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DJSP---look out below?

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October 12, 2010 – Comments (25) | RELATED TICKERS: DJSP

I bought djsp in real life at 2.95, because last time it dipped below 3 it had an intra day reversal big time. Well, I got screwed. I called the investor relations phoneline to ask how the foreclosure hault would effect them, no answer. Couldn't find anything on the site about it either

So I'm assuming that's why it dropped so much. Its always volatile but 17% is a lot. Deadcat bounce likely but I'm not sure how the company is effected. If anyone knows feel free to chime in

I'm not out just yet, wanna figure out more stuff

25 Comments – Post Your Own

#1) On October 12, 2010 at 8:44 PM, TMFBabo (100.00) wrote:

I think you should decide on that stuff before you buy. Seems to me like you were trying to catch a falling knife.  Bailing this quickly would mean you didn't consider the risk/reward properly before your purchase.  

I bought a small position today at $2.50 because I like the risk/reward at that price.  I don't care if it goes down to $0.75; I'm going to hold it for a while (at least 6 months) and let it play out.  

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#2) On October 12, 2010 at 10:44 PM, Valyooo (99.40) wrote:

Wasn't really trying to catch a falling knife. I liked the company all along, anything below 3 dollars was where I wanted to buy it.  But then when all this stuff surfaces about them going to not come out of this mortgage thing alive, and the stock falls 17% for a good reason, it scares me.  When it was free falling due to lowered guidance, that didn't bother me at all.

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#3) On October 12, 2010 at 10:44 PM, Valyooo (99.40) wrote:

And if it falls to 75 cents and stays there for years are you gonna hold forever?

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#4) On October 12, 2010 at 11:07 PM, Momentum21 (87.88) wrote:

I looked at this one a little harder today since I have been tracking it for awhile.

Can't say that I completely get it yet but on the surface DJSP seems to be the equivalent of a "GOM player" after Macondo...but instead of just a moratorium on drilling it would be like having a moratorium on the world using oil (foreclosure activity) for an undisclosed period.

Believe me, I love this type of thing, but having a magnifying glass on this whole "segment" right now does not seem like a good thing for these guys at all.

They are no BP...or ATPG...

I am just playing devil's advocate here Valyooo...our leader carries more clout than I for sure...and I only spent about 30 minutes looking around at superficial stuff. Count me in closer to .75 though... : )  

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#5) On October 12, 2010 at 11:23 PM, Valyooo (99.40) wrote:

1) Babo, I re-read my #3 post.  It was a serious question, but it seems like I came off being a jackass.  Sorry, I am not sarcastic, it is just hard to realize on the internet sometimes.

2) Momentum, yeah I am with you.  The difference is that the P/E is less than 1, which is insane.  But still, point taken.

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#6) On October 12, 2010 at 11:38 PM, TMFBabo (100.00) wrote:

I didn't take any offense.  I saw this as a triple-or-nothing sort of deal.  I may have gotten in massively early and it may continue to freefall, but no big deal.  I wouldn't really advise people following this sort of play, since it carries a high level of speculation with it.

I'm going to let this one play out.  If it goes to 75 cents and stays 2 years, I'll bail and I will have been wrong.  However, I think I'll be right more often than wrong and my expected value per pick is pretty decent.  

I've been wrong plenty of times before and have taken 50% losses, but I've also had doubles and triples with the same exact types of plays.  I never know which ones will lose half and which ones will double or triple, but those are bets I'll make every time with reasonably small amounts of money.

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#7) On October 13, 2010 at 12:01 AM, Valyooo (99.40) wrote:

I wrote up a whole response to you....not sure where it went. 

 

Anyway, I guess you are right, do it often enough with a little bit of money and eventually the winners will outweigh the losers.

Did you do a lot of DD on these guys?

Where in PA did you say you live?

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#8) On October 13, 2010 at 12:46 AM, TMFBabo (100.00) wrote:

I currently live in Maryland., but I grew up North of Philly in the suburbs.  If you take Broad St. north and keep going, you'll hit Cheltenham Ave eventually. Once you cross that street, you've hit my school district.

