to accept is always not a way to learn. As bill gates said during his speech on harvard commencement on 1/10," I have realized that, to be odd can't guarantee your success" , a word to point out no people can be right all the time. And based on my experience to understand the big market, I strongly believe to learn from yourself or to overcome the barrier that stop yourself from further improvement is the trick to make your right. I have been writing the market review for about a year since my first attempt on STOCK board last year, and really enjoy sharing my view with all the friends here. All of the methods I have been using to predict the market have been totally introduced to all of you, without any reservation. And it is almost time for me to calm down and think about the new strategy to invest now. Carol has asked me so many times that when I can start to focus on the insider buying strategy? yes, I have to admit that not much time I have if I continue to monitor the market as what I am doing now. Therefore, to allow my focus onto new strategy development, someone must take the responsibility of keeping us posted about the market performance. Many friends here have improved a lot or have known a lot about market prediction such as bobobobo dude, brisk,bobby,auv and skiii. Carol, Fanzhi are both improving their technique. I would think it would be better that most of us contribute your thinking about market each week or daily here so that we all can benefit. Would it be a good idea?
Wait for you guys answer.
Saturday, June 9, 2007
Thursday, June 7, 2007
We experienced the biggest down day in the past 1 month
Today marks the third day since the correction we have anticipated. The sell off appear s in every sector from the leader sector energy, utility , transportation sectors to retailer, healthcare sectors. The market breath is really gloomy. The volume picked up while a distribution is monitored. What we have seen is that 27 stocks from TOP 100 stocks drop more than 2 percent with increasing volume and no stock increase for more than 2 percent. We normally would expect a 3% down from down starting from correction and it seems currently market gets into a little bit over reaction. If you wanna find the superficial reason is that market reacts to the economy data that inflation could keep the FED off the table to cut rate in the near future. This is the assumption that market rallied in the past month and it disappears now.However you should look at thing from different perspectives if you are familiar with how market works.
This provides us an good opportunity to review our investment strategy, right or wrong, speculation or investment. Most of the time, don't mix the two concepts and you can react quite well in front of such situation. For example, I am currently holding AAPL, trying to speculate it until the release of iphone by the end of this month. The stop sell is loose $120 (bought at $113) to guarantee this purpose. But people would say that why not hold AAPL if it dips below that point? Yes, that is a good question you have to ask yourself what your plan is before entering such a trade. If you believe AAPL will have an amazing future, current price would be cheap. However for me, I can't fully evaluate AAPL's price until I can see how well the iphone works. Its current strategy with T really concerns me about its spread. The market would come back and prove whether you are right or wrong.
Still, if the stocks are fundamental sounds stocks, and you are targeting the investment purpose through your due diligence, your future is there, bright and sunny:)
This provides us an good opportunity to review our investment strategy, right or wrong, speculation or investment. Most of the time, don't mix the two concepts and you can react quite well in front of such situation. For example, I am currently holding AAPL, trying to speculate it until the release of iphone by the end of this month. The stop sell is loose $120 (bought at $113) to guarantee this purpose. But people would say that why not hold AAPL if it dips below that point? Yes, that is a good question you have to ask yourself what your plan is before entering such a trade. If you believe AAPL will have an amazing future, current price would be cheap. However for me, I can't fully evaluate AAPL's price until I can see how well the iphone works. Its current strategy with T really concerns me about its spread. The market would come back and prove whether you are right or wrong.
Still, if the stocks are fundamental sounds stocks, and you are targeting the investment purpose through your due diligence, your future is there, bright and sunny:)
Wednesday, June 6, 2007
Calls for Registration-- Tracing Insider buying Strategy
The forum is closed temporarily.
===================================
Dear friends here,
Since the initialization of this activity last week, we have received kind offer from many friends here. Carol offers the conference call, and Brisk helps us to setup a forum to discuss such a strategy. The reason to keep such a forum a closed one is simple, we want you to join but not abuse it because it would become an asset of all the contributors here. And we would get it public after we got satisfied results.
Now the forum has been setup, friends here are welcome to join. To get into access, you need to register a username in http://www.fortuneseeds.com/ and then leave a note here with your username. I will add them into the access list. We don't have any limitation but welcome anyone to contribute.
