***Official*** 2011 Stock Market Thread

[FelixDeCat]

Nice! Glad I could help you get 15% in a day.

The Lord giveth and He taketh away -

ZSL down nearly 10% overngiht on stronger than expected jobs numbers.

Nothning is a sure thing, but trying to be short commodities after a violent correction can always lead to a "bad day".

 

[endervalentine]

Well, it also went from low $30's to $44 in about 2 months. I'm still a die hard bull on DNDN. There are 3 other billionaire investors in this with a lot more shares than I own. The earnings had nothing bad in it, and it is operating on schedule. When was the last time you saw a small bio-tech with a breakthrough drug trading only at 3x projected sales?

There are A LOT of players who do not want DNDN to succeed, especially big pharma. It's already approved and the only thing they can do is slow it down. There's also a boatload of shorts.

This company went from virtually $0 revenue last year, is going to earn about $350m-$400m this year (which I think is conservative on their part), $800m+ in 2012 and well over $1 billion onwards. This is only in the U.S. and not counting the ROW (rest of world), which they will probably go at it alone since they've been refusing partners... or get bought out. I am guessing that Provenge sales will peak at $4 billion. By then you can get out or hope that DNDN can apply this method to other drugs and not be just a one-trick pony. Either way, there will be plenty of time to sell at a much higher price than today.

Me buying this in 2009 at $4 was just sheer luck and gambling on the FDA approval. Now that they have a real drug and a revolutionary method of treating cancer, we could be looking at the next future Amgen.

thanks azurik! a lot of the reading material out there are bullish about dndn as well, the big question comes down to whether they can scale and expand their clinics successfully, within the us as well as ROW. if they can get the Los Angeles and Atlanta center approval from the FDA, it's more good news toward the right direction.

if it has the azurik's seal of approval, i'll be more comfortable buying on the drops, thanks! but seriously $4?!

 

[TheNinja]

The Lord giveth and He taketh away -

ZSL down nearly 10% overngiht on stronger than expected jobs numbers.

Nothning is a sure a sure thing, but trying to be short commodities after a violent correction can always lead to a "bad day".

Yup. Glad I got out yesterday. I mean, I'm all for riding a winner, but when you have such a huge increased in a shorted commodity in a single day, I see nothing wrong with taking the profits and running. Sure, you might miss another 15% day or something, but at least lock up some profits while you can. I never lost money taking profits. I have lost money riding a loser all the way down b/c I didn't want to sell and take realized loses though I think 15% realized loss is better than 50% paper loss.

 

[dullard]

The Lord giveth and He taketh away.

This is a volitile fund, especially now. If you are afraid of 10% swings, then you shouldn't own it. It was up 25% yesterday and down 5% today. It will be up big or down big tomorrow.

Yup. Glad I got out yesterday. I mean, I'm all for riding a winner, but when you have such a huge increased in a shorted commodity in a single day, I see nothing wrong with taking the profits and running. Sure, you might miss another 15% day or something, but at least lock up some profits while you can. I never lost money taking profits.

Nothing wrong with what you did. I'm still glad to get you 15%. And I see nothing wrong with taking profits no matter if it soared today or sank today. You could have gotten another 7% had you waited until the right time today (over $24/share), but you could have lost 5% too (about $21.5/share).

 

[richardycc]

bought some more SQNM @7.86 this morning, if everything goes well, it should go back to precrash $20+ level by end of this year.

 

[lothar]

Thank you Seth Klarman!!!!!
Still riding the PDLI wave.

 

[PimpJuice]

thank you seth klarman!!!!!
Still riding the pdli wave.

5% ytd?

 

[lothar]

5% ytd?

Do a search for when IHateMyJob and I had an interesting discussion on PDLI and check the time stamps.
*hint* It's in this very thread.

 

[PimpJuice]

Do a search for when IHateMyJob and I had an interesting discussion on PDLI and check the time stamps.
*hint* It's in this very thread.

Found it, nice call guys

 

[IHateMyJob2004]

Lothar did better than I did. I made about 10% and exited because I did not feel as though I understood the business well enough. Depending on when one bought, you could be up as much as 30%.

Just don't revisit this thread for my positive posts on LEE. I own it and dollar cost averaged recently. Currently at $1.10 or so. I bought in blocks at $2.70, $1.98 and $1.16. If they get the refinancing done, the stock could skyrocket. If not, it could be gone.

Best thing for me this year has been SD. Made about 50-60% on it in a few months. Lothar, was it you that got in at a really good price and probably made 200%?

 

[lothar]

Lothar did better than I did. I made about 10% and exited because I did not feel as though I understood the business well enough. Depending on when one bought, you could be up as much as 30%.

