force and effect while the case is being
examined
B) The claim is non-final office action, and Tessera will appear it
anyway

And now let's look at the claims and examine which have been rejected--
mostly the non-specific elements. Now, that's not to say that those
elements don't narrow it down to the scope of exactly what's at issue
here. It's not to say that I even know anything about the specificity
with which the patent examiner has knocked down certain claims over
others. It *is* to say that the specifics have been mostly upheld and
that MOST of the patent is intact and survivable in that form. Not
only that, but before an appeal even, those elements are "not subject
to reexamination" and thus COMPLETELY LOCKED as valid.

Please feel free to correct me if I'm wrong about any of this. I am
not a patent officer, attorney, lawyer or anyone even remotely
intelligent in any of these fields, or in trading in general. I am
just offering the facts as *I* see them, since I'm sick of reading
"ZOMG THE PATENT IS GONE" based on a 10 word wire piece. Seriously,
people.

Pre-Market TSRAing...

ActionQtySymbolPriceTotal
Acct TypeTrade DateTime CompletedSettlement Date
BUY47TSRA$21.46$1,015.62
CASH3/31/20088:01:30 AM4/3/2008
Done and done. Back to bed. Happy to have bought below Friday's close, even if just barely. ($21.93)

Sunday, March 30, 2008

Dropping Berk for now, but to trail or to stop...

I'm having a bit of an internal struggle with my few dollars here. I can sell Berkshire at market on Monday, and it'll likely open at $4,452 where it closed Friday. Or I can leave my trailing stop in place at 1% and have it fire at $4,407. Basically, it could cost me $45 to stay in, on the hope that it bumps up even further—not terribly likely. I'm expecting it to bounce a little bit lower, or a lot lower. It took on a nice boost on Friday. It'll level out.

So should I just exit now? Or let the TS stand?

Well, I've converted the TS from a 1% to a 31 point stop. This'll let me have a bit more granularity over the TS (on a stock as large as BRK, not being able to subdivide percentage points is a bitch) and let me realize any additional gains that may hit Monday morning.

I'm starting really wish I lived on the east coast. Waking up at 6:20am to catch market open is killing me. If you know me personally, you know that I'm rarely up before 10am, and rarely in bed before 3am, so it's rough.

Once again, just to reiterate: If I were in the market for a long-term investment strategy, I would seriously dump whatever excess cash I have into Berkshire. I just would rather keep liquid on the many other opportunities (and risk) I can play into elsewhere. And being a more active trader definitely makes this blog more interesting.

I still see BRK hitting $5,000+ in the next 6 months and $5,500 in the next year. There's no reason it needs to stop—Warren keeps building its value with solid, well-underpinned, stable growth not attached to anything as volatile as fuel and housing costs. And he always buys on the dip.

Friday, March 28, 2008

A pregnant pause... entering Tessera with no available out for 3 days... (TSRA)

Tessera is a microelectronics company that holds a bunch of patents directly correlated to miniaturization technologies used in the semiconductor industry. They receive lots of royalties and licensing fees from Intel and other major semiconductor manufacturers.

Motorola has been trying to bitch slap the patent infringement suit Tessera has brought against them, which is kinda a big deal: If the patents are indeed not infringing, there's something to be said in a worst-case-scenario kinda way that they could be overthrown entirely and Tessera could lose their current clients. Bad news.

As a result of this fear, and several USPTO re-exams tossing claims, Tessera's share price completely tanked in February, from $40 to a low of $13 in seriously about a week. Ouch.

An ITC judge issues a stay against them, which killed them further. Tessera clarified that USPTO's claim-tossing was NOT the same as overturning their patents; quite different. This helped them out a bit. But yesterday, the ITC appeals panel unanimously overturned the stay and is allowing them to go forth with their claims. That caused a MASSIVE spike of 33% (+5.44 to $21.93) Friday alone.

Here's the thing: Tessera is a pretty stable company in terms of operation and IP. They have a bunch of major players paying major licensing fees to them for their technology. An analyst at Lehman Brothers is putting a price target of $46. From an intrinsic value standpoint, you're looking around the $40s at least, where it was trading for most of last year.

What's that mean? It's a steal at twice the price, even at $22. I'm going to put my liquid $1,000 into it @ market on Monday.

The only problem is that I free-rode Friday with Red Hat. (Bought in and then sold with unsettled funds.) If I do that twice, I have my account frozen for 90 days. This is why I need to sign my margin authorization. (Margin accounts aren't held to the free-ride stipulations. Even when you're trading in cash.)