I read somewhere you go to Temple.  I know most of the people in my HS went to Temple, Drexel, and Penn State.  Are you from PA as well?

Anyway, back to the main subject.  You have to choose your spots.  Another one I chose that I like more is Cano Petroleum (CFW).  It's a bit hard to get used to the idea of triple-or-nothing, but you will make money if you take every triple-or-nothing play you receive (in equal amounts without going crazy with any one play).

I like plays like Compton Petroleum a lot more, where it's multiple-bags-or-nothing, with the chance of "nothing" being well under 50%.  Since I already have enough of my cash tied up in that stock, it would be unwise to put in anymore.  

I have to say I picked DJSP without much research, unlike my dry bulk plays which people must be sick of hearing about.

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#9) On October 13, 2010 at 1:00 AM, TMFUltraLong (99.95) wrote:

You and those dry bulk plays....I mean who would listen to an accuracy of 91.5% anyways.... =)

As for the relevant issue, DJSP got canned because a few stop losses got taken out and a few people squawked on a moratorium on foreclosures. A temporary blip for DJSP, still looks like a great company.

UltraLong

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#10) On October 13, 2010 at 1:46 AM, TMFBabo (100.00) wrote:

@UltraLong: Well, I really just think GNK is mispriced as far as dry bulk goes.  I'm somewhat bearish on dry bulk shippers overall.  I continue to research them because I like the benefits of following the iron ore and coal trade and I like to be at least a little knowledgeable in a certain sector.

@Valyooo: I'd listen to UltraLong's words on DJSP more than mine.  He's the one that made me look at it in the first place a few months back.

If DJSP comes out of the lawsuits and the big banks start the foreclosure processes again later on, you will be thankful you got this buying opportunity now. I think there was insider buying at the $5 or $6 level, so we're getting half what that guy got.

I keep talking about the triple-or-nothing type of play, but this has a lot less chance of "nothing" than 50%, which makes this a pretty attractive play in my eyes.  

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#11) On October 13, 2010 at 2:15 AM, Valyooo (99.40) wrote:

Yeah, I got compton petroleum too.

My portfolio is currently DJSP, CMZPF, some RIG and BRF calls, HEAT, VSTO (and the warrants)

 

I only have around $3100 to invest, and a lot of that money might have to be withdrawn next year to buy a house, but rest assured when I get a career, I will be buying some bonds, a lot of blue chips, being in more cash, being in more indexes, and shorting leveraged etfs.  I will take on less risk then.

 

I go to Temple, but I am from Brooklyn.

 

Ultralong...what makes you so positive this is a temporary blip?  Doesnt this put their entire business on halt indefinitely?

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#12) On October 13, 2010 at 2:21 AM, TMFUltraLong (99.95) wrote:

Despite the unending stupidity of the US government in understanding what makes an economy tick.... they can't possibly be dumb enough to put a moratorium on foreclosures. Can they????

UltraLong

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#13) On October 13, 2010 at 2:56 AM, Valyooo (99.40) wrote:

Yeah that's exactly what I thought.  You never know with socialists though...

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#14) On October 13, 2010 at 3:15 AM, Aventador (< 20) wrote:

What’s coming out now about the robo-signers in particular is the fact that just about all of the major loss mitigation initiatives, including the federal efforts by the Treasury with the [Home Affordable Modification Program], all rely completely on these same people, the mortgage servicers.

To me what the robo-signer issue shows clearly is that the industry is on this path to foreclose as many cases as they can, as quickly as possible with as little work as possible.

Perhaps a mixed economy slightly more dependent on socialism would actually be beneficial to the United States. But then what's the world without differences of opinion.

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#15) On October 14, 2010 at 2:31 PM, Momentum21 (87.88) wrote:

OK fellas, my magic number hit...

In at 1.99...not quite .75 but close enough! : )

DJSP is at 1.92 as we speak...yikes! 

