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The (un)Official Thread for all the 'Closet' Day Traders (and other spurious advice)
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jcoley2
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2008-11-13, 13:39

OK, I have decided to start another thread for those of us that want to discuss the markets. I realize now I should not be posting investment ideas in the "FInancial Storm" thread.

Here are my ideas for things that should be discussed in this thread:

1. Market Directional ideas
2. Specific stock ideas
3. Asset Allocation ideas

As most of you know, I 'grew up' in the financial services industry, and although far from an expert, I do spend a considerable amount of my time focusing on the markets. I know a lot about the money management industry, having bought and sold several asset managers over the past six years.

I am hoping that we can have a good thread to discuss the markets and hopefully collectively together avoid some pitfalls.

As far as the market, (and I posted this in another thread), we are at a triple bottom right now:

10/10/08 intra-day low: Dow 7894 and S&P 835.8

Retest low on intra-day 10/24/08: Dow 8045 and S&P 837.0

Market briefly today breached this area but currently above it.

I have been in cash in all my IRAs since June 2007 when I sold everything I could sell, and now have just bought back a 15% weighting in a combination of DIAs and SPYs. I hope we hold here but in truth, if it were to go lower, I am going to buy more. I felt a year and half ago we could test the lows that were established back the week after 9/11 (I think it was a 7400 Dow), but I am trying not to be greedy and buy some now.

So welcome to the new thread! Hope everyone likes it!!!

Now that I got a job, I can buy more Apple products!
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jcoley2
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2008-11-13, 14:55

I would suggest anyone trading to tighten their stops--this market bounced very hard off the bottom. I have move my stops to:

DIA: $85.00
SPY: $87.50

No use giving it all away if there is a late day wave of selling.

Now that I got a job, I can buy more Apple products!
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ezkcdude
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2008-11-13, 15:33

Good idea for a thread. I'll bite.

I will start with my favorite stock, Intuitive Surgical (ISRG). I've had it for years (since '99 or '00, actually I initially had Computer Motion - RBOT - which was then purchased by ISRG). Fears about hospitals cutting back big item purchases (one of the ISRG robots cost about $1.5 million), combined with this "downtick" we're in has driven the price from a high of around $350 (Dec. '07) to $150 today. Even with that drop, ISRG was one of the Top 5 gainers on the S&P 500 during Bush's 8 years in office. Unfortunately, most of my gains have been wiped out on it, since I already bought twice on the way down. My average cost before this year was $16, now it's $139. That said, I think it's still a great stock to own "going forward". They have the surgical robotics market to themselves for the foreseeable future, and they beat expectations every quarter running for years now, with no end in sight. Any thoughts?

p.s. I'm not a day trader obviously, just buy and hold.
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Windswept
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2008-11-13, 16:36

Quote:
Originally Posted by ezkcdude View Post
Good idea for a thread. I'll bite.

I will start with my favorite stock, Intuitive Surgical (ISRG). I've had it for years (since '99 or '00, actually I initially had Computer Motion - RBOT - which was then purchased by ISRG). [snip]

They have the surgical robotics market to themselves for the foreseeable future, and they beat expectations every quarter running for years now, with no end in sight. Any thoughts?
I'm sure you researched this stock back when you first bought it, but have you checked *lately* to see if they have any competitors that have come upon the scene? It does sound like a great company if they've continually beat expectations.

I've been very interested in biotech stocks. Someone just posted an interesting article in the "Daily News" thread about getting rid of HIV. I guess I'll have to go check out the link, because it sounds like a *great* investment opportunity could be on the horizon with that story, not just for HIV, but for all the many ailments that plague us.

The treatment (gene therapy, I think) completely got rid of any signs of HIV, though it was prohibitively expensive and took a fair amount of time. Sound like a winner to me. Have you (or jcoley) bought any of the gene companies, or even looked into them?

I am a 'buy and hold' sort of person too, and I thought that if I bought good stocks and held them, I'd be okay. But I got into the market (as a novice) when it was booming ten years ago; so, unfortunately, I bought all my first shares at a historic 'top of the market'. All in all, it has been a tough ten years, with the tech cataclysm in 2000 or so, 9/11, and now this latest catastrophic ordeal.

I should have put everything into cash like jcoley did, but I didn't, and now I can't. I'll just have to leave everything in place and hope the market goes back up.

I've bought Apple about five different times over the course of a few years. The last time I bought, it was at $170. God only knows how long it'll take to ever get back to 'that'. *sigh*

Your company above deals with robots that perform surgery, I presume. I was thinking that companies that make joint replacement parts would be good to look into, with the massive boomer generation moving into the hip-and-knee-replacement time of their lives. Have you or jcoley determined a good company for that? If so, what's the name, if you don't mind saying?