Thanks for understanding and waiting you there!
Metronic
===================================
Dear friends here,
Since the initialization of this activity last week, we have received kind offer from many friends here. Carol offers the conference call, and Brisk helps us to setup a forum to discuss such a strategy. The reason to keep such a forum a closed one is simple, we want you to join but not abuse it because it would become an asset of all the contributors here. And we would get it public after we got satisfied results.
Now the forum has been setup, friends here are welcome to join. To get into access, you need to register a username in http://www.fortuneseeds.com/ and then leave a note here with your username. I will add them into the access list. We don't have any limitation but welcome anyone to contribute.
Thanks for understanding and waiting you there!
Metronic
Motley shares the similar opinions as us in term of AOB 's share offering
As we pointed out before that AOB is not in shortage of money, because it has a free cash flow. The reason he offers new shares could only be explained that he has a buyout task or expansion task in Queue. The motley fool shares the same idea as we did.
So if you want , can check which could be the buyout target for AOB
==============
Another Buyout in the Works for AOB?
By Brian Lawler June 5, 2007
34
Recommendations
Whenever shares drop by nearly double-digit percentage points, something bad is usually amiss. Yesterday Chinese health-care nutritional supplement provider American Oriental Bioengineering (NYSE: AOB) suffered this fate after it announced that a large dilutive share offering was in the works.
AOB has 65 million shares outstanding, not including warrants. So the new equity offering of up to 15 million shares (not including the 2 million shares the founder and CEO is selling) represents up to 23% dilution to shareholders. Ouch!
The good news is that the offering could raise close to $150 million. This would make AOB's coffers flush with cash, considering that it already has over $90 million on its balance sheet. AOB has made numerous acquisitions in the past, and this financing could mean that a major acquisition is in the works for the company.
There's no way of knowing beforehand whether the assets AOB is considering are a good value or not. But its main method of boosting its top line has been via numerous acquisitions of formerly state-owned companies, so AOB can't be called inexperienced with buyouts. This strategy has helped the company grow its revenues 10 times over in the past six years, from less than $10 million in 2001 to over $110 million in 2006. AOB had operating cash flow of $29 million last year.
I'm generally very wary of China-based companies, especially ones doling out nutritional supplements and other, often pseudo-medicinal products. Nonetheless, AOB and other supplement manufacturers like NBTY (NYSE: NTY) have proven to be strong outperformers over the broader markets in recent years. How AOB chooses to deploy the cash that it generates from this offering will determine whether it can keep up this streak in the future.
So if you want , can check which could be the buyout target for AOB
==============
Another Buyout in the Works for AOB?
By Brian Lawler June 5, 2007
34
Recommendations
Whenever shares drop by nearly double-digit percentage points, something bad is usually amiss. Yesterday Chinese health-care nutritional supplement provider American Oriental Bioengineering (NYSE: AOB) suffered this fate after it announced that a large dilutive share offering was in the works.
AOB has 65 million shares outstanding, not including warrants. So the new equity offering of up to 15 million shares (not including the 2 million shares the founder and CEO is selling) represents up to 23% dilution to shareholders. Ouch!
The good news is that the offering could raise close to $150 million. This would make AOB's coffers flush with cash, considering that it already has over $90 million on its balance sheet. AOB has made numerous acquisitions in the past, and this financing could mean that a major acquisition is in the works for the company.
There's no way of knowing beforehand whether the assets AOB is considering are a good value or not. But its main method of boosting its top line has been via numerous acquisitions of formerly state-owned companies, so AOB can't be called inexperienced with buyouts. This strategy has helped the company grow its revenues 10 times over in the past six years, from less than $10 million in 2001 to over $110 million in 2006. AOB had operating cash flow of $29 million last year.
I'm generally very wary of China-based companies, especially ones doling out nutritional supplements and other, often pseudo-medicinal products. Nonetheless, AOB and other supplement manufacturers like NBTY (NYSE: NTY) have proven to be strong outperformers over the broader markets in recent years. How AOB chooses to deploy the cash that it generates from this offering will determine whether it can keep up this streak in the future.