Just don't revisit this thread for my positive posts on LEE. I own it and dollar cost averaged recently. Currently at $1.10 or so. I bought in blocks at $2.70, $1.98 and $1.16. If they get the refinancing done, the stock could skyrocket. If not, it could be gone.

Best thing for me this year has been SD. Made about 50-60% on it in a few months. Lothar, was it you that got in at a really good price and probably made 200%?

LEE: I can't seem to put a price on it that I trust to be reliable at all.
Not to mention, that 11% terms of financing rate they got was absolutely ridiculous.

The extra interest expense alone would reduce FCF by quite a significant margin. :\
If they can't raise the financing they want through debt restructuring, expect massive shareholder dilution.
I will sit this one out for now. If massive shareholder dilution occurs, that may be the time to re-evaluate again or step in similar to what I did to Sandridge when they bought Arena Resources with mostly stock which increased share outstanding by 50+% and damaged long-term SD shareholders.

200%? more like 155.5%.
I could have gotten in lower than the $4.36 price I got if I didn't go visit my 3rd world country for almost 3 weeks at the end of August...I missed so many things.

Haven't done much lately, but I've been looking very closely at the retail sector. Especially ARO vs. AEO.
I predict that I may end up with one of them sometime in the future, but I'm still in the researching phase of AEO.
I have lots of stocks I want to look at....Radioshack, Lexmark, and a few others.

 

[IHateMyJob2004]

As for LEE, I don't expect to dolalr cost average again. It owuld have to get to like 50 cents for me to think about buying more shares. Part of the old deal included 25% shareholder dilution which was just stupid. It gave them an extra $18 million or so in cash when there is $1000 million in debt to refinance. The Warrants make more sense.

If someone lent LEE money at 8% and got warrants, everyone would win.

 

[routan]

in VHC Jun 25 calls at 2.05.
thank goodness was able to get out at 3.4

i'd have been crying right now
look at the after hours. down $4. crap.

 

[mitmot]

What happened to VHC after hours?

 

[JS80]

As for LEE, I don't expect to dolalr cost average again. It owuld have to get to like 50 cents for me to think about buying more shares. Part of the old deal included 25% shareholder dilution which was just stupid. It gave them an extra $18 million or so in cash when there is $1000 million in debt to refinance. The Warrants make more sense.

If someone lent LEE money at 8% and got warrants, everyone would win.

No one wants to invest in old media. They will be lucky to survive if the decline in revenues does not accelerate above the debt repayment. They will probably need to do another RIF and sell off assets in order to avoid bk.

All in all, I just don't see revenues stabilizing. It will decline to perpetuity.

 

[TheBDB]

Hypothetical question.

Let's say you wanted to earn about $4000 a month through the stock market. You can make less some months, even lose money for short periods of time, but it should average out to about $48,000 a year.

How much starting money would you need to do this, and what overall strategy would you use? Obviously I'm thinking about something with more risk than putting a million dollars in an account that makes a couple % a year. Do you think you could reliably make 10% per year? 20%? 50%?

 

[IHateMyJob2004]

No one wants to invest in old media. They will be lucky to survive if the decline in revenues does not accelerate above the debt repayment. They will probably need to do another RIF and sell off assets in order to avoid bk.

All in all, I just don't see revenues stabilizing. It will decline to perpetuity.

Read about the industry and it's actual state, not perception. I thoguht the way you do till I got beyond common misconceptions and actually read about what is going on in the industry.

Price follows value.

 

[IHateMyJob2004]

Hypothetical question.

Let's say you wanted to earn about $4000 a month through the stock market. You can make less some months, even lose money for short periods of time, but it should average out to about $48,000 a year.

How much starting money would you need to do this, and what overall strategy would you use? Obviously I'm thinking about something with more risk than putting a million dollars in an account that makes a couple % a year. Do you think you could reliably make 10% per year? 20%? 50%?

Buffett said that if had to manage millions instead of billions that he could do 50%+ a year.

Many value ivnestors do 20% a year.

The bottom line is that you need to learn how to invest intelegently. And hte only intelegent way to invest is value investing. You need to find good comapnies trading at a discount. Kinda like finding that $500K home in the $1M neighborhood that is actually worth $1M. Find the rare mispricing just once a year and you can do very well. Find that rare mispricing and pounce. For example, I have built up to 35% of my money being in JNJ over the past 3 years. I also have some LEAPS. There is a huge mispricing in JNJ and I pounced.

 

[TheBDB]

Buffett said that if had to manage millions instead of billions that he could do 50%+ a year.

Many value ivnestors do 20% a year.

The bottom line is that you need to learn how to invest intelegently. And hte only intelegent way to invest is value investing. You need to find good comapnies trading at a discount. Kinda like finding that $500K home in the $1M neighborhood that is actually worth $1M. Find the rare mispricing just once a year and you can do very well. Find that rare mispricing and pounce. For example, I have built up to 35% of my money being in JNJ over the past 3 years. I also have some LEAPS. There is a huge mispricing in JNJ and I pounced.