I have a fair amount of Amgen, and I think it has held its own pretty well. I probably would keep it, even if I were to sell others.

I'd also like to invest in some alternative energy companies, but have only done a small amount of research so far. Any ideas for those?

So, recommendations needed for names of good companies in these categories, if anyone has suggestions:

- joint replacement design and manufacture

- alternative energies

- gene therapy
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ezkcdude
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2008-11-13, 17:23

So, my background is that I have a PhD in biomedical engineering. I'm not a molecular biologist or geneticist but I think I have a fairly good grasp on many of these biotech technologies. My take-home message:

Be very careful with biotech stocks!

For every company like ISRG (which is not really a true biotech) or Gilead (which is actually located in my home town), there are tons of companies that you've never heard of that went under. I've had plenty of those over the years. To make a long story short, it helps greatly if you know science behind the company, but even that is often not enough to predict which companies will succeed. In my experience, it really is a sort of needle in a haystack. If you are young, certainly biotech can make up part of your portfolio, but I would limit it to no more than 20% or so, and even within that, be very selective, and don't get into something just because someone tells you it's "the next big thing". Of course, I just did that with my post above, right? And let me do it again below.

Getting back to ISRG - there really aren't any competitors right now in that space (surgical robotics). And luckily, their market cap is big enough now ($6 billion), that it is unlikely they will bought any time soon. These devices need to be FDA approved, and to my knowledge, it is years until something actually comes into the market that can compete. I also like the business model. Once a hospital buys one of these devices, they also need to buy tons of accessories and consumables to go along with it. They could be potentially become like Gilette for the surgical robotics industries. I should also point out that even though the stock is at a hefty $150, the EPS is 5, so the P/E is 30 - which could be considered a great bargain for a growing company in an emerging industry.
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artesc
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2008-11-13, 17:28

I've actually been day trading AAPL and little bit of some other companies (bear stearns, jp morgan, gm) for about 8 months now. I started out with 2000 of saved up cash (i'm just a student) and was like, "what the hell?" I've had some ups and down, but all in all I've netted about $1500 dollars. Granted, I think most of this is luck since I never base my buys/sells on anything other than the daily mac news and my my own intuition (ok, wild ass guessing ) take for example today, the stock was dropping fast in the morning but I didn't think it would fall below 90 (i mean, c'mon, 90?! for apple) so i bought at 90.67 Of course when it fell down to 86 i was like "oh shit!" then I sold at 95. Yay.

the way I look at things, the market will eventually go up (even if it takes a couple months) so as long as i invest it companies I know won't go bankrupt (bear stearns....bad example) i have nothing to lose since we are in a recessionary period and stocks should be under valued, so i might as well play it dangerously. it has worked for me so well, although i don't know what i'll do once the economy is back up (if ever) and it can only go back down....hmmm.

artesc all the way!
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jcoley2
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2008-11-13, 18:13

Cramer exposing to sell tech tomorrow on his show tonight--worth listening to if you have the chance.

I got stopped out of almost all my long positions today o DIA and SPY while I was out coaching football. I am little surprised how far rallied in the last hour. I think I will sell everything else out tomorrow on open and sit on the sidelines.

Now that I got a job, I can buy more Apple products!
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veryamusing
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2008-11-13, 23:37

I think the best way to invest your money is to buy and hold a low-cost total stock market index fund, like Vanguard's VTSMX. You can even buy the ETF, if you prefer.

In my opinion, the only decision you need to make is your desired asset allocation based on your risk aversion. For an even easier approach, consider Vanguard's Target Retirement funds.

It's impossible to time the market, and the transactions costs day traders incur wipe out most (all?) of their gains. What about the tax considerations? Or correct me if I'm wrong...

Lastly, if you don't mind me asking, is the money you're trading with for retirement, or in how many years do you anticipate needing this money? Do you trade for fun? If so, there's no harm, but I'd seriously caution you to not take on such great unsystematic (firm-specific) risk, if at all possible.

Best wishes.

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jcoley2
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2008-11-14, 07:44

Quote:
Originally Posted by veryamusing View Post
Lastly, if you don't mind me asking, is the money you're trading with for retirement, or in how many years do you anticipate needing this money? Do you trade for fun? If so, there's no harm, but I'd seriously caution you to not take on such great unsystematic (firm-specific) risk, if at all possible.

Best wishes.

I trade both my retirement accounts and money i have in my after-tax savings accounts. I tend, though, to take a longer term view on the retirement accounts: I'm 49 and do not plan to start taking the IRA money until I am in my 60s.

