Articles Written by Jason Coleman
My cousin Candice, who just moved to Toronto, ran in the Canadian Breast Cancer Foundation CIBC Race for the Cure last week. InvestorGeeks donated $300 on her behalf, and Candice was able to raise $525 total to help fund breast cancer research and awareness programs.
Since last Fall, InvestorGeeks has been donating 100% of after-expense profits to charity. So far we’ve contributed $700 total to a couple of great causes and have some good stuff lined up for the end of the year. I think I’ll start keeping track of the donations in the sidebar somewhere. Look for that soon.
If you like what you read here, and want to support InvestorGeeks, I think you can still donate to the CBCF on Candice’s behalf through this link. Show your support.
While you wait for the rest of my Google analysis (it may be a while), you can read this article over at Forbes that closely matches my own thinking.
Google Still Cheap Atop Tech Heap by Georges Yared.
Peace out, Investor Geeks.
Tuesday, Oct. 2, 2007
by Jason
WallStrip is touring the Google campus today. I just opened a position in GOOG a few days ago and have some more money slated to invest in it if the price drops from here or breaks up from here (and forces a MA crossover). Christian asks why I feel the need to invest in GOOG. The simple answer is that I think the price is going to go up… a lot.
People are scared off by the $500 price tag, but GOOG is actually a value play by my calculations. Let’s try this. E*Trade has GOOG’s 2006 EPS at $10.58. So what would GOOG’s EPS growth rate and average PE need to be to warrant a sticker price of $515? The answer is a 20% growth rate and average PE of 30. Here’s the math:
I’m in a funk. You ever get to that place where you want to reverse every one of your trade ideas? I’m there now.
I sell GRMN at $81 and it goes to $103. I buy BBBY for some reason at $36 and it goes low. Then I watch it bounce, set a stop loss that gets hit at $34.74, and watch it have a nice up day today. I sell EBAY in a whipsaw too, and now it’s jumping up like I thought it was going to two week ago.
I think the main mistake here is I’m being conservative, trying to avoid losses. GRMN looks like it’s dropping, sell… EBAY is dropping, sell. The other part of it is that I was nearly fully invested when the stocks started tumbling a couple weeks ago. So “reinforcing” my position was a trick out of my disposal. (That’s my own fault.) I aslo was pretty frustrated for getting in BBBY early and just wanted to get some distance from that trade.
So what do you guys do when you make big costly blunders like this?
So the other day, the big sell off started. And it’s arguable that it’s just beginning. Spurred on by Phil’s post, I considered selling out of everything.
It made sense: I thought everything was going down, so I should sell.
But it also didn’t make sense. One thing I’ve pointed out before is my struggles with trading/investing using so many different strategies. It’s easy to mix them up. That’s why when I make an entry, I need to know what my exit is… and stick to it.
The clearest no-no, which I avoided…
Maybe it’s all the green on the screen so far… but already after looking through things a bit more, I a am less bleak than I was earlier. I had commented on Philip John’s last post that after yesterday’s sell-off, I was ready to sell into today’s bounce to move to about 75% cash from 10% cash.
I’ve decided to make no move today. Today is likely to be a nice up-recovery day. I need some time to think things through before selling long-term mutual fund and index positions. And I’m likely to do more damage selling early today than holding too long. Tomorrow would be a different story. We’ll see.
Part of my motivation to sell off so much is that I’m on vacation right now and would like to not have to worry about the market during this volatile time. (Day-traders are on to something with their owning no positions after hours.)
I’m also being very loss averse as after selling my GRMN at $81 (which it has bounced back above after a few shaking trading sessions) I’ve gone ahead an lost about $150 so far on two investments in Amgen (AMGN) and Bed Bath and Beyond (BBBY). I had had those stocks on my list as good value-TA plays that were counter-cyclical to GRMN.
Some New Positions - What am I getting Into To?
AMGN still looks good…
Bill (CEO of WineLog) did a quick little post on Wine Investing over at the WineLog blog and introduced me to a site called WineInvestor.com.
A good site to learn about wine investing is wineinvestor.com. Wine Investor is collecting (in one place) all the types of information I would need to explore investing in wine. The guy that runs Wine Investor is from the financial services field, works with technology, and loves wine. What a killer resume.
Investing in wine could be a great way to diversify your portfolio. Especially if, like me, you already have a passion for wine. WineInvestor calls it an alternative investment, specifically a “collectible”, and suggests about 5% allocation in collectibles in this article on asset allocation and diversification. (Let’s see, that means I need to go shopping for about $1500 in wine. Nice!)
Here are some other great articles from WineInvestor. New posts are added about once a week or so.
Friday, Jul. 6, 2007
by Jason
I’m writing this one directly into the blog, and with any hope it will go up before market open today. Let’s what we have on dee plate.
AMGN
Notes from late last week: “Stoch sell. MACD still strong. I think this guy is recharging.”