Tuesday, June 5, 2007
As expected, today marked the first day of correction
We have pointed out in last week's quick review that the market will have a short correction less than a week. Today will be marked the first day of that if later on we review. And of course today as you have seen, mms shift their holding into those traditional tech area such as AMZN, GOOG,AAPL, BIDU, NTRI, CMI. Also small tech like RACK continues to rally. Try to remeber the way they did this time, and do the similar thing in the future:)
Also From IBD top 100, only 2 stocks out of 100 increase 2% with increasing volume. They are SPWR and SPAR. Look similar? hehe.We haven't see any sign of recoverance yet. Keep our eyes open and watch how GOOG and AAPL, AMZN can play in the next day.
Pls also check TRT at this time, its performance today signal a bottom at this support level.
Also From IBD top 100, only 2 stocks out of 100 increase 2% with increasing volume. They are SPWR and SPAR. Look similar? hehe.We haven't see any sign of recoverance yet. Keep our eyes open and watch how GOOG and AAPL, AMZN can play in the next day.
Pls also check TRT at this time, its performance today signal a bottom at this support level.
Monday, June 4, 2007
The stocks tend to bottom out today
The bottom out is defined as they pull up from their latest 20 weeks low, and getting close to their low position again. Normally if double bottom patter is formed, they could have a nice chance. This is the logistics behind this method.
Those stocks include
SIRF ALK BDN ACTG ORA OSTE SONO AVZA
For those traditional stocks today,
GOOG : extremely overbought and close lower than 508, its previous high.
FMCN : close to its resistence level, likely to breakout.
ICE: though raise about $7 today but volume tamp,RSI tamp,not sure what he can do.
AAPL: though I haven't sold it but already add the $120 stop to this guy. Volme tank, extremely overbought.
HMIN: typical bottom out.
AOB: got hammer today due to the new offerings.
MA: its time to come back .
====== Update notes =====
Carol will like to hold a conference call, hehe
Brisk kindly offer a forum for our discussion during strategy building. Shall we keep the discussion public? or underground?
Those stocks include
SIRF ALK BDN ACTG ORA OSTE SONO AVZA
For those traditional stocks today,
GOOG : extremely overbought and close lower than 508, its previous high.
FMCN : close to its resistence level, likely to breakout.
ICE: though raise about $7 today but volume tamp,RSI tamp,not sure what he can do.
AAPL: though I haven't sold it but already add the $120 stop to this guy. Volme tank, extremely overbought.
HMIN: typical bottom out.
AOB: got hammer today due to the new offerings.
MA: its time to come back .
====== Update notes =====
Carol will like to hold a conference call, hehe
Brisk kindly offer a forum for our discussion during strategy building. Shall we keep the discussion public? or underground?
Sunday, June 3, 2007
Strategy Section--Trace the Insider Buying Stocks(1)
1) Introduction
Before start to discuss about this, I would like to clarify that even I just explore this strategy which first knew from the book " Finding the next starbucks " and further proposed by bobobobo. The inputs from all of you are necessary and appreciated so that we can build a reasonable sound model for consistent performance. Can we do that? I think we can.
Trade based on insider buying has been existing for quite a while and has been used by peter lynch quite a lot ( described in his book << One up on the street >> ). The method won't be obsolete even it has been used widely for its fundamental reasons which can be summarized as below:
1)Insider behavior matters because research based on real-time signals has shown that a properly modeled picture of insider actions can provide the most accurate reflection of the prospects for the company, industry, economic sector, or even the stock market in general, going forward.
2) This makes perfect sense from an intuitive perspective. Corporate insiders possess all the necessary skills and characteristics that one could use to describe the "successful" investor. These include: A deep knowledge and understanding of the company and/or industry; A demonstrated ability to produce success; The training necessary to understand risk and to control it; The wherewithal (capital) to take advantage of opportunity when it presents itself and finally; A tendency to go against the crowd.
3) Further, insider buys are especially useful. Since insiders have exclusive information on the company performance, if they are risking their own money on the stock, usually they should have good reasons, especially when several insiders buy the stock at the same time.
Pls pay attention here, we only care about insider buying not selling with an assumption of a long position in the stock not a short one. The insider selling have different explanation sometimes that we will further elaborate in the future. But as an initiative, we wanna focus on a long position first, not to be distracted.
