UA Meets My Profile: Short Time

I found another stock that meets my recent profile of a POS.
1) IPO'd in 2007
2) Exploded for its first few months on the market
3) Has strong competition
4) Tanking like a boulder in a river

UA seems to have given its best shot in all possible markets. I only hope that it dosn't get cheap enough to get aquired by Nike or one of the other monsters that it is competing with. It's market cap (1.89 bil) just dropped below its enterprise value(1.96 bil) which is not a good sign. It has a 32% short interest which means some crazy announcement could cause an intense short squeeze.

UA is in an obvious downward trend. It recently tanked to $25 when Wachovia downgraded the stock because they believe UA will miss its target first Q of '08 because of an increased marketing expense. If marketing expenses are the only thing keeping this stock alive, its bound for the dead pool.

I went short half my position today and plan on selling the other half of my position around $45. If everything goes as planned I will buy back between $25 & $30.



Huge Week In Tech

This week has seen some huGe announcements from the tech industry. After getting pummeled in the recent "recession scare", some companies are looking like good takeover targets & some are just afraid. Here are the big tech stories this week in no particular order:

1) Amazon purchased Audible for $300 Million. Audible is the leading audio book company. This could cause some serious conflict of interest considering they are the main provider of audio books to iTunes.

2) Garmin is breaking into the cell phone market with the nuvifone. A GPS company could seriously stir things up in the cell phone industry. Is the first victim moto?

3) Motorola decided to spin off its cellphone unit. I guess they don't feel like they can hand with the new breed of phone manufacturers (AAPL & GRMN)

4) Tivo won a super important patent case against Echostar. Ever since generic DVR's came to market, there has been a misconception that Tivo's patents were not strong. Well as of yesterday, if a company wants their DVR to let you watch one show while recording the other, you have to license that tech from tivo. Now that Tivo's patents have proven themselves, it makes them a big takeover target.

5) Google missed it's analyst estimates for the first time ever yesterday. Sure profits were up 17% and revenue growth of an amazingly googlishious 51%, but that wasn't enough. GOOG is down almost $200 a share in the last 2 months. But the biggest tech news the night of GOOG's earnings weren't from GOOG.

6) Microsoft made a public offer to buy Yahoo! for $44.6 billion the night of GOOG's earnings report. Coincidence? I think not. MSFT is out to get GOOG and it looks like the timing is right.



Short VMW earnings

My short position in VMW went very well. I knew this company couldn't hold at the levels mentioned in the previous post. While the stock drifted against me soon after I sold short, their earnings announcement on Monday crushed it. They met analysts expectations, so what went wrong(right! for me)?

This was a classic example of of the market posting a premium on a star IPO. Every investor is looking for the next big IPO. When they set their estimates, what they really are doing is picking a number that they want the company to BEAT. When young companies can't BEAT their estimates, then the market punishes them.

VMW TradeI sold short at $77.55 on Thursday because VMW had tested it's support 3 times with no signs of a bounce. When I noticed earnings were being announced I was skeptical to hold such a large position because you never know what will happen after an announcement. I bought back half of my position 30 minutes before the close on Monday (earnings day) at $78.89.

After earnings were announced VMW started dropping like a rock in after hours. I watched it bounce off of $62 and then recover to the $67 area once the conference call started. When it went back down to $62.50 I covered the rest of my position in after hours.

Every time I have ever made a move in after hours I have regretted it (except for once with AAPL but that was a buy). It was no different here. I think I played this trade well but should have waited until market open Tuesday to cover. The stock opened @ $58.27 and went as low as $53.57 where it found support. If I would have stuck to my plan I would have covered in the low $50s. Either way I am glad I covered and happy with the trade.

First Half of position:
Bought @ 77.55 sold @ 78.89 = -1.72%

Second Half of position:
Bought @ 77.55 sold @ 62.50 = +19.4%

Success...




During a bear market, the only way to make money is to pick a dog, and sell it short. I have been mostly cash for some time now and I need to get it working for me.

When I have no idea which direction the market is going (like the last few weeks) I trade based on what the market is doing that day. On 12/11/07 I sold CROX short at $44.60 and bought it back at $42.70.

On 1/7/08 I sold CROX short first thing in the morning at $32 and have been holding ever since.

The market has been taking an absolute BEATING for the last month or so. The dow is down almost 3000 points and fear of recession is looming. I need to start finding stocks that I want to be short through this. I am looking for high flying fads. Expecially ones where the chart points to a potential gap down.

My first find so far is VMW. I loved the stock when it IPO'd. I think it it had too large a run and could break down if the market crumbles. There is some serious support at 71 which has been tested 3 times now. I think next time it tests the 71 level it will bust through. I went short this morning at $77.55 and will put a stop at about $80. I will look to buy back at its IPO price around $50 (if I can wait that long).







I literally heard sirens outside 10 minutes after the market opened today.




Money is debt

Woah... I never understood how money worked. This guy does an amazing job of explaining the history of money.



Now I see how/why our economy is so fuXed. We went from have money which was a true asset (because it was backed by gold) to money that is true debt (mortgages and credit cards). Why are banks the only institution that can "create" money? Once a new banking model is developed, it will revolutionize everything. I cant wait to invest in it.



Tripp'n on LDK

It may not be a drug, but I must have been hallucinating. This trade was one my my most memorable stock market experiences. Mistakes I will never make again, and and decisions I will never forget. What would you do if you went ALL IN on a stock that was destined for hell?






After posting my posit in on FMCN on Cake Financial yesterday and claiming to have a "long term focus", I woke up this morning to a pleasant surprise. FMCN is up 15% at $56 on news that their internal audit is complete and coverage was initiated by Susquehana Capital at "Positive" (whatever that means, I am seriously not a big fan of analysts).

"The Audit Committee concluded that nothing has come to its attention."
This had been a major drag on FMCN's stock and now it has a free ticket to new highs.

It is my belief that having the ability to change your mind on a dime is an extremely important asset in the world of trading. This might be the only place where shooting first and asking questions later is required.

I sold my position in FMCN 10 minutes ago @ $56, FMCN's fresh all time high. Sure I believe it is going higher, but not before taking a breather. I am up 35% in a 3 short months, any more and I am just being way too greedy.

I am going to look to get back in at the $50 level.




« Previous1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next »

Get notified next time I post. Three ways to subscribe:
RSS Email Twitter

© 2009 BrainBackup.net | All Rights Reserved.