I’ve since changed my theory from “recharging” to “dropping”. It’s looking bleak for this guy short term. 30DMA is providing resistance and Stoch and MACD are signaling sell. Lots and lots of support at $52. And although it’s well below my MOS of $65, I sold my 60 share stake last Friday at $55.62. There’s a lesson there on trusting your instincts while selling, as I could have sold it at $60 and kept $22 more, but that’s another story.
I have a bit of sellers remorse though. This really was a value play. I sold it in my trading acount, which means full tax on the $5 I made, not to mention E*Trade’s high fees. And I’m reminded of a bad sell I made on YHOO last summer where I avoided a $1 loss that was coming, but then missed the $6 run up. That could be happening here.
In any case, I thought it would be good to have some cash on hand going into this little bear run so I dropped this one too. Though my gut tells me I should possibly be selling this next stock to lock in some real profit.
GRMN (I own 75 shares)
Notes from late last week: “Can anything stop these guys? My higher sticker price was around $75, so I’m looking for any reason to sell. I want to let it run, but I’ve “made my year” on this one stock already. I’d like to ensure that I don’t give it all back. Need to figure out a good stop placement: $69.90?”
I’m glad I didn’t set that stop because I would have been stopped out and the stock has gone up since. But I haven’t made nothing until I sell right? But then what am I going to do after I sell? Put it back into GRMN? I need a better alternative, and I’m just going to watch this carefully for a more pessimistic sign. The thing is flying high right now.
AMD
Looking strong here. MACD and Stoch have thrown buys. The price is above the 30DMA, but I’d like to see a full bar there. I have some cash on hand, maybe this is where it should go. Seems like the news about AMD outsourcing fabrication went over well. Was it enough to turn the stock around? I’d be looking for the stock to reclaim the 200DMA at around $17.50, but there’s a lot of resistance on the way up. Plenty of support at $13.
ERTS
I second guessed myself, when ERTS went above my selling price of $49 last week. But it seems that was on the back of a stronger market, and the price is south again. This is a troubled stock (at least short term) that I don’t need the headache for. The 30DMA seems to be giving a lot of resistance. This one is going on the back burner until I gain my confidence back in EA. Technically, I’d like to see a full bar above the 30DMA and the 10DMA cross above the 50DMA before jumping back in.
EBAY
30DMA is showing resistance, but this stock is also in a nice little up channel. A break of the 30DMA could be very bullish. Look for more resistance at $34, support at $31.40. I think could see a large run here like we had with Amazon earlier. eBay is another tech business that Wall Street (and Main Street) doesn’t understand. Why did they buy Skype? Why did they buy this or that? What are they doing? Is the toning down of Google advertising going to hurt them or a good sign of their strength? I might buy some of this now and hope they can break $35 this time. Going to do some MOS calculations to check my risk here. Read here for Phil Town’s eBay analysis from last year (when the stock was at about the same price). My numbers are a bit more conservative, but they are still saying buy buy buy.
Current Earnings: $1.05
EPS Growth: 22%
Average PE: 44
EPS in 10 Years: $7.67
Future Value: $337.47
Sticker Price: $84.37
MOS 50%: $42.18
I’m going to be looking to buy this fella today. I’ll let y’all know how it goes.
QQQQ (I own 90 shares)
Staying the course. One of the major indexes above its 30DMA. I think we see a bounce here or after one more bad day. Holding this to keep pace with market.
ACN
My notes from late last week: “3 Buys. Looking good. $40.45 entry o short-term pullback. Need to do a MOS calculation.” And the stock is doing great. Still need to do that MOS, so here it is:
Current Earnings: $1.61
EPS Growth: 17%
Average PE: 20
EPS in 10 Years: $7.74
Future Value: $154.78
Sticker Price: $38.69
MOS 50%: $19.35
ACN is a great company and great stock, but it’s trading at around or just a little above sticker price (according to my off-the-cuff here). So I can’t invest now. My Average PE is a little low, so I might look into it more to double check. A PE of 34 (twice my EPS growth estimate, but higher than the historical average) gives us a sticker price of $65.78… which would be more room to grow.
Tuesday, Jun. 26, 2007
by Jason
Below are my notes from yesterday, which I wrote before the open. I realize that I should be a bit quicker about putting these online because (1) they are sometimes timely and people might find them useful and (2) if I make a great prediction it will be easier to believe if I posted my notes before that prediction came true. Still, maybe I don’t want people trading on this advice (be warned!).
I don’t know exactly why I’m doing this. I just feel I have already written the notes, might as well throw them online. At the same time, I’m hoping to get a few “what the hell are you doing” comments that could help me avert disaster. Like, where were you guys when I invested in ERTS?
AMGN:
Found support on the 10DMA. Looking good.30DMA Crossing under the 50DMA will mean those levels will be super resistant. Would like to break through them this week. Otherwise it’s back to $55 territory to reload. I’m guess a bit of lateral movement for the next few days until a break out. This is a value play though. So we’re stilling in.
GRMN:
Nice day Friday. Bullish engulfing? Fake bounce of the fast stochastics. MACD is scaring. Time to sell into strength? I’m already up good with this one. Trailing stop?