So I'm effectively locked into this one for 3 days. But I think it'll be well worth it. I'm not sure how long I'll hold onto it. Any settlement or further upward movement in this court case could cause this stock to absolutely skyrocket. If they "win" in any form, we're talking a HUGE boost. It'll reaffirm their position beyond all doubt (as opposed to the unanimous overturn which simply helped them quite a bit) AND lock in a major cash influx. Huge potential here.

And if the ITC was overturning the stay unanimously, they clearly think there's some merit there. Not to mention the fact that Intel and a bunch of others are already paying the licensing fees without a peep. Some real potential here. Not sure what I want to establish as an exit strategy; if I want to hold medium or wait for a ruling on the case... if they failed to secure a victory on the case, all hell could break loose.

Either way, I'm seeing some decent short-ish term growth on the horizon. Maybe a jump on Monday, but having the free-ride limitation might actually help me out and not panic if it slips a little on Monday. (I fully expect it to go up though; there's going to be major support @ 22 and gnashing of short-covers.)

Open Orders


StatusSymbolActionQty
Order Type
Duration

Order TimeSession


QUEUEDTSRABUY47
MARKET
DAY

3/29/2008 1:45 AMRegular

Exits Completed: Red Hat

Sold Red Hat, completing my roundtrip with about my commission lost. Stupidly, I had made two initial purchase orders, tacking on another $7 unnecessarily.

It didn't move much more than its initial spike so I think I sold at a loss of $19 or some such.

Berkshire made a big move, my trailing stop is still in effect and that should lock in a tiny profit.

Looking for some new things to play with. We'll see what happens with Berkshire on Monday.

Exits all around... (RHT, BRK/B, V)

Red Hat, Inc. (RHT)
As I feared, Red Hat is a bit too low in volume to really push past a 5% gain. I bought pretty much at market open, and pretty much at its peak thus far of $18.58 and worse still, after it had made its biggest move in after hours yesterday. It's showing strong resistance at $18.80-ish, and I don't think we'll see it move past that. Trailing stop set: 57 @ 1% / $18.4734.

Berkshire Hathaway (BRK/B)
Berkshire is having it's daily spike up, as high as $4,450 when I started writing this. It's at $4,432, with me having bought in at $4,374.50. Trailing stop set: 1 @ 1% / $4,393.55, guaranteed profit of all of $20. (After commission.) Hopefully we can squeeze out just a little more, but I want some big liquidity back. I'll probably keep my eye on it and watch for it to fall to $4,200 to buy in again. It's moving up almost no matter what; buying on the dip of the range is a good call.

Visa (V)
This stock just won't settle down. Everyone expects it to perform exactly like Mastercard—to take off and break out in the next couple of months and skyrocket into the $200s. It took MA four months to move and MA had a lackluster first few months at best, opening at $44 like V, and only hitting the $50s until month 4, when it broke out in a big way:


In the meantime, nothing's moving on it and today, it's taking a bit of a hit, trending downwards and unable to gain any ground on its rallies. We'll see where it lands. Trailing stop set: 35 @ 5% / $60.268

Thursday, March 27, 2008

Let's play the earnings call game... Buying Redhat (RHT)

Redhat announced that they bested earnings expectations by 7%. Quarterly earnings calls almost always come with a fun shift in the stock price: up for beat expectations, down for missed expectations. Naturally, this is an oversimplification. A stock's last few quarter's performance, it's market capitalization, the amount by which it missed or exceeded and of course, random market entropy all come into play.

But it's typically one of the safer bets you can make.

I'm hoping for a 5-10% bump and I'll roundtrip it if it gets anywhere near to that. After hours pushed +1.27 / 7.24% already, so the most of what we'll see may have already come and I could be buying into a sell off. Or we could see some shorts covered and a nice spike that nets me a small profit.

I'm only buying $1,000 worth, since that's all I have in "liquidity". In fact, I don't even have that; I have $500 in settled funds and another $500 in unsettled, pending funds. (From today's GOOG & AAPL sales.) The Federal Reserve's Regulation T requires me to have the funds settled before I can buy and then sell a new set of securities with the proceeds of an earlier sale.

Example: While I can buy 29 shares of RHT with the proceeds from my GOOG/AAPL sales, I cannot sell the position until the sales have settled, in three days. If I do, it's considered "free-riding" and it's a no-no; two instances locks an account for 90 days. I'm willing to take one instance to get a nice profit in.

