Many Stocks are moving higher with the improvement in investors/traders psychology......
Lot of traders MAY be feeling left out ....as many sectors are showing strength......
Some traders are still feeling the pinch because their cost base is very high.....
Most investors /traders are looking with horror @ their lost/low equity......
All of us are trying to figure out "how to recoup our equity"????
Recouping any loss in stock market IS very difficult......as stocks lose their value "rapidly"..but take a long time to crawl back higher......
Most stocks which have shown relative weakness in this freefall...WILL take forever to recover @ snail pace......2 step UP 1 step DOWN.....
Relative strength stocks NOT only will recover all the giveback faster ...but will go on to make new HIGHS......
Some stocks are already on the verge of breaking out...........
In every sector...there IS such a thing as strong stocks vs LAGGARDS.....
The idea IS to be in stocks......which hopefully will recover faster...so your equity will grow FASTER !!!
So how to play this improving investors/traders sentiment.....????
My suggestion will be...... to have a mix of strong stocks with some laggards ???
This way you will have "fast movers plus ....all boats being lifted stocks"
I do NOT hesitate to book a loss in "potential LAGGARDS to be in frontline stocks.....this way my equity is being put to work in the most effective & OPTIMIZED mode"
What IS OPTIMIZED mode ????
Say you have $50k to work with.....
You should put 75% of that money in "hot sectors/stocks which will move next day"
Other 25% CAN be put in stocks which you are in love with & think wall street got it all wrong....
This way you get to play analyst yourself & figure out your own favourite stocks to be IN....
Generally speaking LOWEST PE does NOT work in a fast-moving/improving markets........
If you look which stocks lost the-most...you will be surprised to find that lower PE got the brunt of freefall as they are generally in WEAK hands...who sell quickly @ the sign of down day....
Laggards have a tendency to trade in a very narrow range over & over????
We are in a market where "uncertainty will remain until august"...thus markets will remain volatile & range bound.......
But...strong stocks will recoup all loss and will go on to make new highs !!!
So...which stocks are looking strong......and generally they are High PE????
Here IS the list of recent movers...
NO guarantee that they will continue to move higher......
RIMM
AAPL
ISRG
FSLR
X
Now.....to OPTIMIZE your return would it NOT be a smart strategy to allocate 100% of your capital into all 5 stocks?????
This IS just an example of how to put money to work immediately in a diversified mode....
But .....every investors & traders have their own way to put their money to work ...some investors/traders are actually afraid to be in the stocks given in the example.....
I am "quite surprised by people who claim to know FA & TA inside out" have NEVER invested in any of the stock listed in example????
Amazingly the above listed stocks have outperformed for several years????
So....most will continue to be in LAGGARDS to hit the home run !!!!
I strongly recommend 75% hot/expensive & 25% bargain/laggards.....MAY work!!!
You have to realize that you cannot be in all stocks so your picks must be done with an analytical approach of FA/TA plus Tape!!!
Please do your own due diligence & manage your risk with stop loss.
Always find your OWN comfort level.
BLOG does NOT give buy or sell.
Saleem
11 comments:
Saleem.
Nice blog, as always. Lots to think about. The stocks you have listed are fast movers alright. Even if they don't stick and hold a move up, they are great trades if you got a quick finger. LOL.
It should be an exciting week coming up, with opportunities to make a buck. RIMM will have lots of action as the stock moves around pre ER. I may try to sell RIMM once and book a nice gain and see if it does any little intra day tests so that I could jump back in. Thats another one that I may miss the big move if I try, but it has been really nice to book decent profits whether or not they are huge or just good. Just good has been working really well for me over the last couple of weeks. I actually had a dream last night that I sold RIMM tomorrow for $123 and it tested back to $118 and I bought again. And in the end, I sold it again for $128. I guess I dreamed last night because you said to me on Friday, "can you dare to dream". Well I did Saleem. LOL.
I am keeping my eye on LDK as I traded it 3 times this past week with profitson two of the trades and one for even. Anything around $27 and I would enter again. If it breaks out then I missed it, because I wouldn't know how to predict if it would be safe to chase it. I do think that any retrace to $27 is a buy though IMO. I am just concentrating on taking what the market wants to give. If I get a 2-5% move on a stock, I am generally booking it.
Wishing you and everyone on the board a successful and prosperous week. Talk soon and thanks for sharing your thoughts with your blog. They are truly helpful.
Hi Doug,
The purpose of this BLOG is to TINKER with old habbits.....
I try to look @ stocks/markets from different angles.....
There is no one way to make money.....
But it is always good to challenge your own thought process....
LDK or any stocks are always good as long as you end up making money...
What I am doing with my LIVE portfolio...is showing a different way to go through this CRAZY market....