In order to fully explore the benefits of such strategy, we propose to investigate from several perspectives highly related to potential gain in a middle term, i.e. 6 months, with an expected return on investment about 30%. You may argue it could be a little bit high, but through our further research, the portfolio build from such strategy could yield at least more than the general market yield. The perspectives will be divided into 3 sections which are 1) Building the universe of active insider buying stocks, a methodology to find those companies that have intensive insider buying in the past 3 months or 6 months for different time frame. 2) Reducing the trading candidate, a process that we use fundamental research to filter out those candidates that having high probability to succeed. 3) Entry and Exist Analysis, a strategy that describes how we are going to trade into those stocks after step two. Step 3 is quite important for implementation. We could find if we invest at a wrong time, loss could be huge even the company is pretty good. For example, if we pay $1000 for GOOG now, would it be a good one?
Those three steps are complementary to each other which can't be separated to ensure that our goal can be achieved. Each step in the strategy needs to be investigate the potential pros and cons so that drawbacks in each step could be minimized.
NOTE: if you have any ideas and thinking in each step, pls email me at totalmerrill@hotmail.com or leave your msg here. Any ideas would receive fully attention during such strategy building process. You know a strategy can't be improved without different sources.
by the way, all of the articles related to this strategy would be published at Investshuttle.com, the site that I built to upload our pdf files. The introduction page can be downloaded now.
Before start to discuss about this, I would like to clarify that even I just explore this strategy which first knew from the book " Finding the next starbucks " and further proposed by bobobobo. The inputs from all of you are necessary and appreciated so that we can build a reasonable sound model for consistent performance. Can we do that? I think we can.
Trade based on insider buying has been existing for quite a while and has been used by peter lynch quite a lot ( described in his book << One up on the street >> ). The method won't be obsolete even it has been used widely for its fundamental reasons which can be summarized as below:
1)Insider behavior matters because research based on real-time signals has shown that a properly modeled picture of insider actions can provide the most accurate reflection of the prospects for the company, industry, economic sector, or even the stock market in general, going forward.
2) This makes perfect sense from an intuitive perspective. Corporate insiders possess all the necessary skills and characteristics that one could use to describe the "successful" investor. These include: A deep knowledge and understanding of the company and/or industry; A demonstrated ability to produce success; The training necessary to understand risk and to control it; The wherewithal (capital) to take advantage of opportunity when it presents itself and finally; A tendency to go against the crowd.
3) Further, insider buys are especially useful. Since insiders have exclusive information on the company performance, if they are risking their own money on the stock, usually they should have good reasons, especially when several insiders buy the stock at the same time.
Pls pay attention here, we only care about insider buying not selling with an assumption of a long position in the stock not a short one. The insider selling have different explanation sometimes that we will further elaborate in the future. But as an initiative, we wanna focus on a long position first, not to be distracted.
In order to fully explore the benefits of such strategy, we propose to investigate from several perspectives highly related to potential gain in a middle term, i.e. 6 months, with an expected return on investment about 30%. You may argue it could be a little bit high, but through our further research, the portfolio build from such strategy could yield at least more than the general market yield. The perspectives will be divided into 3 sections which are 1) Building the universe of active insider buying stocks, a methodology to find those companies that have intensive insider buying in the past 3 months or 6 months for different time frame. 2) Reducing the trading candidate, a process that we use fundamental research to filter out those candidates that having high probability to succeed. 3) Entry and Exist Analysis, a strategy that describes how we are going to trade into those stocks after step two. Step 3 is quite important for implementation. We could find if we invest at a wrong time, loss could be huge even the company is pretty good. For example, if we pay $1000 for GOOG now, would it be a good one?
Those three steps are complementary to each other which can't be separated to ensure that our goal can be achieved. Each step in the strategy needs to be investigate the potential pros and cons so that drawbacks in each step could be minimized.
NOTE: if you have any ideas and thinking in each step, pls email me at totalmerrill@hotmail.com or leave your msg here. Any ideas would receive fully attention during such strategy building process. You know a strategy can't be improved without different sources.
by the way, all of the articles related to this strategy would be published at Investshuttle.com, the site that I built to upload our pdf files. The introduction page can be downloaded now.
Subscribe to:
Posts (Atom)