I'm also completing a margin application, since you can get around this provision with a margin account.

The other thing I need to watch out for is the pattern day trading rules. If I perform 4 roundtrips (in and out of a position in the same day) within any 5 day period, my account converts to a "pattern day trader" account, which requires a minimum equity amount of $25,000. The punchline? They issue a fucking trading equity call for the difference if you don't have the $25,000. Or they close your account. Woo regulations.

Trailing stops triggered: GOOG & AAPL sold

SELL1AAPL$141.47$134.46

3/27/20081:38:28 PM4/1/2008
SELL1GOOG$446.00$438.99

3/27/20089:30:01 AM4/1/2008
The trailing stops I had established for both Google and Apple triggered today, at $446.00 and $141.47 (or $438.99 / $134.45 after commission.) I had purchased GOOG at $435.94, leaving a whopping profit of $3.05, and AAPL at $130.35 leaving a profit of $134.46. I specifically set the trailing stops to trigger once I had hit my near-breakeven point, after commissions.

In the end, Scottrade made more on these than I, with $28 in total profit. This is why I need to be entering in at more than one share a trade volume.

Visa's next on its way out and then we'll see what happens with Berkshire. My extra, boosted deposit cleared its withdrawal after settlement, putting me firmly at $7,687.24 / $7,500.00 or up about $187.24 or nearly 2.5% in about two weeks. Not bad. Need more plays like Bear Stearns. In. Out. Quick turnaround. Closer to day trading. But that also brings a lot more risk with it. We'll see what happens.

And I'll make an AAPL/GOOG play before their earnings calls later next month. Which way I'll bet is anyone's guess. Hearing some scary things about Google's Q1 results, but AAPL might be hot. On a day with exceeded expectations, you can always expect a 5%+ gain. Likewise a loss on failed expectations, for certain.

Nothing much.

Some nice gains today. No trailing stops triggered. I'm bumping up my V trailing stop I think. (I actually converted it to a straight stop.)

It's still finding its place in the world, so to speak, and that place is probably under $70. Needed more liquidity to play that right but alas.

I'm keeping this one short—huge presentation in just a few hours. Wishing Berkshire would bounce back and still considering canning it for now and playing around with a bit more liquidity in the short term.

Thoughts? Worth the maybe-it'll-hit-$5,500 (gain of about $1700) within a year to hold onto it? Or can I make more with a bunch of smaller, high-octane, higher risk plays?

Am I too young, so to speak, for Berkshire?

Tuesday, March 25, 2008

Preparing my exits...

Symbol Last price Change Shares Cost basis Mkt value Gain Gain % Day's gain
AAPL 140.98 1.45 1 123.35 140.98 17.63 14.29 1.45
GOOG 450.78 -9.78 1 428.94 450.78 21.84 5.09 -9.78
BRK.B 4300 -41 1 4367.5 4300 -67.5 -1.55 -41
V 63.1 3.37 35 2273.95 2208.5 -65.45 -2.88 117.95













$7,193.74 $7,100.26 ($93.48) -1.30% $68.62

Someday, I'll figure out how to accurately represent my performance in the market. The above Google Finance output, for instance, doesn't much care about my BSC deal which netted me $280, instead highlighting that I've lost on V and BRK.B.

Visa had a decent day today and didn't hit my STOP for it. I've established 3% trailing stops for both GOOG and AAPL, which will put me at an extremely meager profit for each of them; it's stupid to be playing with that cost with such low volume. The commissions make it completely inefficient. Lesson learned.

I'm also considering pulling out of BRK.B. It's not underperforming or anything; I expect in a year or less it'll be breaking $5,000 or more. It's just boring and I think tying up that much capital is a bit of a pain when I have such little to work with. It's a decent hedge though, and keeps me from blowing everything at once. But if I play smart and keep my eggs in separate enough baskets at all times, I'll be fine. I may exit once it pushes past my commission-break even. Meh.

Monday, March 24, 2008

Visa stings, BSC turns out to be a good call...

AAPL139.53+6.26(4.70%)
GOOG460.56+27.01(6.23%)
BRK.B4,341.00-6.88(-0.16%)
V59.73-4.62(-7.18%)
BSC11.28+5.32(89.24%)
Value:7,031.64-135.31(-1.92%)

Some confusing numbers up above, due to Google knowing I was only holding BSC for the day and neglecting to report any of my profits on it because it's technically no longer in my portfolio. At the very least, you can see that the market had a strong day in general with Google leading the charge up $27.01. Apple was healthy as well at $6.26/4.70%. But Visa met with some nasty downtrending with someone apparently selling heavy into the rallies that would've otherwise drove it up.

