Saturday, December 31, 2011

Stock Market and Risk/Reward

Happy New Year to everybody! Stock market Double has got me really juiced about the year to come. We started chronicling my attempt to double $10k in the market in less than one year on December 12, 2011. So far the account is up 17%, not bad right?

This endeavor started me thinking of the risk/reward factor when it comes to investing. Risk creates anxiety and fear, both of these emotions effect investors' decision making. I myself, love that this is true. Other people's fears is what creates opportunity to profit. A classic example of this would the BP Oil Spill. That occurrence has served as a model for my investing. BP stock got hammered and cut in half in the beginning of 2010. It went from over to 54 to less than 27 in a few months. Everyday there was doomsday report from the media. The stock then proceeded to go from 27 to over 40 in a month. Now that is a great risk/reward opportunity. Meaning, the risk was that yes, if you got in at 27, maybe it could have gone down even further but quite frankly, so what? BP is a behemoth that like any other oil company deals with oil spills all of the time. For sure they are structured to expect this kind of setback but investors didn't really see it that way (see fear) and sold it down to half its value.

Point being, be happy that Wall Street has become an act now think later kind of community because this creates opportunity. When the dust settles and they start thinking again, the stock is going to rise and rise very fast. Take advantage of these opportunitiies.

Friday, December 30, 2011

Last Trading Day-Lets Talk about Options

As many of you know by now, I am blogging (I like that word) about turning $10k into at least $20k in the market in less than one year. I have a specific plan on how to accomplish this and it doesn't entail trading everyday, although I need to watch my positions carefully for resistance and support levels. The thing that I have found to be most challenging is sticking to the plan. With that said, I am confident I will attain my goal of doubling my Stock Market account (if I remain disciplined)

So as I sit and wait for prices to approach resistance/support, I am educating myself. To be specific, I am educating myself about options. The approach for options thus far has been to select great companies who I believe will go at at least 25% higher with expiration dates 3-7 months out. In my simulated account I own;

YUM, July $60 calls, bought 10 contracts at $3.60 each (4% gain)
GEOY, March $20 calls, bought 10 contracts at $3.60 each (2% gain)
CHD, July $45 calls, bought 10 contracts at $3.80 each (3% gain)

The question now is, "what is my exit strategy"?
Well I have decided I am going to experiment with 4 different exit strategies and see which of the 4 lead to the best results. The 4 are the following:
1. sell option when the stock price (not the option price) hits my target of 25% higher than when I bought it.
2. sell option if the option price is 50% more than I bought it at.
3. sell option if the option price is 100% more than I bought it at.
4. sell option very close to or at the expiration date no matter what the price.

In addition, part of the strategy at this point, which is subject to change, is that I will hold them until they either reach one of the 4 price points above or they expire worthless.

MARKET PREDICTION for 1/3/2012: DOWN
Prediction Record 5-1
Winning Pct. 84%


STOCK MARKET DOUBLE PORTFOLIO
Start Date: 12/12/2011
Starting balance: $10k
Current Balance (interday): $11,675
Gain: 17%

Thursday, December 29, 2011

PENNY STOCK UPDATE

This blog was created to record my experience attempting to double $10k in the market in less than one year. (see stats at bottom of post) Account is up 14% since the start on 12/12/11.
As I wait for my current position to reach a price point. I have started simulated accounts, one using options and another using penny stocks. The penny stock account is doing very well. up about 6% in 8 days.

PENNY STOCK update: ACCOUNT OPENED 12/21/11
paid
1. BIOF .57
2. DYSL $1.60
3. ACAD $1.25
4. TGC .70
5. GBNK $1.47

Current
1.BIOF .72 (26% gain)
2.DYSL $1.85 (15% gain)
3.ACAD $1.12 (12% loss)
4.TGC .70 (4% gain)
5.GBNK $1.42 (4% loss)
Important note about these picks: they are all viable companies with good fundamentals. I normally wait until good news pops to sell them or maybe I will do a Buffet and hold them forever..