I hear what you are saying, but if a stock is "mispriced", what guarantee is there that traders will eventually get it right. It seems to my admittedly very inexperienced eyes that stock prices and market changes routinely don't have anything to do with the actual value of a company or it's sector. Maybe over the long run things do, but that seems to be missing a lot of opportunity to take advantage of market fluctuations that have nothing to do with the actual value of companies and everything to do with the fact there are humans being driven by greed. The markets are down about 1% today, including maybe 80% of all stocks. Did they all get bad news today? When they all go up in a couple days, is there not a way to take advantage of that? Rather than picking 1 mispriced stock and trying to get 20% in a year, what about trying to get 2% in the short term 10 times a year? Of course you will make mistakes sometimes, so that is why I was trying to figure out how much you would need to start, so you could cover the bad times. I know I sound like every other moron out there who says they can time the market, but I'm not looking at it as someone who wants to make millions day trading. I'd like to be somewhere between going to Vegas and putting it all on black, and getting less than 1% with a savings account.

 

[Imp]

I hear what you are saying, but if a stock is "mispriced", what guarantee is there that traders will eventually get it right. It seems to my admittedly very inexperienced eyes that stock prices and market changes routinely don't have anything to do with the actual value of a company or it's sector. Maybe over the long run things do, but that seems to be missing a lot of opportunity to take advantage of market fluctuations that have nothing to do with the actual value of companies and everything to do with the fact there are humans being driven by greed. The markets are down about 1% today, including maybe 80% of all stocks. Did they all get bad news today? When they all go up in a couple days, is there not a way to take advantage of that? Rather than picking 1 mispriced stock and trying to get 20% in a year, what about trying to get 2% in the short term 10 times a year? Of course you will make mistakes sometimes, so that is why I was trying to figure out how much you would need to start, so you could cover the bad times. I know I sound like every other moron out there who says they can time the market, but I'm not looking at it as someone who wants to make millions day trading. I'd like to be somewhere between going to Vegas and putting it all on black, and getting less than 1% with a savings account.

That's what I'm doing. Tell you what, it doesn't work because you're trying to predict the market. And as you've already noticed, there is absolutely no logic to it. Just look at today: oil is down, but so are all stocks. Stocks were down because oil was up and people were afraid of decreased consumer spending, and slower economic recovery. Well, now oil is down, so why in the hell are stocks down?

I made about 10% in 3 months buying dips and selling at peaks. I'm down to Just about 5% now because I "mis-predicted" a market correction (read: got greedy), and didn't want to take a loss. Now I'm waiting for my duds to recover (they will, will just take time since they're solid blue-chips), and haven't made anything since mid-February.

If I just bought and held a couple stocks that were severely under-priced when i first started, I'd be up more than I am now.

Best strategy I've found is to go long, slowly build positions so you can lower your average buy price, and have some insurance money on the side. Insurance money is about 25-50% cash so if the stock crashes, you can buy really low and be able to break-even sooner. Back to brass tacks...

 

[JS80]

Read about the industry and it's actual state, not perception. I thoguht the way you do till I got beyond common misconceptions and actually read about what is going on in the industry.

Price follows value.

We had this discussion before. I was Director of Finance in a print and digital media company until last year when I left. I'm well aware of what's going on and what the trend is/will be. I was an insider, whereas you're looking from an investor/outsider view, and you don't have access to the data I had.

 

[dullard]

Buffett said that if had to manage millions instead of billions that he could do 50%+ a year.

You can outpace the market for a while. But it all eventually ends. If you could always outpace the market, then you eventually will BE the market. And you can't outpace yourself. Just think about Buffett's quote. If he started with $1 million and made 50%+ a year, he'd be in the billion range in 17 years (probably less). Even his own quote shows it is eventually impossible to keep getting returns like that.

In reality, most people slip. Or hit a bad year/decade. Or get over confident. Or get too large. Or something.

TheBDB shouldn't count on more than 10% on average. That gives a rough estimate of $500k is necessary to get his goal. But, we need more information to get a better estimate. How many months/years can he go without a payment. If he hits a bad stretch for 10 years, can he go without a payment for 10 years? If not, he better start with more than $500k. 10% average doesn't go very far if your first few years are down years and you must withdraw.

 

[IHateMyJob2004]

Poeple that take avantage of market fluctuations are right about half the time. They are participating in a zero sum game. In the end, they probably perform about equal to the markets in general with the exception that they pay alot in capital gains taxes and commisions. So, they probably underperform the markets. Taken as a whole there is no way that this is not the case.

