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January 2012



Revisiting a Recent Observation

January 18, 2012 – Comments (6) | RELATED TICKERS: SHLD

Recently, I detailed the bounce shares that have been hammered precipitously by 60% or more often see in a relief rally. I posited that this price action is the result of shorts getting carried away and overcrowding a trade. They then scramble and cover when the stock finds support.   [more]



Bears Gone Wild!

January 14, 2012 – Comments (5) | RELATED TICKERS: NFLX , GMCR.DL , SHLD

Once in a while it appears that the shorts are dead right. There is a disaster, an FDA failure, a bad business decision, accounting questions, or slumping sales. The short interest skyrockets and the stock falls off a cliff. However, sometimes the negativity can go too far. Such was the case with BP and ARNA back in 2010. More recently, Netflix, Green Mountain, and Sears have been under the gun. Maybe their business models are broken. Maybe they deserved to sell off between 64-84%. But chances are they will rally at some point. Maybe not as hard as they fell, but at some level the shorts will cover at the sign of good news. In other cases if the business is broken, the pop is short lived and the stock may never recover. When there is blood in the streets it is hard to pick a turnaround. Of NFLX, GMCR, and SHLD I like NFLX's chances long term. That doesn't mean that GMCR and SHLD can't rally even more in the short term. Sometimes the Bears can overdo it too.  [more]



Market Timing - January Tug of War Edition

January 05, 2012 – Comments (4) | RELATED TICKERS: EXK , SLV , GPL

I will use this blog entry as a holding place for my tax-deferred market timing trades for January. I sold out of my large cap value fund on Tuesday 1/3 and captured a nice 1.6% bump. Markets were flat yesterday and today so I haven't really captured any notable performance gains or lost anything against the broader indexes.  [more]



Market Timing - Happy New Year Edition

January 03, 2012 – Comments (0) | RELATED TICKERS: WPRT , V , BDX

Happy New Year everyone!   [more]

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