I do have some hot & some cold stocks....but ...for the most part I am moving ahead with my equity also.....
Trading IS a wise approach ..be it RIMM/AAPL or any other name....
Quite happy with your 3 quicky with LDK !!!
Saleem
No wonder we are in subprime crisis:
An internal JPMorgan Chase memo entitled "Zippy Cheats & Tricks" offers a peek into just the sort of dubious lending tactics that underpinned the U.S. housing market's deepening downward spiral.
AP
----------------------------------------------------- ---------------------------
Originally obtained by reporters at The Oregonian newspaper, the memo outlines step-by-step instructions on how to beef up mortgage applicants' stated incomes in order to help them qualify for home loans.
They read as follows:
"1. Make sure you input all income in base income. DO NOT break it down by overtime, commissions or bonus.
2. If your borrower is getting a gift, add it to a bank account along with the rest of the assets. Be sure to remove any mention of gift funds.
3. If you do not get (the desired results), try resubmitting with slightly higher income. Inch it up $500 to see if you can get the findings you want. Do the same for assets."
JPMorgan argues these were the wayward actions of a rogue employee who has since been fired, and by no means represent company policy.
Hi Trashcan,
Yes ...sub-prime is a real live version of "greed is good"...which is ending as "horror movie"
Guess who is getting burned this time....."greed is horror...WS firms"
Financials are getting a good "kicking...sub-prime style"
Saleem
Hi Saleem. You are always looking for ways to help. Thanks. I stopped out of MCRS. Still hold RIMM, ISRG, POT, KSU, CELG, TITN and HXM. Also my foreign ETF/Energy/Alt Energy long term group has been doing great, even going up on big US down days.
Hi Minaccess,
Thanks for your appreciative note.
I am glad that all your ETF has come alive.....
Your POT also belongs in my todays list of strong stocks.....
Your trading portfolio looks ready for lift off !!!
Saleem
New news regarding LDK, which is not out yet but was published in Chineese papers, this could have a huge impact...
Keyword: LDK Company Photovoltaics Project
Background: The photovoltaics engineering project consists of three sub-projects. Specifically the 1600 MW silicon wafer project, a 15,000 ton high-purity poly-silicon feedstock project, both located in the economic development zone, and a poly-silicon feedstock factory located in Xia Village.
The 1600 MW project: LDK’s silicon wafer production reached 400 MW by end 2007, being the number one in Asia and the second in the world. In addition to the existing 400 MW production capability, LDK plans to add an extra 400 MW with a total investment of 2.7 billion yuan. The project timeline is from November 2007 to December 2008. After the completion of this phase of the project, a 400 MW new production result, increasing the company’s total capability to 800 MW.
Currently, the new 400 MW high-quality poly-silicon wafer product has reached a milestone of “three in-place and one flat” (electricity, water and plumbing are in-place, land is flattened, note added by LightSource). The detailed engineering review, engineering design and ordering of equipments are on-going. Part of the factory civil construction has begun. The plan is to spend 2.5 billion yuan by the end of this year, which brings all equipments to the completed factory to be commissioned and tested by this November. Production is expected by year-end. In the first quarter of 2008, the project has already spent 0.6 billion yuan.
In parallel, the first photovoltaics major, the study of photovoltaic materials production and applications, has been approved by the Department of Education. A solar science and engineering department was created at and in collaboration with the Xinyu College. The first round of 500 students were enrolled in the so-called LDK class.
LDK 21,000 ton high-purity poly-silicon project: LDK plan to construct two facilities with a total annual production capacity of 21,000 tons of high-purity poly-silicon. The one located in the economic development zone is for a 15,000 tons facility, with total investment of 9.5 billion yuan. The one located at the Xia Village in YuShui District is a 6000-ton facility, costing at 3.5 billion yuan. The timeline for these projects are October 2007 to December 2009.
Project progress: Environmental impact review, safety review, and industrial hygiene review are progressing as planned. Fluor, a Fortune-500 company, is subcontracted to manage the project, with 1 billion yuan already spent. Part of the civil construction is already complete. 5000 ton is expected to be reached by the 15000-ton facility by the end of year. The 6000-ton facility is expected to be in production by mid-December.
Below is the link and the original text for others to verify the accuracy of my translation.
Hi Troy,
Thanks for your ongoing efforts to update all of us on everything LDK.
2nd half looks very strong for LDK !!!
Saleem
Saleem,
Interesting news on LDK. The stock jumped from 22 - 29 this week alone with no news. I thought it was just short covering. Maybe this thing will really go with the news.
Hi Standards,
Solar are definitely on upswing.
LDK news will get better & better as 2nd half approaches....which IS only 3 months away.
Saleem
Check out QTWW, good news today....
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