As a result, I've gotten dangerous close to my 15% trailing stop. And as a result of that, I think I'm going to switch it to just a flat stop at $57 to buy myself some cushion (about 50 cents worth) tomorrow. I'm predicting it bounces heavy tomorrow—a lot of people want this for a long term buy and were waiting for it to drop below $60 before buying in. Now will be their time and hopefully I can exit the position around $70 or $75, or at least establish a nice and healthy trailing stop there.

I won't let it drop below $55 at the VERY least though, and I'm going to set the stop loss at $57 right now. It'll suck to lose just about as much as I made today on BSC, but that's how things work. (It's more or less just frustrating because I think a bounceback is imminent, but waiting and wishing doesn't make it so.) (Okay, I lied. $56.75.)

SymbolActionQty
Order TypeOrder PriceDuration



VSELL35
STOP$56.75GTC



Bear Stearns bump & the exhiliration of day trading: Buy at open, sell at resistance, make 27.7% profit!

ActionQtySymbolPriceTotal

Trade DateTime Completed
SELL74BSC$12.64$935.34

3/24/200810:24:52 AM
SELL130BSC$12.6674$1,639.74

3/24/200810:24:52 AM
BUY204BSC$9.85$2,016.40

3/24/20089:57:54 AM

To summarize, in for $2,016.40, out at $2,575.38 for a shared profit of $558.98 or $279.49 (27.7%) for my brother and I, each. Woot.

I couldn't get in to pre-market trading levels; by the time I woke up at 6:20a (9:20 EST), it was trading at ~$9.91. (And my money transfer hadn't completed yet.) Was forced to enter in at $10.70 because that's where the ask was, so I placed my order for 204 shares at market. Trading was halted on BSC for the first 27 minutes, which completely freaked me out, since I placed my market order at exactly 9:30:00 and just saw it hang.

I know I said I wouldn't buy above $8.50, but I knew there would be covering shorts and other excitement. I didn't expect the halt and that scared me a bit, but then they lifted it and my trade went through at $9.85. I watched it start to bounce and news came through that the deal with JPM seemed solid at $10/share. Good, I made at least 15 cents a share in almost any event. At the very least, we weren't going to see another offer come through at less than that value, or at less than my $9.85.

Then something interesting started happening: the stock upticked like crazy. I'm guessing a combination of covering shorts, an even slightly (or immensely) bigger deal coming or some insanity pushed the stock all the way up to the $13 range. I saw it start to dip and bounce off of a resistance point of about $13, so I exited the position at market, which was fulfilled in two blocks: 74 @ 12.64 and 130 @ 12.667. (It *briefly* spiked to $13.85, which means that if you had gotten in at pre-market around $6.40... well, damn.)

All in all a good showing of $279.49 on $1,008.20 invested, *after* commissions.

I'm going to pull my $1,000 back out since it was from my savings and not part of my active trading cash. I'll ask my brother what he wants to do with his. Good times. I can see how this is addictive. Now, if an offer comes through for $25/share or some such, it'd have been crazy to still be in so I won't feel bad. There are far too many "what ifs" in this game to beat yourself up over it for more than just a few minutes. It's trading around $12.05 now (8:14/11:14a) but I'm happy where I exited.

Jumping on the Bear Stearns (BSC) bandwagon: Market volatility ahoy!

It's being reported that JP Morgan (JPM) is beefing up their offer for Bear Stearns to closer to $10/share—not a huge surprise considering the massive backlash from BSC shareholders at the thought of a $2/share offer. (The wisdom at the time being, I suppose, any offer is a decent offer. Indeed, an offer worth less than the very building you're occupying is not a decent offer under any circumstances. The shareholders realized this and weren't about to let JPM pillage in such a greedy, "let us rescue/rape you" manner.)

With that, I'm expecting a huge bump in BSC tomorrow. As such, I'm throwing $1,250 of my money and $1,000 of my brother's money into the pot at open, provided it doesn't gap up and over $10. In fact, I don't think I'll enter the position if it opens at anything greater than $8.50/share. (Note: my brother is in stock market class and has been following the BSC situation closely. I have also let him know that there is a VERY real risk he loses all of his investment, completely. He understands that and is willing to take the risk. The parents have given their blessing to him as well.)