MARKET PREDICTION for tomorrow 12/30/2011: DOWN
Prediction Record 4-1
Winning Pct. 80%

STOCK MARKET DOUBLE PORTFOLIO
Start Date: 12/12/2011
Starting balance: $10k
Current Balance (interday): $11,424
Gain: 14%

Wednesday, December 28, 2011

Tomorrow's Stock Market Direction

MARKET PREDICTION for tomorrow 12/29/2011: DOWN
Prediction Record 4-0
Winning Pct. 100%

MORE PENNY STOCKS

Before we get to those juicy penny stock picks; a quick update on the trials and tribulations of doubling $10k in the market in less than one year. It's been 11 trading days since we started our journey and we are up about 12%. I cant really complain about that, although for some reason I want to. During the same period, the S&P is up about 1%. I repeat the same thing over and over to myself and that is "I must remain both Patient and Disciplined" to achieve my goal. OK, on to those penny stocks.

PENNY STOCKS
On 12/21/11 I published:
"Penny Stocks worth Buying"
Below were the picks and their stock prices at the time

1. BIOF .57
2. DYSL $1.60
3. ACAD $1.25
4. TGC .70

On 12/23, GBNK was picked at $1.47


Today 12/28/11
1. BIOF .67 (gain 18%)
2. DYSL $1.72 (gain 7.5%)
3. ACAD $1.10 (loss 14%)
4. TGC .71 (gain 1%)
5. GBNK $1.45 (loss 1%)
all prices inter-day.
Important note about these picks, is that they are all viable companies with good fundamentals. I normally wait until good news pops to sell them. As you probably all know, when that happens with these kind of stocks-there is an explosion to the upside and they can go anywhere from 20-100% in one day. I will be a seller then. Until then, I need to wait.

And btw, the best thing for me to do on a day like today, is walk away from the computer. Otherwise, chances are, I will end up making some compulsive trade that will not be to my benefit. Happy Trading y'all. Check back later for the market prediction for tomorrow, will it be UP or DOWN?

Start Date: 12/12/2011
Starting balance: $10k
Current Balance (interday): $11,198
Gain: 12%

Tuesday, December 27, 2011

GEOY

Recapping the theme of this blog which is to double $10k in less than one year; I started on December 12, 2011. The account has gone from $10k to $11,523 in that time. The portfolio has one and only one position so far; 525 shares of GEOY. The shares were bought at $19.03 and are currently at $21.95. One of the most interesting things that I have found since 12/12/11 when I started this project, is that an insider has bought more than $12m worth of the stock in the last year, $10m of it coming in the past 3 months. There are all kinds of rumors flying around that the company will be sold in the near future.

At one time this year GEOY was nearly $45, it dropped down to as low as $18. Investors who have owned the stock are selling going into the end of the year for tax purposes, the result is that there has been an artificial cap on the price. In the new year, expect to see investors buying back into the stock. That buying in combination with talk of the company being acquired will propel the stock much higher in January.

Start Date: 12/12/2011
Starting balance: $10k
Current Balance (interday): $11,576
Gain: 15%

MARKET PREDICTION for tomorrow 12/28/2011: DOWN
Prediction Record 3-0
Winning Pct. 100%

Monday, December 26, 2011

Options Update

Goal: double 10k in less than one year, up 16% since dec 12, 2011. The stats are at the bottom of today's blog.

In the mean time, I been playing around with a simulated account using options; in my simulated account, I am going to add July $45 call options for chd, 10 contracts, investment $4840. Here are the results so far:

Current positions:
YUM, July $60 calls, 10 contracts at $3.60 each (3%gain)
GEOY, March $20 calls, 10 contracts at $3.60 each (14% gain)
CHD, July $45 calls, 10 contracts at $3.80 each




Start Date: 12/12/2011
Starting balance: $10k
Current Balance (interday): $11,576
Gain: 16%

Rally in the Market

Expect to see a strong rally after Tuesday going into the new year.


http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=DJIA&insttype=&freq=7&show=&time=3

5 day chart above looks like we are ready to break out.

