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Rushing Down to Beanie Land

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8

November 15, 2012 – Comments (14) | RELATED TICKERS: SAN , BBVA , LYG

My CAPS score has fallen over 80% in the past 6 weeks and at the rate I am falling, I should get my Beanie before the end of the month.

Since I am, for the most part, a small cap investor, I have been hit especially hard by "skittish" traders, in stocks that are easily moved by relatively small numbers of shares.

While I have been taking some advantage of these drops by adding to some of my positions, I have decided that for now, I probably need to just sit back and watch.

Looking at the graph of my score, it looks like I have already "fallen over the fiscal cliff", so will just spread my arms and try to coast for awhile.:)

While some of the companies I have invested in are "semi-speculative", most are not, and if we manage not to go into a full blown depression, I should do fine in the longer term, or maybe I am just whistling in the dark:)

Even profitable companies are being beaten down like they are bankrupt, so maybe we will see 2009 again, so the key is not to "panic sell", and self inflict a fatal wound, like many did then.

Good luck to all of you in your real life picks, and hope to see you later on the "upside".

14 Comments – Post Your Own

#1) On November 15, 2012 at 1:47 PM, ElCid16 (96.80) wrote:

Even profitable companies are being beaten down like they are bankrupt

Care to name a few?  :)

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#2) On November 15, 2012 at 4:38 PM, Mega (99.97) wrote:

While some of the companies I have invested in are "semi-speculative", most are not, and if we manage not to go into a full blown depression, I should do fine in the longer term, or maybe I am just whistling in the dark:)

I don't think this is accurate, I would say your portfolio is extremely speculative.

18 of your 34 companies have been unprofitable over the past year. Many of them are not only financially risky but also in terms of technology and business model.

Of the 16 companies that are profitable, half are banks and the other half are transport and industrial. Highly leveraged and cyclical industries.

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#3) On November 15, 2012 at 8:18 PM, Teacherman1 (26.53) wrote:

ElCid

CY, PWER, FTEK, MTOR, HBAN, DCIX, FLOW, . I haven't taken the time to go back and do the indepth analysis that MegaShort did, so this is off the top of my head.

Oh, I think APPL might be one too.:)

As usual, JMO and worth exactly what I am charging for it.

MegaShort

I can't tell if my portfolio is extremely speculative, so I went to look at yours, but all I could find were one star red thumbs.

I don't really care about my CAPS score, but if I did, I could easily follow your example and red thumb a bunch of one star stocks, and close them out as soon as they scored points, and use this method of running my score way up.

I prefer to invest instead, and while it is true that over the short term many of my picks are not yet profitable, I am in for the longer term and have great confidence that the "worm will turn".

That is why I make real money picks and not CAPS score building picks.

Have a great day.

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#4) On November 15, 2012 at 8:19 PM, Teacherman1 (26.53) wrote:

My apologies MegaShort. I am having a bad week.:)

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#5) On November 15, 2012 at 8:32 PM, Speculatormaster (< 20) wrote:

I think you will be, ok as soon as you are no using leverage, just use cash, because leverage is only for the good times and to burn the short sellers when the up start to trigger. Don't panic, just study the fundamentals, and the technicals and use cash and wait, patience = to success in the long term. :)

 (Cash is king)

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#6) On November 15, 2012 at 9:30 PM, Teacherman1 (26.53) wrote:

Speculatormaster

Thank you for your words of encouragement.

I am not leveraged, actually own most at much  lower prices than shown, and am more than willing to wait until this "fiscal cliff panic" is over.

Was just fed up with brokers lending my stocks out for a fee, so that shorts could drive the price down in the short term.

I am comfortable with the stocks I own, and the companies they represent, and did not pick them by throwing darts at a board.

My frustration over what is happening in the market is compounded by events happening in my personal life due to wifes health problems.

Sorry to vent in my blog.

Good luck to all real investors.

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#7) On November 16, 2012 at 10:17 AM, TSIF (99.96) wrote:

Hi Teacherman1, I understand your frustration. I agree the smaller cap stocks are generally more volitile during down times. They use to recover faster during uptimes, but what this ends up meaning in the long run is that 'generally', right or wrong they are considered more speculative by investors and they have less institutional support due to rules/design of mutual funds. They also attract hedge funds and large private investors who will NOT hesitate to dump at any cost.

I know you were frustrated and already apologized to Megashort.  I've always admired your consistancy, transparency, and willingness to share your ideas/thoughts as you work to improve your thesis.