Turning the focus on today, this Friday is important as it is the final day for many hedge funds to get their notification for redemption for 12/31/08. If the notifications come in lower than expected, you could see net buying today. If they are higher, then the opposite will occur. They have already raised a lot of cash so hard to really know which way it is going to break.

Personally I am looking for some profit taking and I am going to sell out the remaining DIAs and SPYs I bought yesterday and go back to cash.

Now that I got a job, I can buy more Apple products!
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jcoley2
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2008-11-15, 08:23

Tech definitely saw some profit taking yesterday. With the Broad indices down 3.82% (Dow) and 4.99% (S&P), many names where down 6-10%. Interestingly, given all the press about firms reducing their advertising budgets, GOOG was only down 0.66%.

Next week looks to be dominated by the possible bailout of the auto industry. Right now it does not appear their is any political will to pass a bailout this session in Congress, but you are already seeing articles trying to put pressure on Congress:

http://www.bloomberg.com/apps/news?p...7Ao&refer=home

Cramer last night was indicating that the collapse of the auto industry would cause the Dow to drop 2000 points to 6000.

Now that I got a job, I can buy more Apple products!
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drewprops
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2008-11-15, 08:59

I've just been reading a couple of articles about the pending collapse of the auto industry and the ability of a manufacturer, say GM, to go into Chapter 11. Securing financing while in Chapter 11 is one hurdle, but the bigger fear is that they simply cannot move product while in bankruptcy because consumers won't feel safe buying product from a company IN bankruptcy.... a chicken and egg situation.

That information paired with Cramer's prediction poses the question: when will a run begin?

Steve Jobs ate my cat's watermelon.
Captain Drew on Twitter
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Taskiss
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2008-11-15, 12:45

Christmas quite probably will suck, and that bad news will drive stocks even lower. It's a good time to buy and hold, but the best time to do that seems to be still ahead.

I pulled out of stocks in August of this year, and actually pushed everything into CD's for personal reasons, and I'll pull that after the fallout that I'm sure will happen in 2009.

...unless Apple becomes available at 80, in which case I'm going to buy and hold as much as I can talk my wife into letting me.


real hackers don't use sigs
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Robo
Formerly Roboman, still
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2008-11-15, 16:15

Quote:
Originally Posted by Taskiss View Post
Christmas quite probably will suck, and that bad news will drive stocks even lower. It's a good time to buy and hold, but the best time to do that seems to be still ahead.

I pulled out of stocks in August of this year, and actually pushed everything into CD's for personal reasons, and I'll pull that after the fallout that I'm sure will happen in 2009.

...unless Apple becomes available at 80, in which case I'm going to buy and hold as much as I can talk my wife into letting me.

I'm actually thinking about buying a few (very few) shares of AAPL, just because I'm sure it will go back up, eventually (amirite?).

And I am, of course, an Apple fan. So there's that too.

And yeah, Christmas will suck - but I don't get it. The big box stores have awful Black Friday deals this year. Seriously - all of them, from Best Buy to Circuit City to Walmart all have horrible "doorbusters." Walmart's best deals were last week, for crying out loud (the surprise discounts on a Compaq notebook and lots of Sony product, including all PlayStations).

and i guess i've known it all along / the truth is, you have to be soft to be strong
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jcoley2
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2008-11-17, 07:38

Looks like another weak opening today. Could be an interesting day--very little came out of the G-20 meeting and there will be more discussion of bailing out GM and F. Don't expect a big trade-off but will be watching that $835 level on S&P.

Now that I got a job, I can buy more Apple products!
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ezkcdude
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2008-11-17, 08:26

Quote:
Originally Posted by jcoley2 View Post
Looks like another weak opening today. Could be an interesting day--very little came out of the G-20 meeting and there will be more discussion of bailing out GM and F. Don't expect a big trade-off but will be watching that $835 level on S&P.
Citi is laying off 50,000 employees. That may be a good cost cutting measure for them, but it's not good news for unemployment.
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ezkcdude
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2008-11-17, 13:21

Well, my ISRG is insanely oversold imho. I bought 10 more shares today at $129. The P/E is now around 25.
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jcoley2
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2008-11-19, 16:15

Man, that was one ugly close and last hour of trading. I bought the $83.50 level on the S&P 500 today for my IRAs and after-tax money, but I stopped loss the after-tax accounts at $83.00. Cool $3000 loss in 10 minutes Ouch.

Will be interesting to see what happens tonight in the over night trade.

Now that I got a job, I can buy more Apple products!
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ezkcdude
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2008-11-19, 18:00

It's a disaster. A freaking awful mess. I'm numb.
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scratt
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2008-11-19, 21:17

Warren Buffett is right...

