Thursday, April 29, 2010

Flyer RMBS ready to Fly??

One of the stocks we mention as a "flyer" (high potential return, high risk) has been making thenews. Here is a recent mention in "Smart Money" / "Barrons."

If the court finds in its favor, the damages would be tripled to roughly $13 billion. Bulls deduct taxes from that result, divide it by Rambus' 117.5 million shares outstanding to determine that the company will enjoy a $66-per-share windfall.

Wednesday, April 28, 2010

Hope our Tweet helped investors avoid Tuesday's drop

On Monday, near the close, we tweeted about our Intermediate-term models turning neutral to slightly bearish. We are still long, but "took our foot off of the gas." Note that our intermediate models look like they may turn bullish again in a few days (depending on market action, of course).

If you want to follow our Twitter, note that we are "z_trader"

26Apr 340pm: Intermed-term stock signals turn neutral to slightly bearish; overall stock position is moderately bullish due to LT signal.

Saturday, April 24, 2010

Snippets from Barrons article on RMBS

Thanks to InvestorVillage posters, here are some snippets from today's article in Barrons on RMBS:

"So far, results have been mixed, even when Rambus (ticker: RMBS) ostensibly wins. A major settlement with Samsung Electronics (SSNGY) came in far below expectations. Yet Rambus boasts a $2.9 billion stock-market value, based largely on bulls' bet that its $12 billion lawsuit against Micron Technology (MU) and Hynix Semiconductor will succeed, producing a rich reward." (snip)
"Optimistic analysts say a victory could help propel the stock, recently around 25, up to 50." (snip)
(Reflecting the Micron/Hynix case) "If the court finds in its favor, the damages would be tripled to roughly $13 billion. Bulls deduct taxes from that result, divide it by Rambus' 117.5 million shares outstanding to determine that the company will enjoy a $66-per-share windfall." (snip)
(Reflecting on Samsung's settlement for $900 million), "If Hynix, based in Korea, and Micron, based in Boise, Idaho, settle for $900 million each, that would lead to a total of $1.8 billion, which after taxes shrinks to $1.1 billion, or $9 a share."

Friday, April 23, 2010

Bring Your Child to Work Day

Thought I would mark this day because it was a fun and interesting trading day, combined with "Bring Your Child to Work Day." We talked to our child about: saving and earning interest -- and then bonds, stocks (pieces of a company), and then trading (gold, oil, commodities).

I use computerized trading systems, with the main drivers being long-term indicators and intermediate "overbought-oversold" systems. We also have short-term systems for the S&P 500 futures -- which help to manage risk during the day.

The stock market opened scarily lower yesterday (Thursday) -- but the indicators remained strongly long, so we took an additional long position at 9:48 AM eastern time, with the S&P around 1192. This market continues to defy the odds -- and seems to continually climb. As we have blogged before, there are a lot of naysayers -- which may allow us to continue to climb the contrarian "wall of worry."

Chart forS&P 500 INDEX,RTH (^GSPC)

This "Bring Your Child to Work Day" trade did well, with the market closing at around 1208 (so bought at 1192, sold at 1208). We were saying that it's not always "this easy..." But at least it covers allowance for the foreseeable future...

Tuesday, April 20, 2010

Stepping on the Gas...

At current market prices, our intermediate-term stock systems are going long at the close today. These intermediate-term indicators have flip-flopped around a neutral position -- keeping us in a somewhat cautious stance the past few months. Note that based on a look-ahead -- and depending on market action -- this system's signal may be relatively short-term.

Our long-term indicators have been long for a while, so net-net -- we will go from a medium-sized long position to a full-sized long position.

Friday, April 16, 2010

Intermediate Stock Signals Remain Neutral but...

look like they will turn positive in a few days depending on market action. This information includes today's (Friday's) move lower as of 3:25 pm on April 16th. Note that we always update our blog with new stock signals.

Long-term indicators remain bullish.

Monday, April 12, 2010

Sports Investing Book # 1

I was asked to help edit a book on "Sports Investing" -- which applies concepts of contrarian investing to the sports marketplace. The book has been holding the # 1 spot in Amazon's "Sports>Gambling" category.

The academic viewpoint will interest everyone from the casual sports bettor trying to improve results - to the professional sports gambler looking for additional angles - to the Wall Street trader researching additional markets to trade.

Public sentiment and betting activity cause the sports marketplace to act irrationally, in a way which can be measured and exploited. The massive flow of public wagers force betting lines to fluctuate like an inefficient market. Point spreads, betting line movement, public betting percentages, money management, statistical analysis, and other important topics are studied. The implementation of contrarian investing – and theories such as "Betting against the Public" and "Smart Money" are developed.

Thursday, April 8, 2010

Market's Continued Strength & Reason for Systems

The stock market has continued to march higher, with many analysts becoming increasingly worried. I have also worried a bit, as the market has moved relentlessly higher. On one hand, I chalked up the rally to the "wall of worry" that we sometimes discuss -- as a contrarian indicator. On the other hand, friends and associates have pointed out how the market rallied for X days in a row; or something like 95% of the last Y days.

This is one of the main reasons why traders like to use trading systems: discipline.

Our long-term indicators remain strongly bullish. Our overbought/oversold indicators have flipped between slightly bearish to slightly bullish and are currently neutral. As a result we have been Long -- and remain Long -- in this market.