CTEX is trading at .0040 and is down 20% today... which is below our .0042 trailing stop. If it closes below .0042 today, we'll sell on the open tomorrow. Just check the closing price this evening, and if it's still under .0042, enter a sell at market order for the morning.
Best,
James
Wednesday, February 28, 2007
The Chinese Riddle... and Jim Rogers
Yesterday's worldwide selloff was pretty amazing... The worst single-day drop on Wall Street since 9/11... and the worst in the Chinese markets for a decade. Which raises the question: Why is China the best investment when it is the worst investment?
The answer comes from our old friend Jim Rogers, the smartest old Southerner since William Faulkner... Jim cofounded the Quantum Fund with George Soros, another tremendous investor.
Together they made their investors 3,999% returns in the first 10 years of the fund's existence.
Jim told me recently (he called me from his hotel room in China, in fact) that China would soon suffer a tremendous knock-down... shares would plummet... the world would be aghast... the lemmings would be running in all directions... and THAT, he said, would be the "Next Great Buying Opportunity."
I bet I know what Jim is doing this morning... snapping up fistfuls of his favorite Chinese stocks... building his yuan portfolio... backstroking merrily through the five feet of warm blood running through the streets.
Perhaps it would behoove us to do the same?
This could be a tremendous time to build your position in Kookmin Bank, for example, or Bunge, another good China Proxy play in our portfolio.
Because although yesterday's bloodbath was dramatic, here we are... still breathing, still surviving.
Fact is, we didn't get stopped out of a single position yesterday. Now we might today, who knows? Cemtrex is at .005, not far above our trailing stop of 0042. But even our proxy plays on China such as Kookmin Bank are still in the black, although they got slammed yesterday, of course.
I'm guessing the markets will remain sluggish today, with about two-thirds the volume from yesterday as everyone licks their wounds and waits for some signal... the lemmings, dear hearts, are always waiting for signals. I'm guessing the next one will be given in Fedspeak... but we shall see.
Meanwhile, my buddy at Sellatmarket.com, Al Murauski, ran a couple of our positions through their beta trailing stop software to show where we are relative to our trailing stops. It was a nice gesture and we thank him for it. Here is the chart for Bunge... you can see the big it we took yesterday.
BUNGE FALLS... STAYS ABOVE 25% TRAILING STOP
You can see that even with the massive pullback, we're still well above our current trailing stop... This gives a nice picture of the position's history since we got in...
Al's software does something else really nice, too... It adjusts your trailing stop automatically as the stock hits each new high... In some circles this is referred to as a "laddered stop" and it technically is how a trailing stop should work...
The only reason we don't always do laddered stops is that it would require almost constant monitoring of a stock trending upward.
So we're going to be beta testing Al's software, and writing about it in this space from time to time, because anything that can help us manage trailing stops with more efficiency can also help us beat the markets... which, besides keeping it green, is what we're here to do.
Good trading,
James
The answer comes from our old friend Jim Rogers, the smartest old Southerner since William Faulkner... Jim cofounded the Quantum Fund with George Soros, another tremendous investor.
Together they made their investors 3,999% returns in the first 10 years of the fund's existence.
Jim told me recently (he called me from his hotel room in China, in fact) that China would soon suffer a tremendous knock-down... shares would plummet... the world would be aghast... the lemmings would be running in all directions... and THAT, he said, would be the "Next Great Buying Opportunity."
I bet I know what Jim is doing this morning... snapping up fistfuls of his favorite Chinese stocks... building his yuan portfolio... backstroking merrily through the five feet of warm blood running through the streets.
Perhaps it would behoove us to do the same?
This could be a tremendous time to build your position in Kookmin Bank, for example, or Bunge, another good China Proxy play in our portfolio.
Because although yesterday's bloodbath was dramatic, here we are... still breathing, still surviving.
Fact is, we didn't get stopped out of a single position yesterday. Now we might today, who knows? Cemtrex is at .005, not far above our trailing stop of 0042. But even our proxy plays on China such as Kookmin Bank are still in the black, although they got slammed yesterday, of course.
I'm guessing the markets will remain sluggish today, with about two-thirds the volume from yesterday as everyone licks their wounds and waits for some signal... the lemmings, dear hearts, are always waiting for signals. I'm guessing the next one will be given in Fedspeak... but we shall see.