Buy anything you can afford that's low. They will all come back...
I'd even be tempted by GM or Ford shares, if I was brave.. but I am not that brave stupid.
Particularly when I just read that the CEOs all spent US$20,000 each on private jet journeys to Washington to beg for money, when they could have flown coach for $300, or even first class for $800 on commercial airliners.. With management like that they are doomed.

I am sitting on Apple, some Oil Company shares... And a few other things.
I bought low, and they fluctuate around the price I bought them at daily.

As long as you are hanging in there for more than a couple of years you *cannot* lose. End of story.

'Remember, measure life by the moments that take your breath away, not by how many breaths you take'
Extreme Sports Cafe | ESC's blog | scratt's blog | @thescratt

Last edited by scratt : 2008-11-19 at 21:36.
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ezkcdude
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2008-11-19, 21:24

I'm really tempted to buy Citi here.
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scratt
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2008-11-19, 21:35

Citi might be fun!

One thing I'd suggest people do is look at shares *outside* the US.
I have a lot of share in companies traded on European stock exchanges in Euros, and based in Europe..

The $$ is going to offset a lot of recovery as well. It's all very well having AAPL back at say US$120 - US$150 per share (one day), but when the $$ has dropped to 50% of it's value or worse, that doesn't look so good... well, unless you live in the US... But then again prices will rise on imported goods anyway to reflect that..

A lot of people are saying a safe bet is Silver or Gold. Particularly Silver, as it always fairs well in these kinds of climate... Just sayin'.

'Remember, measure life by the moments that take your breath away, not by how many breaths you take'
Extreme Sports Cafe | ESC's blog | scratt's blog | @thescratt
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colivigan
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2008-11-19, 21:41

Silver and Gold!



* Licks *

Nothing.
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Ryan
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2008-11-19, 21:55

Quote:
Originally Posted by scratt View Post
Citi might be fun!

One thing I'd suggest people do is look at shares *outside* the US.
I have a lot of share in companies traded on European stock exchanges in Euros, and based in Europe..

The $$ is going to offset a lot of recovery as well. It's all very well having AAPL back at say US$120 - US$150 per share (one day), but when the $$ has dropped to 50% of it's value or worse, that doesn't look so good... well, unless you live in the US... But then again prices will rise on imported goods anyway to reflect that..

A lot of people are saying a safe bet is Silver or Gold. Particularly Silver, as it always fairs well in these kinds of climate... Just sayin'.
I just bought some shares of a SPDR gold ETF a couple of weeks ago. It's holding relatively steady.
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jcoley2
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2008-11-20, 16:01

I am buying the close. Got some DIAs at $75.60 and some SPYs at $76.78. I am not about 35% invested in my retirement accounts. Feels like crap (but it generally does at the bottom.)

Did not invest any of my after-tax living money yet.

Now that I got a job, I can buy more Apple products!
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ezkcdude
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2008-11-20, 16:36

I saw this on the Citi message board as a proposal:

Quote:
Pass a Wind-Fall Capital Gains Tax of 65% on ALL short sales retroactive to 01/01/08.
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ezkcdude
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2008-11-26, 13:05

Glad I kept my C shares.

I just went out of my comfort zone today and bought a couple of "accidental" high-yielders as Cramer keeps recommending: CEL (an Israeli cellcomm) and PDS (drilling and oil/natural gas services company).
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jcoley2
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2008-12-02, 08:01

Ok, market got slammed again yesterday. Clearly the market is focused on the lack of earnings (esp. in retail and banking), but there should be no surprised there. Also, Government indicated that recession started in Dec. 2007--again no surprise there.

I think today will be buying day. We have seen good support on Dow from 7900-8300, and we are right in the middle of that support level.

Now that I got a job, I can buy more Apple products!
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scratt
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2008-12-02, 08:11

Time to buy moare Appple!!!
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ezkcdude
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2008-12-02, 14:24

Quote:
Originally Posted by jcoley2 View Post
Ok, market got slammed again yesterday. Clearly the market is focused on the lack of earnings (esp. in retail and banking), but there should be no surprised there. Also, Government indicated that recession started in Dec. 2007--again no surprise there.

I think today will be buying day. We have seen good support on Dow from 7900-8300, and we are right in the middle of that support level.
I sold half my Citi shares last Friday. I think yesterday was mainly profit taking. The market had gone up 20% in two weeks or less.
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jcoley2
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2008-12-08, 23:18

I think tomorrow is going to be a very important day. We have had trouble getting through 9000 on Dow for any extended time period. Tomorrow we might test that area.

Now that I got a job, I can buy more Apple products!
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