Entering the position at more than $10/share would be a big error in my particular circumstance. While many are speculating that another offer may come through, or that JPM may strike closer to the $12-$25 range, I'm not looking to play that game. A lot of people who bought in at $4 are going to be happy that they've held on; their bets have paid off that a $2 offer wouldn't stand. Now we'll see another round of people looking for the same stroke of luck.

As the situation surrounding Bear becomes more clear and their liabilities and liquidity come to light, a more accurate value will emerge. Again, $12-$25 has been rumored by Barrons and CNBC. If that's the case, the stock could easily leap right over $10/share. Or it could spike to $9 and hover there while everyone figures out what's going on with this revised "deal."

This is all an elaborate guessing game. Clearly, the company is worth more than $2/share if their building alone is worth more than that. What everyone's gambling on is what is it *really* worth, to JPM or another suitor?

Game plan, if at all possible: Buy at open at market (assuming that's under $8.50), sell if it breaks $10 at all or crashes beneath what I entered at. (A 20% gain would of course be fantastic; buying at $8.50 means $10.20 hits the 20% threshold.)

Very real possibility: Pre-market trading and gapped demand will drive the open price up right around to $10. It will jump up a very small amount, but could also settle back in the $9 range. If that happens, we'll stay out of it altogether I think.

Friday, March 21, 2008

Fun with trailing stops...

Open Orders


StatusSymbolActionQty
Order TypeOrder PriceDuration


Order TimeSession


OPENVSELL35
TRAILING STOP15%
$54.6975
GTC


3/21/2008 4:25 PMRegular
Today's a holiday so nothing going. I've placed a trailing stop (more on them here) order for 15% on my Visa holding, since I want it to be a medium-term play and while the market settles, it could have some volatility yet. If it drops 15% or more at any point, a stop will trigger a market order to sell all 35 shares I own.

What makes it a trailing stop is that the "15%" mark is relative to the high point for the stock. As the stock's price increases, the stop "trails" or moves with it, providing a moving safety net that allows you to lock in profits. The order price is listed at $54.6975 because that represents the current 15% stop loss level. And if it triggers that, it'll suck and I'll lose some money, but if it collapses back to $50 or some such, I'd lose quite a bit more. I can always rebuy on the dip. Or, perhaps not buy on the peak in the first place. :-)

The GTC indicates that it's "Good Til Canceled" which is pretty self-explanatory. We'll revisit this order next week and see what happens with good ol' V.

Thursday, March 20, 2008

BRK Bounceback...

AAPL133.27+3.60(2.78%)
GOOG433.55+1.55(0.36%)
BRK.B4,347.88+82.63(1.94%)
Value:4,914.7087.78(1.79%)
Berkshire was bouncing around a bunch today. Of course, looking at it every day is purely an academic exercise since I'm not touching it. Could've averaged in over the past two days when it was in the $4,200 range, but that only works for long-term positions and I'm not looking to tie up another $4k.

*Someone* thought well to buy in on a bit of a low point for [BRK], pushing it up $82 in a series of big buys towards the end of the day in rapid fire.

My buy of [V] (which isn't showing up above because I paste that from Google Finance who isn't yet allowing you to add [V] as a portfolio symbol yet) of 35 @ 64.97 smarted just a touch by close @ 64.24; it hit its resistance right about there but damn if I didn't think it'd push past the 15% gains mark.

Holding Visa short-term...

Well, I went ahead and bought 35 shares of Visa [V], regrettably @ 64.97 (as it's kicking back down a little bit, nice.) I tried to place a market order last night for open @ 58.33, but I didn't have my funds settled yet and couldn't. I should've bought earlier today, but instead kept waivering and finally decided to pull the trigger at the top of the curve. Stupid, but I think it's going to bounce into the 70s next week.

If it drops below 59, I'll sell. If it hits 75, I'll sell.

Wednesday, March 19, 2008

Considering Visa...

AAPL129.67-3.15(-2.37%)
GOOG432.00-7.16(-1.63%)
BRK.B4,265.25-40.25(-0.93%)
Value:4,826.92-50.56(-1.05%)
Correcting from the high yesterday, as expected.

I'm considering pushing a medium play into Visa [V]. They just had their IPO two days ago and they're hovering in the $56 range, having opened at $44. I'm thinking in the short term, they could range up to near $70-$75, but that'd mostly be on hype. I've heard some back-of-napkin value calculations putting their actual value at $40 and that's a big hype bubble to hope for. Either way, let's check back in in a week. I'm predicting mid-60s by this time next week.