Meanwhile, my buddy at Sellatmarket.com, Al Murauski, ran a couple of our positions through their beta trailing stop software to show where we are relative to our trailing stops. It was a nice gesture and we thank him for it. Here is the chart for Bunge... you can see the big it we took yesterday.
BUNGE FALLS... STAYS ABOVE 25% TRAILING STOP
You can see that even with the massive pullback, we're still well above our current trailing stop... This gives a nice picture of the position's history since we got in...
Al's software does something else really nice, too... It adjusts your trailing stop automatically as the stock hits each new high... In some circles this is referred to as a "laddered stop" and it technically is how a trailing stop should work...
The only reason we don't always do laddered stops is that it would require almost constant monitoring of a stock trending upward.
So we're going to be beta testing Al's software, and writing about it in this space from time to time, because anything that can help us manage trailing stops with more efficiency can also help us beat the markets... which, besides keeping it green, is what we're here to do.
Good trading,
James
Tuesday, February 27, 2007
The Lemmings Are Sprinting
As I write, the S&P has sold off 23 points and is down 1.5%... and the Nasdaq's getting hit even harder... down 2.2% today.
Last night, I said the lemmings were in their starting blocks and aimed right toward the sea...
Today all they needed was the "starting gun" of a terrorist attack in Afghanistan to explode out of the blocks.
Who knows where the market will go from here. We are not strict market timers here. But we will wait until some stabilization to recommend out next play, whether it's a stock, green fund, or perhaps some super hot 10-year treasuries.
What we'll be looking for is something conservative... but not a "scaredy-cat" reaction to the coming market cool-off... A good sector play... something basic... something fundamental to human survival... something that pays good dividends, perhaps, and gives us simultaneous exposure to commodities and a greener world.
More to come... Till then, sit tight... and watch the fireworks. We're also monitoring CTEX closely here... It will probably stop out today. Don't sell until I give the order...
James
Last night, I said the lemmings were in their starting blocks and aimed right toward the sea...
Today all they needed was the "starting gun" of a terrorist attack in Afghanistan to explode out of the blocks.
Who knows where the market will go from here. We are not strict market timers here. But we will wait until some stabilization to recommend out next play, whether it's a stock, green fund, or perhaps some super hot 10-year treasuries.
What we'll be looking for is something conservative... but not a "scaredy-cat" reaction to the coming market cool-off... A good sector play... something basic... something fundamental to human survival... something that pays good dividends, perhaps, and gives us simultaneous exposure to commodities and a greener world.
More to come... Till then, sit tight... and watch the fireworks. We're also monitoring CTEX closely here... It will probably stop out today. Don't sell until I give the order...
James
Monday, February 26, 2007
Our CECE Trade Is Up 77%
NEW TRAILING STOP FOR CECE: $13.31
Since we added CECO to the portfolio just a couple months ago, it has been our star performer. The stock just keeps surging and surging, and pretty soon I'm going to start wondering... do we have another Nutrisystem on our hands here?
Nutrisystem as you may recall was the most prolific stock of 2005, soaring more than 1,000% that year.
Okay, I'm jumping the gun... CECO is merely on track to generate about 900% this year, so, well...
Today, for example, the markets are getting hammered yet again. Our Cemtrex play is once again hovering just above the trailing stop. This is the dog of the portfolio, and along with SLUP, it makes me think we are banning pink sheet stocks from this portfolio from now on... Unless there is some absolutely overwhelming reason to reconsider this, pink sheets are getting the pink slip.
No more pink sheets here... Out you devils! GO TOWARD THE LIIIIIGHT... and away from goofy little stocks that rise and fall quicker than front-month options on KEPCO.
But back to CECO...
Today, the stock rose another 5% and is trading almost 78% above our entry price... rising from $9.75 to $17.75... So to protect our profits here... what we're going to do is this...
Adjust your trailing stop here... The new stop will be $13.31...
So if CECO closes at $13.31 or below on any given day, we're selling the next morning, no questions asked. For example, if the stock craters tomorrow and drops to $13.31, we'll still have booked a solid 53% gain. The idea would be to recapitalize your account and get ready for the next addition to the Evergreen Portfolio.