(Here are the time when I forget what I’m doing. Am I trading? Am I investing over a longer time frame. This stock is held in my IRA. While that means I won’t pay tax on the earnings (so trade it), it also means the gains are for the long term so I can afford to use a more conservative trading approach.)
(After hours note: We did really good with this one today. Another big up day. Looking at the 5 year chart, I see no resistance and a lot of room to move. So I want to give it some space. But I will have a trigger finger on the sell button. My MOS calculations put the sticker price on this one between $71 and $84 -need to update- so I’ll definitely be looking to sell there.)
AMD:
What a confused stock. Still scary. A $15-$18 play would be nice. Too bad it will probably make that jump in one day, and so one would have to be way more observant and prepared than I too make that trade.
ERTS:
I’m torn on this stock too. Technicals and news are weak, but I have an 50% MOS at $43, so a bit of support. Maybe my calculatons are bad. I need a close above 30DMA today. Should consider a stop loss. I’m going to watch the daily and try to sell this today.
(After Hours Note: I sold my stake in ERTS, or 50 shares, at $49.00 yesterday. Not too bad. I still think there is a lot of growth potential in the videogames market, and EA is the biggest player. But the Earnest Adams article -saying EA is no longer a growth company-, EA’s misstep with the Wii, and some other negative bits are playing out harder than I originally thought. I’m torn though, because a bunch of negative analysts only leads to upgrades -or bankruptcy, which I don’t see here-. But I shouldn’t be torn. I should be absolutely 100% convinced… or close to. So I’m going to find a different videogames play or wait for a better entry on this one.)
EBAY:
Big bullish engulf Friday. Hit resistance at 200DMA though. Wait for some + MA crossovers.
QQQQ:
Looks like it’s bouncing. Watch that MACD. A close below the 30DMA is bearish.I’m calling a whipsaw.
(After Hours Note: Bounced off the 30DMA. However, we’re looking at a -0.16 open according to E*Trade. Ditto yesterday’s note. I want to see a powerful up day today to regain the trend.)
Full disclosure: I own 60 shares of AMGN, 90 shares of QQQQ, 75 shares of GRMN, and some other IRA money in various index and mutual funds. Use these notes at your own risk.
Tuesday, Jun. 12, 2007
by Jason
I thought I would share my watch list notes again. Here’s what I wrote out this morning before the market opened. It was a really tough day out there, so I’m going to have to re-evaluate a bunch tomorrow. Hopefully this is helpful to you guys.
AMGN
No sell signals. Test of 30DMA coming up. Let’s bust through it. Support rising at $55.
SOOOO much support in the $50-$55 range. Could trade sideways until the 30DMA catches down. Looks like some great risk-reward over 1-2years though. Stoch buy, RSI buy, MACD almost a buy. Need to read the news on this giant. Positive article in BusinessWeek recently.
GRMN
Looks like a pull back to at least the 10DMA ($61.50) is likely. Maybe pull back to the 30DMA ($58). But it doesn’t matter. Trend is up, and we’re in this for the long haul. Sell on stoch. No sell on MACD yet. RSI could bounce buy. Phil Town likes this stock, so I’m going to trade it like he would (or like I would imagining I’m him… minus the rafting and babes).
(note: GRMN did well today. The stock has lately been a poster child for “relative strength”: stays flat or small gains on down days, jumps up big on up days.)
AMD
This stocks still a mess right now. Better opportunities out there.
ERTS
Turnaround is looking good. A nice close above the 30DMA would be very nice and bullish.
Uh oh. Earnest Adams (well-respected old-time game developer and former EA employee) is diversifying his stock away from ERTS. Interesting read at Gamasutra. Bottom line is that EA is a big company now and better be prepared for changes in the distribution channel.
(note: And yet ERTS was one of the few stocks up today. Maybe the TA was too strong. I need to recalculate my MOS on this stock and make sure the downside isn’t too great for this stock.)
EBAY
Nothing to report. Not checking in on this lately.
QQQQ
Hammer pattern yesterday. Can’t tell if it’s hammer or hanging man; the top is equal to yesterday’s close. (technically a little lower) Handle bounces nicely off of 10DMA.No sell on stoch or MACD. I’m looking for some nice action today.
ACN
Looking nice. Why did I stop following this stock?
Full Disclosure: I currently own 60 shares of AMGN, 90 shares of QQQQ, 50 shares of ERTS, and 75 shares of GRMN across various accounts. I’m a hack. Folks should do their own research before investing based on this information. Good luck.
How bad will things be tomorrow? I’m about fully invested right now… or at least all of my liquid cash. I have some cash waiting in an E*Trade savings account for tax time next year and another chunk of cash that I’m trying to figure out what to do with, but nothing that I could invest within 5 business days.
After tomorrow morning, I may come back and write about what I might sell and when, what my targets are, and how I can make sure I don’t lose all of my recent gains (up almost 10% in Q2).
Thursday, Jun. 7, 2007
by Jason