For others who might be following, however, I'd like to note that being able to successfully downthumb companies that are outside of thier bounds is just as valuable, (in my opinion), as upthumbing companies. Understanding valuation to the level of knowing when something is pushing it's real value is a valuable tool and can be used on the positive side as well. We know the market, despite past attempts to label it as such, is not "efficient".  Shorts play a role and if the market proves them wrong it will make them pay. Shorts get more fame/blame for moving stocks than they really deserve.  The MM's, hedge funds, daytraders, computer traders, and sentiment have clout, but again, just my opinion.  We all have different metrics and different timeframes. I borrow from and value both you and Megashort for sharing. Sharing on CAPS is lost art.

Diversity is the way to go.  I try to watch sentiment and selling a position I've held a long time is difficult for me as well, but sometimes it's the best option. It all depends on timeframe. After three years of this I'm more inclined to protect what I have, which sometimes means "missing out" or going for more trades than long term investments.

My thoughts and prayers to you and your wife during these times. 

TSIF

 

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#8) On November 16, 2012 at 11:49 AM, Mega (99.97) wrote:

No apology necessary, Teacherman.

I appreciate your contributions to CAPS as well. I did not claim any of your investments are "bad" since you are surely more knowledgeable about your investments than I am. I just have a different perception of the overall expected volatility and the factors that usually affect risk/volatility.

Good luck on your investments and even more importantly with your wife.

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#9) On November 16, 2012 at 12:14 PM, ElCid16 (96.80) wrote:

I guess I don't view 10, 20, or 30% corrections as being "beaten down like they are bankrupt."  

But man - PWER looks silly cheap.  $287MM in Cash/Short-Term Investments, no debt, and a $466MM market cap?  [Current Assets - Total Liabilities] is like $400MM.  Revenue and profits look strong.  I think I might need to do a little more research on AC/DC Conversion...  :)

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#10) On November 16, 2012 at 12:38 PM, Mega (99.97) wrote:

As far as my own portfolio, I am short quite a few of my red thumbs, indicated by check marks. Each short is a very small position, less than 1.5% of my portfolio.

My long positions are in order: Apple, Genworth, Intel, Symetra, Berkshire Hathaway, Corning, Teva, Jardine Matheson, Citigroup, Ford, Darling and EMC.

And to correct myself, when I said, 
"I did not claim any of your investments are "bad""
My initial comment did come off as overly negative, but my intent was to offer "constructive" criticism by challenging your assumptions.

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#11) On November 16, 2012 at 8:33 PM, HarryCaraysGhost (99.60) wrote:

As far as my own portfolio, I am short quite a few of my red thumbs, indicated by check marks. Each short is a very small position, less than 1.5% of my portfolio.

Mega, just to clarify do you place the green checkmark (why did Caps change that from a dollar sign) when you start a short posistion?

An example would be ULTI started at $34.94 now sits at $87.88 (for the love of all creatures great and small cover already:)...

 Hi Teacherman,

We've all had our moments of doubt and pain (woo,woo...woo,woo... Stones referance)

I tend to go back to what Benjamin Graham said many moons ago, Mr Market is like your schizophrenic next door neighbor. So I'm having trouble trying to find a point in time that the markets were rational. It's just done in milliseconds now.

All the best to you and your wife.

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#12) On November 16, 2012 at 8:44 PM, HarryCaraysGhost (99.60) wrote:

" target="_self">http://www.youtube.com/embed/ZRXGsPBUV5g" frameborder="0" allowfullscreen>

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#13) On November 17, 2012 at 7:59 PM, Mega (99.97) wrote:

"Mega, just to clarify do you place the green checkmark (why did Caps change that from a dollar sign) when you start a short posistion?"

No, I usually red thumb a company quite a while before shorting it and putting the checkmark on it. OTC stocks are sometimes the exception where I move more quickly.

I shorted ULTI at $66 and it's very small.

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#14) On April 22, 2013 at 12:43 PM, ElCid16 (96.80) wrote:

Maybe I should start taking my own advice.  :)

 

On November 16, 2012 at 12:14 PM, ElCid16 (84.47) wrote:

 

I guess I don't view 10, 20, or 30% corrections as being "beaten down like they are bankrupt."  

But man - PWER looks silly cheap.  $287MM in Cash/Short-Term Investments, no debt, and a $466MM market cap?  [Current Assets - Total Liabilities] is like $400MM.  Revenue and profits look strong.  I think I might need to do a little more research on AC/DC Conversion...  :)

 

 

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