I don't like the market's action lately, so I'm keeping the powder dry until we get some directional momentum.
Meanwhile, we can be heartened that we have some good exposure to a company like Bunge, which shouldn't be nearly as vulnerable to a major stock pullback because it's a commodity stock. Not that I'm calling a bear claw here... But these markets are spooky, are they not? I don't like it when Bernanke's threatening a recession... Mysteriously laying off interest rates... And the market's going down... all at once.
I ain't no economist, but I do pride myself on a close kinship with the zeitgeist (whatever the hell that is). And if the herd's lining up the way I think it is... lemmings in their starting blocks pointing straight toward the cliff... we could be in for a summer of really crappy stock returns.
And traditionally commodities zig when stocks zag... so Bunge, well, Bunge could be our friend. And it's already up 18.6% for us in about 2 months.
New trade coming later this week... I'm looking for a safe portfolio stabilizer with some upside.
ANOTHER NOTE: I'm in talks with some nice and very mathematically advanced gentlemen who are developing a computerized trailing stop software system that we might implement or at least beta test with some of our Green Investments positions... I will keep you posted.
Good trading,
James
Since we added CECO to the portfolio just a couple months ago, it has been our star performer. The stock just keeps surging and surging, and pretty soon I'm going to start wondering... do we have another Nutrisystem on our hands here?
Nutrisystem as you may recall was the most prolific stock of 2005, soaring more than 1,000% that year.
Okay, I'm jumping the gun... CECO is merely on track to generate about 900% this year, so, well...
Today, for example, the markets are getting hammered yet again. Our Cemtrex play is once again hovering just above the trailing stop. This is the dog of the portfolio, and along with SLUP, it makes me think we are banning pink sheet stocks from this portfolio from now on... Unless there is some absolutely overwhelming reason to reconsider this, pink sheets are getting the pink slip.
No more pink sheets here... Out you devils! GO TOWARD THE LIIIIIGHT... and away from goofy little stocks that rise and fall quicker than front-month options on KEPCO.
But back to CECO...
Today, the stock rose another 5% and is trading almost 78% above our entry price... rising from $9.75 to $17.75... So to protect our profits here... what we're going to do is this...
Adjust your trailing stop here... The new stop will be $13.31...
So if CECO closes at $13.31 or below on any given day, we're selling the next morning, no questions asked. For example, if the stock craters tomorrow and drops to $13.31, we'll still have booked a solid 53% gain. The idea would be to recapitalize your account and get ready for the next addition to the Evergreen Portfolio.
I don't like the market's action lately, so I'm keeping the powder dry until we get some directional momentum.
Meanwhile, we can be heartened that we have some good exposure to a company like Bunge, which shouldn't be nearly as vulnerable to a major stock pullback because it's a commodity stock. Not that I'm calling a bear claw here... But these markets are spooky, are they not? I don't like it when Bernanke's threatening a recession... Mysteriously laying off interest rates... And the market's going down... all at once.
I ain't no economist, but I do pride myself on a close kinship with the zeitgeist (whatever the hell that is). And if the herd's lining up the way I think it is... lemmings in their starting blocks pointing straight toward the cliff... we could be in for a summer of really crappy stock returns.
And traditionally commodities zig when stocks zag... so Bunge, well, Bunge could be our friend. And it's already up 18.6% for us in about 2 months.
New trade coming later this week... I'm looking for a safe portfolio stabilizer with some upside.
ANOTHER NOTE: I'm in talks with some nice and very mathematically advanced gentlemen who are developing a computerized trailing stop software system that we might implement or at least beta test with some of our Green Investments positions... I will keep you posted.
Good trading,
James
Sunday, February 25, 2007
Waiting for a Window
Right now, the S&P is trading at 1451, about 20 points above its 50-day moving average... but it's almost 120 points above the 200-day moving average, which would indicate the possibility that the recent market froth and churn is the runup to a mini-correction.
Regardless, we won't fight the market. Instead, we're waiting for a bit of updraft to launch into our next position... There's just something about starting into a position with some momentum that seems to bode well for long-term performance.
Till then, hang loose. We've got our trailing stops in place, but nothing looks in danger of being hit tomorrow on the open.