(Baseless guess: small gain tomorrow, minor correction to follow, more growth back the next week.)

Liquidity limitations and considering jumping to ThinkOrSwim as my brokerage are all that's keeping me from buying. Let's see how I'd do in imaginary world, assuming I could buy 40 shares at open, shall we?

Tuesday, March 18, 2008

What happens to Berkshire Hathaway when Warren Buffet dies?

The Oracle of Omaha is 77 years old and though he's "never felt better," a lot of people wonder what will happen to Berkshire Hathaway both from a share value/price perspective and an ownership/succession perspective.

Berskhire is a fascinating holding company because of how closely it represents the genius of one man. Mr. Buffet has built the organization in a manner that intractably reflects what he deems to be in the best interest of himself and equally, his shareholders. He guides all the plays and is wholly involved in every decision—he's not running things from the sidelines; the success of BRK is his, near-completely.

When he dies, BRK will slip quite a bit; perhaps as much as 20%, knock on wood. That day will represent the best single day one could buy BRK because of one simple concept: intrinsic value. The pure, intrinsic value of Berkshire is the mark-to-market value of all of its holdings at any given point. Mr. Buffet or no, the company's holdings value is closer to the $5,500-$6,000/B-share mark. BRK stays out of high risk, high-liability holdings by its nature and has a lot of flexibility/cushion from its wonderful insurance float. Because of this, it has high earnings, low debt and immense stability even when facing recession (an opportunity to buy up undervalued, high-potential companies, says Buffet) or in the face of inflation.

That said, there is some very clear, high value add from Mr. Buffet's leadership. While there are others intimately acquainted with his strategies and approaches and ethics towards running the company, he has professed an exception quality of wisdom and patience with a flair towards risk aversion and greed aversion in just the right quantities. While he maintains a list of his own hand-picked successors should the need arise, we can only hope that they'd be wise enough to continue using his formula and stay the course.

Which is to say, beyond an initial massive shock in the market and BRK at large, (if that; most BRK holders know Warren's approach and succession plans and would likely not be too phased at first) the stock will recover swiftly because of how undervalued it will quickly become. What happens past that will be in large part a function of who is named successor and the confidence level a passed on Buffet is able to instill in shareholders in them, in addition to how they perform straight away.

For now, I'd much prefer Mr. Buffet alive and well. As he says in his BRK owner's manual:
Lest we end on a morbid note, I also want to assure you that I have never felt better. I love running Berkshire, and if enjoying life promotes longevity, Methuselah’s record is in jeopardy.

The Fed cuts interest rates, Goldman Sachs & Lehman aren't bleeding so bad, everyone's happy!

AAPL132.82+6.09(4.81%)
GOOG439.16+19.29(4.59%)
BRK.B4,305.50+60.50(1.43%)
Value:4,877.4885.88(1.76%)

On news that Goldman Sachs and Lehman Brothers aren't eating it quite as hard as everyone (themselves included) expected, and the Fed cutting yet another chunk out of the intra-rate, there was much rejoicing today as the Dow climbed 420 points.

Lehman Brothers (LEH) climbed 13.76 to close at 45.51 for a 43.34% gain on the day. Damn. Bear Stearns had some help with more short covers and rumors of a higher deal. More talk about how "orderly bankruptcy" would net shareholders more than the paltry steal-at-twice-the-price $2/share ($250M *total*) JPM offer kept hopes for another offer up and optimistic. (The shareholders have to approve the JPM deal and 30%+ of BSC shares are owned by VERY FUCKING PISSED OFF BSC employees. Others aren't so sure.

(Fun side story: My brother Steve is playing a stock market simulator for his stock market class in high school. I told him last night that BSC was going to rally today while holding on for a deal. His simulator doesn't let him place orders under $5/share to prevent massive swings on highly volatile penny stocks, etc. So, since BSC closed at $4.81, he places a limit order at $5, thinking as soon as it passed by $5, his $25k play money order would be executed and he could ride the wave. Except that after-hours pushed the open to $5.50, the limit never triggered and he didn't get in til $6-or-so, losing on the day. BSC peaked at $8.50 and would've made a hefty sum for the wise. The question is if you're going in, do you hold your position long for hope of a better deal, or exit at the quick 45% profit? BSC closed $5.91, up $1.10/22.87%; not bad for a day's work either way.)