Saturday, December 24, 2011

Retail Sales

I live in New York City and went Christmas shopping today. The stores were empty. Sales data will disappoint.

Happy Holidays to All!

Market Prediction for 12/26/2011: DOWN
Prediction Record 2-0
Winning Pct. 100%

Happy Holidays to everybody!

We are almost at the end of the year and I am thinking of ways to improve myself and improve my blog. The best way to do that is to help people make money in the stock market. Again, I want to repeat, what I have said before, it is a proven fact that most self directed people using an online broker-lose money. Well that begs the question, why does that happen? There are multitude of reasons. Let's keep it simple and list the things that will make you profitable:

1. DO NOT over trade
2. Pick a strategy and stay with it
3. Buy good companies with good fundamentals

If you do these 3 things alone, you will OUTPERFORM the market. But, people don't follow their own rules and the reasons are fear and greed.
The moral of the story is that we can all make money in the market by following the 3 rules above, it sounds too simple doesn't it?

Start Date: 12/12/2011
Starting balance: $10k
Current Balance (interday): $11,576
Gain: 16%

Friday, December 23, 2011

More Penny Stocks

Well actually, there is only one pick today; its either a long term hold or a good short term trade.

GBNK $1.47

cut and paste the 3 month chart, it is a thing of beauty. In addition, the bank has good fundamentals and will prosper going forward.

http://ycharts.com/companies/GBNK

Double $10k in less than one year update;

Start Date: 12/12/2011
Starting balance: $10k
Current Balance (interday): $11,534
Gain: 15%

More Options

For the new viewers, I created this blog to chronicle my attept to double 10k in the stock market in less than one year. The first and so far only buy was GEOY. The first trade was on 12/12/11, long 525 shares at 19.03. Yesterday it closed at 22.47, for a gain of 18%. The account has risen from $10k to $11,806.

Meanwhile, as I wait for GEOY to hit my target price (I'm not a day trader),
I am continuing my education by learning about options and have created a simulated account;

Current positions:
YUM, July $60 calls, 10 contracts at $3.60 each ($0 gain)
GEOY, March $20 calls, 10 contracts at $3.6 each (14% gain)

Market Prediction for 12/23/11 UP
record 2-0 100% winning pct.

Start Date: 12/12/2011
Starting balance: $10k
Current Balance (interday): $11,806
Gain: 18%

Wednesday, December 21, 2011

Stock Market Prediction for Thursday 12/22/2011

Market going higher tomorrow.
record: wins 1 losses 0

Penny Stocks

Prediction on market Movement; down today 12/21/2011

Penny Stocks worth Buying 12/21/2011
1. biof .57
2. dysl $1.60
3. acad $1.25
4. tgc .70

Real companies with real revenue/earnings.

This blog was started on December 12, 2011 to record my effort of doubling $10k in the market in less than one year; see below.

Start Date: 12/12/2011
Starting balance: $10k
Current Balance (interday): $11,681
Gain: 17%

Tuesday, December 20, 2011

Top 3% at Marketocracy


As I wait for my position to hit its price target, I have become very curious about options. Phil Davis, a contributor on Seekingalpha.com has run a virtual portfolio since the beginning of this year where he turned $10k into $100k. That was enough for me to start thinking that I should at least learn more about this option thing. As of today, my knowledge surrounding options is limited. I know they expire, you can make a lot of money fast and you can lose everything. That's about it.

But before I start, I want to toot my horn a little and tell everybody that I am now in the top THREE PERCENT of fund managers at MARKETOCRACY, where I am outperforming 97,000 other members (there are approximately 100,000 members).