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#16) On October 14, 2010 at 6:00 PM, Shedded (< 20) wrote:

Never posted on Fool before but DJSP is a hot topic for me right now.  Been a holder since Spring averaging down to come to hold 29k at average cost of $4.20.  Capitulated today and sold.  The issue here has been threefold:

1) Guidance taken away - I can live with that

2) Foreclosures halted - I can live with that as well as they have to start again sometime

3) DJSP under Florida AG Investigation - Here's the issue I can't get over.  DJSP is a victim of his own success.  Due to their significant volume they have become the poster child for an industry with a bad stigma.  Under deposition a former employee has said they forged docs to expedite foreclosure.  Probably sour grapes on their part but as a result Citi announced they have stopped sending work to DJSP.

Where I got to was, because of bad press and political influence, is there a chance the rest of their customers move business away from DJSP?  If so, does this go to zero? Couldn't stand the stress.

Be interested to hear from others whether they think it could go to zero.  If all of the clients like Citi say they aren't coming back until the AG investigation is over (guilty until proven innocent) I don't know what happens.

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#17) On October 14, 2010 at 9:22 PM, PainterPoker (21.72) wrote:

Bought in myself at 2.50.  I know I want to sell and probably will tomorrow, which is good news to everyone else who is holding, because the stock will then rebound over 30%!

  

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#18) On October 14, 2010 at 10:52 PM, Momentum21 (87.88) wrote:

Shedded (< 20) - DJSP is making a beeline for zero...but the bet is that if they survive they will be a multi bagger from here.  No one knows how this foreclosure mess will turn out but I am playing the pot odds at the 1.99 level. It is a 2% position for me...so big enough to sting badly but the upside is worth it.

Bear case: they become scapegoat and get pulled under...forget losing customers, they just file to avoid endless litigation.  

Bull case: foreclosure matter needs to be settled now and these guys still represented banks like Citi who will be further implicated if they become a scapegoat. 

I obviously favor the bull case...by much more than a coin toss.

Sounds like you did the right thing given your circumstances. That's a lot of money riding on a group that is definitely not too big too fail...if your story is true. 

Your random post leads me to believe that you are actually short DJSP. When the BP mess was unfolding we had a bunch of random posters come through talking a big short case.

I would NOT want to be a short here with real money. That's all I know for sure...David Stern has a pretty solid demand for his services these days. 

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#19) On October 15, 2010 at 5:19 AM, TMFBabo (100.00) wrote:

I added to my position at $1.87 and also have 2% of my money in DJSP as well at an average basis of $2.14.  I'm with Momentum21 in that it's multiple bags if it simply does not go bankrupt. 

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#20) On October 15, 2010 at 10:17 AM, Momentum21 (87.88) wrote:

added at 1.56...

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#21) On October 15, 2010 at 9:30 PM, Robuh (24.32) wrote:

Time to do my DD on this one. You guys are like drug pushers.

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#22) On October 16, 2010 at 3:07 PM, Valyooo (99.40) wrote:

I sold at 2.26, might buy back at 1 dollar

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#23) On October 16, 2010 at 3:15 PM, TMFBabo (100.00) wrote:

@Valyooo: Not a bad move if you found new information that changed your original investment hypothesis, making the investment a "sell" instead of "buy more." 

I'm going to hold onto my shares at my cost basis of $2.14 and see what happens.  As tempting as it would be to buy more if it drops below $1, I don't have any such plans.  My investment hypothesis of multiple-bags-or-bust stands.

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#24) On October 16, 2010 at 4:32 PM, Valyooo (99.40) wrote:

The reason I sold at $2.26 was because 1) when this stock sells off hard, it keeps selling off hard 2) i could not get a hold of anybody when i called the number for investors, which made me really distrust them.

I doubt I will buy back around $1, but if it hits a floor somewhere around then, and the news isnt all over the place anymore then I might buy some.

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#25) On October 26, 2010 at 3:04 PM, wecan (30.60) wrote:

Anyone buy any share today?  300 people laid off? 

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