Bernanke by the way is winning favor all around, and rightly so, it would seem. Could it be that we have an egoless Fed Head? Not likely. But we've already seen the difference - or potential difference - between the Bernanke era and that of his predecessor, Mr. Greenspan. So far, Bernanke looks downright sanguine compared to the constantly tinkering little elf that was Greenspan. Bravo, helicopter Ben... for now.
James
Regardless, we won't fight the market. Instead, we're waiting for a bit of updraft to launch into our next position... There's just something about starting into a position with some momentum that seems to bode well for long-term performance.
Till then, hang loose. We've got our trailing stops in place, but nothing looks in danger of being hit tomorrow on the open.
Bernanke by the way is winning favor all around, and rightly so, it would seem. Could it be that we have an egoless Fed Head? Not likely. But we've already seen the difference - or potential difference - between the Bernanke era and that of his predecessor, Mr. Greenspan. So far, Bernanke looks downright sanguine compared to the constantly tinkering little elf that was Greenspan. Bravo, helicopter Ben... for now.
James
Monday, February 12, 2007
Slapping the Laggards... And a Note on Trailing Stops
CTEX is trading about 14.3% below our entry point right now... KEP is flat, and getting out of our calls early is looking like a better decision by the day (remember, we took a 66% gain on our calls in a few short weeks). SLUP is still trading down about 11%.
What to do with these laggards?
Fortunately there is an answer...
Do nothing.
The time to act is when our trailing stops are hit or when I tell you to exit a position (there is no TS on KEP or SLUP, so I will update you if we ever want to exit these long-term position for any reason).
Again, the TS on CTEX is .0042.
On a brighter note...
Smooth sailing,
James
What to do with these laggards?
Fortunately there is an answer...
Do nothing.
The time to act is when our trailing stops are hit or when I tell you to exit a position (there is no TS on KEP or SLUP, so I will update you if we ever want to exit these long-term position for any reason).
Again, the TS on CTEX is .0042.
On a brighter note...
- We're up 55% on CECO...
- We're up 17% on Kookmin Bank...
- We're up 12% on Bunge...
- We took profits of 33% and 66% on our KEPCO calls...
Smooth sailing,
James
Sunday, February 11, 2007
CTEX and our Trailing Stop
CTEX has been acting like a sick fish lately, circling the tank haphazardly despite some good news pertaining to new agreements and the Chinese carbon credit market. I'll update you on this news soon, but for now just keep an eye on the stock. It's still hovering at 0.0060... and if it closes at 0.0042 or below, we'll sell the next day. Right now CTEX is at 0.0060.
Here's the original recommendation, to give you some context with where we're at with this play...
"Speculators ONLY: Add Cemtrex (CTEX.PK) to the portfolio at .0070, and place a trailing stop under this at 40%, meaning we'll sell if it closes under .0042 at any point going forward."
Again, we still expect CTEX to bounce, but these are the pink sheets after all.
Hang loose,
James
Here's the original recommendation, to give you some context with where we're at with this play...
"Speculators ONLY: Add Cemtrex (CTEX.PK) to the portfolio at .0070, and place a trailing stop under this at 40%, meaning we'll sell if it closes under .0042 at any point going forward."
Again, we still expect CTEX to bounce, but these are the pink sheets after all.
Hang loose,
James
Tuesday, February 6, 2007
Sell Remaining KEPCO Options
Sell the remaining KEP options... We've already locked in 33% and 66% gains along the way here... to take a 66% loss on the remaining 1/4 of our original position is better than letting the calls expire worthless... Sell em now. On average we're booking gains of about 40% on this position -
In other news, our CTEX stock has remained above the trailing stop... after flirting with our trailing stop for almost a week. This play on carbon credit brokerage could enjoy a news-related bump over the next several months as Davos ripples into the media and the culture. We're still below the waterline here, but sit tight. And do mind the closing price here. Again, if it closes below 40%, we'll be selling next morning.
Good trading,
James
In other news, our CTEX stock has remained above the trailing stop... after flirting with our trailing stop for almost a week. This play on carbon credit brokerage could enjoy a news-related bump over the next several months as Davos ripples into the media and the culture. We're still below the waterline here, but sit tight. And do mind the closing price here. Again, if it closes below 40%, we'll be selling next morning.
Good trading,
James
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