OK, back to the options experiment; I hold a position in YUM in my Marketocracy account and I fully expect it to go go at least 25% higher in the next 6 months. Yum owns and runs Fast food restaurants like Pizza Hut, Taco Bell, and Kentucky Fried Chicken just to mention a few. Even in these tough times, they continue to grow revenue. Revenue is something you should be looking at nowadays when you are doing your DD. Anyway I chose them because of good fundamentals and their liquidity, as far as options go.

The Play is the July $60 calls which are $3.6, buying 10 contracts; total investment $6360.

Now, back to the business of doubling my account in less than one year.
Start date: 12/12/2011
Starting balance: $10k
Current balance: $11,785
Gain: 18%

Monday, December 19, 2011

More Insider Buying

You can't make these things up! Unbelievable. Something has got to be up. Check this out.
http://marketbrief.com/geoy/4/insider-trading/2011/12/19/9157963?s=st

BuyOut Speculation

In my attempt to double 10k in the stock market in less than a year, I read, research and experiment as much as i possibly can to get an edge. Of course, the more research you do, the more you find out. For example;


In July of this year, word was that GeoEye was in preliminary talks about a buyout, at the time the stock price was $35. It is now $22.30. If a buyout seemed attractive in July, it only stands to reason that now, at $22.30, it would be even more attractive. 


Also, a couple of days ago I wrote that an insider (Feinbeg), recently purchased more than 400,000 shares of the company's stock (actually nearly $10 million dollars worth).  It seems that the possibility of a buyout is very real.  I'd love to have a piece of that action.  A buyout at 30 would be $5 less than the stock price was in July.  For me, that would be a profit of more than 50%.  I am in at 19.03.  Hey, I can dream, cant I?


Start date: 12/12/2011
Starting balance: $10k
Current balance: $11,649
Gain: 16%  

Sunday, December 18, 2011

Investor or Trader

As I continue on my journey of trying to double $10k in the stock market in less than one year, I started thinking; What am I?   Investor or Trader?   I quickly decided that I am an investor. Why do I think this? The answer is simple; I invest in good companies. When I make a decision to buy a stock it is because it has passed several tests and/or screens. Adhering to a strict criteria for selecting stocks enables me to benefit in several ways.

1) if the stock goes south and I am in a losing position, I dont necessarily have to sell it because I have the security of knowing that the company has solid fundamentals and was under priced to begin with. There is nothing worse than holding some high flyer with questionable fundamentals when it starts a downward trend. You could lose 30, 40, even 50% really fast.
AND
2) a strict criteria reduces the emotion involved when deciding to buy or not to buy a stock.

Start date: 12/12/2011
Starting Account Balance: $10k
Current Account Balance: $12,400  
Gain: 24%

Saturday, December 17, 2011

Stock Market can be a Scary Place

Investing and/or trading in the stock market can be a little scary. The old adage is buy low-sell high. That is the principle idea behind the way I like to invest. But not all stocks are created equal, there are a few popular stocks out there that have gotten beaten up really bad and there are buyers out there who think investing in them maybe a good idea. The 3 that come to mind are First Solar, Netflix and Research in Motion (blackberry). Beaten down value? I don't think so.  The subsidies for solar are drying up. Netflix is a broken business model and Rimm should fire every computer engineer in the building.          

Friday, December 16, 2011

Insider Buying

It has been 4 days since I started this experience of trying to double $10k in the stock market in less than one year. Well, I have to pinch myself because the account is up 24%. Today GEOY is up over 7% because it was reported that an insider (Feinberg) bought more than 420,000 shares, which at today's closing price is about $9.7m. Thats alot of moolah! The assumption in the market is that he must know something we don't, you don't bet nearly 10 million dollars on the roll of the dice. Should be interesting to see what happens.

