Stock Market for Amateurs

You might have read here, that I bought Tenaris (TS) on May 5th, at $69.
Today, TS has reached $138.
Now, if you follow rational or growth investing techniques, you might want to take some money off the table - reduce your total holding back to its value about 50%-60% ago.

But, if you’re following Nicolas Darvas’ strategy, you might want to buy MORE of this stock just about now.

My gut feeling tells me that I need to buy more of this stock - but - I have no funds left - I am all in-the market.

Tags: stock market, portfolio , TS

SFCC downgraded today by analyst Robert W. Baird from outperform to neutral. Stock weakened 4% on early trading today, but still above breakout price. As always, I am going to keep my position unless it dives below 7%. This “feel the water” buy might prove a false breakout. Or maybe not?

Tags: stock market, portfolio , SFCC

For those of you who have read previous post about BAIDU,  might remember I said it is a “Very risky, gamble like position” because there's not enough accessible information (technical or fundamental).
Well, apparently – when there’s not enough information – people tend to listen to analysts.

Baidu has soared 36% in the previous three trading days, following a Morgan Stanley coverage of the stock. The night before last, Goldman Sachs and Piper Jaffray started coverage of BAIDU with “underperform” – the stock plummeted a wowing 28% yesterday, and pre-market trading indicates this trend might persist today.

My position on BIDU is still in the OK zone, and I am going to hold to it, unless it’s going to dip below -7%.

Tags: stock market, portfolio, BIDU

SFCC (homepage) has broken its cup-with-handle base that formed end of February.
A clinical research / drug company.

Fundumental:
A reasonable  growth stock, operating in a medium sector (3% over the index in past month). – 77% 3 years sales rate, 3 years EPS as 42%. Solid. No PR / news.

Techincal
Its breakout point was 42.24 which broke on Sep/9 (Friday) with a big volume – as needed. I am buying a “feel the water” lot – to start seeing if it behaves as expected.
If it does, I’ll increase my hold at around +5%, if it does not, I’ll cover my losses at -7%.

Gut feeling:  none. Wait and see what happens. The market is hot – there were no distribution days for over a week now, why not go into a new position?

Tags: stock market, investing, SFCC

A couple of weeks ago, my friend Shay asked me of my opinion of Baidu – a Chinese company that has recently gone public and created a lot of buzz as it takes Google’s market share in China.
A brief research of this company got me to a conclusion that I can’t say anything interesting about it  since it has a very short market track-record.

During the last couple of weeks, there was a big fuss about Google snatching Microsoft’s ex-VP in charge of Chinese related strategy.  If you read the buzz, two things become clear:

• both Google and Microsoft are eager to get into the Chinese market (surprise surprise)


• Microsoft has troubles getting into the Chinese market.


• Google might have troubles getting into the Chinese market.

These convinced me to take a gamble, and buy a bit of BIDU stock. Four days later, BIDU rallied, and I was +5%, and decided to double my holding, realizing that this is a blind bet, and I was to monitor this position closely, and cut my losses at first sign of trouble. It’s a very risky, gamble-like position.

Today, BAIDU has jumped over +12% (at the time of writing).

Here are my past BIDU transactions.
In the future, if you would like me to post whenever I go into a new position, or out of an existing position, please drop me a line, or leave a comment to this post.

Old BIDU transactions:

08/26/2005 Bought 10 BIDU @ 80.23
08/30/2005 Bought 15 BIDU @ 82.99 -
09/09/2005 Bought 25 BIDU @ 88.88

Current BIDU price: 109.20 (~ +27%)

Tags: stock market, investing, guide, howto, BIDU

All companies operate in markets. Every company has supplier companies, facilitator-companies and service companies feeding on its ability to grow its business.
When you identify a company with extraordinary growth, it sometime may be too late for you to buy stock, as its stock technical analysis might not reveal any good pivot points and sound bases. When confronted with this – try looking for companies that “feed off” the success.

I first encountered this with synaptics (SYNA), a company that manufacturers touch pads for laptops and hand-held devices. The important thing to note, is that this company had a contract with Apple, to supply the successful iPods touch-pads. Naturally, the booming iPod sales had drove Synaptics stock price to the roof.

A lesson learnt, and, to be honest – later applied by me without intent.





SYNA (blue) and AAPL (olive) Jul 03 -Dec 2004 - both price grow over 200%.


During the last year, the oil prices sky rocket. There are many quoted reasons for that – although I must say none of them strike me as being the real reason for the oil prices jump. Personally, I feel that somehow, the surging oil prices are the way in which gulf region oil producing countries get back at the all mighty US. That’s my take on the matter, although – it might be hindered by my prolonged existence in the Middle-East.


I first got acquainted with Tenaris (NYSE:TS) through MSN’s strategy lab’s Viviam Lewis.  Tenaris is a foreign company manufacturing pipes for the gas and oil industry. The two key points are: Foreign, and oil-industry.

Here is a chart for the crewed oil prices 2004 to date:





Source: http://futures.tradingcharts.com/chart/CO/W



Being a foreign company, Tanaris is conceived as a company less likely to get affected by events in Iraq or the U.S and is based in a fast-growing market – definitive strong points.

The war in Iraq, along with the surging oil prices, has driven expedited development of oil-fields and the need for transferring oil to, from and within fields has grown extensively.
Tenaris to Oil like Synaptics to Apple.

I bought TS on May 05, 2005 for 69.00, purchased a same lot (doubled my holdings) on 20 June 2005 @ 77.85, summing up to a total price of 73.42 a pop. Here is the graph of the stock from that time on.




Graph generated from marketwatch.com using their java based charting tool.

Interesting enough, this was a “by the book” position, as the technical analysis was just right: on May 05, TS broke out from a “cup with handle” base, on an extremely large volume.

These days, I am +60% (price @ 118) in the money – trying to decide weather I should try and sit out the 10-15% pullback which I expect to develop, or just move to cash right now.

Any suggestions?



Tags: stock market, investing, guide, howto