Think of the Sotck Market as being run by a person named Mr Market. Now, understand that Mr Market is manic depressive and things over the short term are crazy. Understanding that this manic depressive entity is not understandable is step one. So you can't take advantage of him. Step 2 is understanding that his nature casues mispricings. So, if you take your time, Mr Market will price a comapny worth $200m at $100m and at other times at $400m. This is how a value investor takes advantage of Mr Market.

Once you understand valuation, it is easy to figure out a companies value to you. That includes the notion that you don't know.

People to often try to find a catalyst through rather irrational means. To a value investor, value is the catalyst. It's simply a matter of when.

News outlets often say that some macro-economic news caused today's action. Why is it that oil dropping 2% one day causes the market to tank while on another day it rallies? Just realize that they are trying to get money via advertising dollars. Your best option is to not read anything in the news beyond important macro info like rail traffic and oil prices and the housing markets. Just understand them in long term terms. Don't care about daily moves. Worry about long term moves and think about where things are going.

Having cash in ones pocket at all times is very important and also one of the hardest things to get yourself used to. It's hard having 25% of your cash getting 1% in a savings account but you need to know that you need that money for when a gross mispricing occurs. Then you pounce.

FWIW: I have some Jan LEAPS at the 85 strike out to 2013. I paid 22 cents each. Actually $22 per option. If JNJ gets to $100 in the next 100 days, I will have $1500 per option. That is about 1.5%-2% of my portfolio. 35% of my money is in JNJ. I paid under $60 for it on average. It's at $66 today. I've owned it 1-3 years depending on when I bought each lot. Not much of a return annually, but it is a matter of time till it is over $90. Options are gambling (timing is involved) but I am taking advantage of a mispricing that the markets seem to be finally figuring out thanks to Goldman:
Goldman on Johnson & Johnson: 'Buy'
http://blogs.wsj.com/marketbeat/2011/05/11/goldman-on-johnson-johnson-buy/?mod=google_news_blog

 

[HopJokey]

Poeple that take avantage of market fluctuations are right about half the time. They are participating in a zero sum game. In the end, they probably perform about equal to the markets in general with the exception that they pay alot in capital gains taxes and commisions. So, they probably underperform the markets. Taken as a whole there is no way that this is not the case.

Think of the Sotck Market as being run by a person named Mr Market. Now, understand that Mr Market is manic depressive and things over the short term are crazy. Understanding that this manic depressive entity is not understandable is step one. So you can't take advantage of him. Step 2 is understanding that his nature casues mispricings. So, if you take your time, Mr Market will price a comapny worth $200m at $100m and at other times at $400m. This is how a value investor takes advantage of Mr Market.

Once you understand valuation, it is easy to figure out a companies value to you. That includes the notion that you don't know.

People to often try to find a catalyst through rather irrational means. To a value investor, value is the catalyst. It's simply a matter of when.

News outlets often say that some macro-economic news caused today's action. Why is it that oil dropping 2% one day causes the market to tank while on another day it rallies? Just realize that they are trying to get money via advertising dollars. Your best option is to not read anything in the news beyond important macro info like rail traffic and oil prices and the housing markets. Just understand them in long term terms. Don't care about daily moves. Worry about long term moves and think about where things are going.

Having cash in ones pocket at all times is very important and also one of the hardest things to get yourself used to. It's hard having 25% of your cash getting 1% in a savings account but you need to know that you need that money for when a gross mispricing occurs. Then you pounce.

FWIW: I have some Jan LEAPS at the 85 strike out to 2013. I paid 22 cents each. Actually $22 per option. If JNJ gets to $100 in the next 100 days, I will have $1500 per option. That is about 1.5%-2% of my portfolio. 35% of my money is in JNJ. I paid under $60 for it on average. It's at $66 today. I've owned it 1-3 years depending on when I bought each lot. Not much annually, but it is a matter of time till it is over $90. It's gambling (timing is involved) but I am taking advantage of a mispricing that the markets seem to be finally figuring out thanks to Goldman:
Goldman on Johnson & Johnson: 'Buy'
http://blogs.wsj.com/marketbeat/2011/05/11/goldman-on-johnson-johnson-buy/?mod=google_news_blog

Is your entire JNJ position in Leaps? I actually like the regular shares themselves; the divy is a nice bonus.

 

[IHateMyJob2004]

JNJ:

35% of my money is in JNJ stock.
1.8% of my money is in Jan 2013 LEAPS @85 (expire Jan 19, 2013)

The LEAPS are not a huge amount to loose if I do loose it all.

Ya, the stock is great. It's one of the best run companies and it is trading at a discount. Some think I am a fool for saying what I think it is worth because people run to PE ratios. PE is not a bad measure for JNJ (just how it has worked out in the past), but FCF is the real beautiful thing. The dividend is a nice bonus. Recently increased 3 cents (5%).