Start date: 12/12/2011
Starting Account Balance: $10k
Current Account Balance: $12,400 
Gain: 24%

Thursday, December 15, 2011

Trading: Discipline and Patience

In my efforts to double my stock account in less than a year, I must practice patience and discipline. These are the 2 virtues that are most valuable for me when trading. Stay with what works! I think it is natural for me to want to jump from trade to trade, it is my nature. I started this endeavor 3 days ago and I am up over 15%, not bad considering the dow is down about 300 points in the same time period. Inevitably, last night, I started thinking about taking profits. Now normally, this is not a bad thing depending on what your plan or strategy is. But in this particular case, taking profits would not be part of the plan that I had mapped out prior to the trade, so therefore, it would not be a good idea. Again, stay with what works and don't get too cute.

Starting Balance: $10,000.00
Current Balance: $11,512.00
% Gain                15%

Wednesday, December 14, 2011

Shorting

Just venting today, shorting at times, seems like a good idea. The problem is, half the time you cant find the shares to short. I read stories or articles from pundits who say they are going short on a stock and I am wondering where are they getting these shares? Any advice?

BTW, account is slightly up inter-day, not bad considering the dow is down about 100.

Tuesday, December 13, 2011

Why I Picked this Stock

The goal of this blog is to record what I do to achieve my goal of doubling $10k from my brokerage account in less than one year. So, considering the goal, I am not really interested in diversifying. Ideally, the plan is to pick one stock at a time that will go up more than 30%. If done successfully 3 consecutive times, I would achieve the goal of doubling the account in one year with room to spare. This is the beauty of compounding.

So here's the method; the stock pick is geoy. There are multiple reasons. Its easier if I just list them.
1. geoy was way oversold-the stock was $55 earlier this year, when we bought it, it was $19.03.
2. pe ratio was about 8.5
3. the short ratio was 4.1
4. GeoEye has really good financials, earnings growth has nearly doubled in the last year. Doubled!

so there you go, I'd say those were excellent reasons.

account stands at $11,113

we started yesterday and we are up 11% already.
It's 11:42pm in New York and futures are baby!  

 .

Stock Account up 5% this morning

position         paid          current price   

geoy              $19.03         $20.01                


initial investment       current portfolio value      

$10k                                $10,515.50                          


Hopefully, we are well on our way to achieving a double in less than one year.



GeoEye, Inc.

 (NasdaqGS: GEOY )
Real Time20.01 Up 1.00 (5.26%) 10:22AM EST
Last Trade:20.16
Trade Time:10:07AM EST
Change:Up 1.15 (6.05%)
Prev Close:19.01
Open:19.90
Bid:20.12 x 200
Ask:20.17 x 100
1y Target Est:36.36
Day's Range:19.06 - 20.20
52wk Range:17.98 - 44.68
Volume:70,696
Avg Vol (3m):286,780
Market Cap:447.27M
P/E (ttm):9.38
EPS (ttm):2.15
Div & Yield:N/A (N/A

Monday, December 12, 2011

GeoEye signs $56 million dollar contract

New Deal with Kongsberg
http://www.tmcnet.com/usubmit/2011/12/12...

(Contract is about $56 million)


First transaction;
buy 525 shares geoy at 19.03.
account value: $10,000
stock value     $  9,990
cash               $       10

Valuable Investing Lesson

Did you know that it is true that most self directed brokerage accounts LOSE $$? The reason: Too much trading. It has been proven that most strategies that have worked in the past will work again in the stock market, but you must stay with the strategy. Pick an entry and exit point on the trade and don't waver from the plan-we will all be better off because of it.

First transaction;
buy 525 shares geoy at 19.03.
account value: $10,000
stock value     $  9,990
cash               $       10

Stock Market Double

My goal is to double my money in the market in the next 12 months. I will use a real money account of $10,000 to start. Today is December 12, 2011.

First transaction;
buy 525 shares geoy at 19.03.
account value: $10,000
stock value     $  9,990
cash               $       10