DarterBlue Posted May 31, 2020 Author Report Share Posted May 31, 2020 13 minutes ago, golfaddict1 said: @DarterBlue, fyi from this weekend’s Barron’s paper with SW mention. I hope Barron's does not cause the whole airline group to pop at the open, Monday. Back in the day, it certainly used to have that effect. At least it did not mention UAL as a preferred buy. LUV, bounced straight up off its lows (V shape bottom). I tend not to like V shapes as there are usually more losers left holding the stock who will be inclined to sell on the way up. But, occasionally, the V's can be the most powerful bottoms. I guess we will see how it all plays out soon. Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted May 31, 2020 Report Share Posted May 31, 2020 I’m thinking about purchasing some dividend stocks for the long Haul Bank of America Wells Fargo BP Coca cola thoughts on those 4 companies Quote Link to comment Share on other sites More sharing options...
HooverOutlaw Posted May 31, 2020 Report Share Posted May 31, 2020 1 minute ago, imaGoodBoyNow said: I’m thinking about purchasing some dividend stocks for the long Haul Bank of America Wells Fargo BP Coca cola thoughts on those 4 companies Wells Fargo lost a lot of money when they got millions of accounts breached about 2 years ago. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 1, 2020 Author Report Share Posted June 1, 2020 21 minutes ago, imaGoodBoyNow said: I’m thinking about purchasing some dividend stocks for the long Haul Bank of America Wells Fargo BP Coca cola thoughts on those 4 companies As John Maynard Keynes remarked back in the 1930s, "In the long run we are all dead." Seriously, I am not the right person to ask that question, assuming it was directed at me. For I am a trader, not an investor. A better gauge of their long term prospects would be to look up Berkshire Hathaway's long term holdings over the last 20 years focusing on how much of each of those companies it held at the end of each year. Based on whether the amounts have gone up or down with the passage of time, will give you some clues as to whether they are good investments or not. Why do I suggest Buffett? He has the best long term investment track record of all value investors. I know he has owned Wells Fargo and Coca Cola. Not sure about BP and Skank of America. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 1, 2020 Author Report Share Posted June 1, 2020 On 5/31/2020 at 9:24 AM, DarterBlue said: As of now, UAL will be bought at a limit price of $27.60. The other position will likely be ADI or SHOP which was not on the above list, but which has a compelling chart. If SHOP, I don't intent to pay more than $747 for it. ADI's purchase price is more flexible. The stock has a tighter trading range and anywhere within it is fair game. @imaGoodBoyNow @FootballGuy I think UAL is a screaming buy here subject to not paying more than $27.60. It has had massive accumulation at the lows and I don't think there is much downside risk, but the upside could be at least 60% in the next six weeks. I like those odds. If it works out, I owe one of you dinner. I have purchased 61 shares of SHOP at $747 for a cost of $45,647. UAL is up big on the day; I won't chase it even though I like it a great deal. If it does pull back some, I may pay up a bit but I am not going to buy it for $1.20 above Friday's close. Risk management means sometimes passing on potential winners. If you chase them, often you end up buying too far from logical stop loss points which cause you to take bigger losses if the trade does not work out. Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted June 1, 2020 Report Share Posted June 1, 2020 3 minutes ago, DarterBlue said: I have purchased 61 shares of SHOP at $747 for a cost of $45,647. UAL is up big on the day; I won't chase it even though I like it a great deal. If it does pull back some, I may pay up a bit but I am not going to buy it for $1.20 above Friday's close. Risk management means sometimes passing on potential winners. If you chase them, often you end up buying too far from logical stop loss points which cause you to take bigger losses if the trade does not work out. Okay so one of my original penny stocks went bankrupt and now the stocks are flatlining at .09 a share, and your not allowed to buy shares you can only sell it AKORN my question is should I take the loss and sell my 1000 shares for $130 or is their a chance they can rebound and the stocks can go back up Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 1, 2020 Author Report Share Posted June 1, 2020 6 minutes ago, imaGoodBoyNow said: Okay so one of my original penny stocks went bankrupt and now the stocks are flatlining at .09 a share, and your not allowed to buy shares you can only sell it AKORN my question is should I take the loss and sell my 1000 shares for $130 or is their a chance they can rebound and the stocks can go back up That is a hell of a question: Is there a chance it can rebound some? Yes. But what are the odds? The odds are not good. It is like playing Texas Holdem and you need one card for a low straight when it is pretty clear that others in the game have at least two pairs if not a full house. Yes, you can stay for the last card and even win if all the others have are two pairs and you get the needed three. But the full house still beats you if only one player has it. My inclination would be to take the $130 if you can get it. That can buy a really nice meal, or a ticket to a show (in normal times). The question is also like asking whether you should cover an option with a day to expiration and take the big loss. Unless you are very, very sure some market moving news is going to break in the next few hours, you take the loss and whatever cash you can get back. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 1, 2020 Author Report Share Posted June 1, 2020 Stocks closed broadly higher on lower volume. Given the economic and especially social backdrop, this was some accomplishment. Am I surprised? No Wall Street is amoral at best and immoral at worst. With them it has always been all about the Benjamins. And the Fed has ensured there will be plenty of those. Let’s be clear, this is all faux wealth. It is even more so than either the Dotcom or Housing bubbles. But for now, it is going full throttle. As a trader, my job is to take advantage of this while the sun shines with one eye on the door. The advantage I have is that I am small. Thus, I can get in and out of almost all my positions without having much impact on price. On the day, the range of gains was from .36% on the DOW to 1.14% on the Mid Cap index. Advancing stocks held solid leads of 22-7 and 19-13 on the NYSE and NASDAQ, respectively. As of the close, I am still bullish and expect the averages to work higher. On a personal note, for the second day in a row, I out legged the market. I was up over $6,600 on the day or over 1.37% with less than a third of capital invested. I purchased 61 shares of SHOP at 747, and was up nicely at the close. However, I was not able to get UAL at an acceptable price. One of my rules of thumb, is: never, ever chase the cyclicals. If you get a good entry point, by all means take it, but don’t confuse this type of stock with the high powered growth names. I expect to try again tomorrow. I shall not pay more than $28 per share. If it does not pull back to that range over the next two days, I will let it be and look elsewhere for my final position. Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted June 2, 2020 Report Share Posted June 2, 2020 4 hours ago, DarterBlue said:I shall not pay more than $28 per share. If it does not pull back to that range over the next two days, I will let it be and look elsewhere for my final position. Inquiring minds wanna know, who cares is if it’s at 28 or 29 30 31 , it’s gonna go up , why does it have to be 28? Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 2, 2020 Author Report Share Posted June 2, 2020 12 hours ago, imaGoodBoyNow said: Inquiring minds wanna know, who cares is if it’s at 28 or 29 30 31 , it’s gonna go up , why does it have to be 28? 16 hours ago, DarterBlue said: I expect to try again tomorrow. I shall not pay more than $28 per share. If it does not pull back to that range over the next two days, I will let it be and look elsewhere for my final position. It's about risk/reward. I think UAL has 60% appreciation potential. That's not bad. But it hinges on several unknowns. Will Covid-19 really go away? We don't know. It may have to wait on a vaccine. That will slow down travel. Also, how do airlines make profits if they have to retool the seating areas to accommodate fewer people? Can they pass on the additional costs to the flyers? Finally, and most important, when I take a position, my risk management techniques require I lose no more than 2% of my total trading capital, max. Can I buy UAL at 30 or 31 and only risk 2%? You would think yes. And in a sense you are right. But given the number of shares and total dollar commitment to the position what does this imply for where I put my stop? Is the required stop in a place that gives the stock the benefit of the doubt? Or is it above logical support? If the latter, then I am faced with either selling the stock too soon or accepting a larger loss than I am willing to. Neither of these options appeal to me. What I am trying to teach, for those that carefully read what I post here, is that to make this into a profitable endeavor, stock selection is only a small part of the equation. Trading the markets involves going up against some very smart, disciplined minds that want to take your money. To ensure they do not, to give you a chance to succeed against them, you have to both outwork and out think them to a degree. While I find financial markets fascinating, this is not fun and games to me. I don't do it for the adrenaline rush. The sole objective is to make money. To do this means I have to control my risk. One way to do so, is to buy the right security at the right time. Having said all of that, it is quite possible UAL may keep galloping. If it does, good luck to it. The thing is, I know beyond a shadow of a doubt that there will be other securities that will be just as profitable that I will have the opportunity to buy. All I need to do is bide my time, waiting patiently till the opportunity appears. To use a crass example, the overanxious guy seldom gets the girl, and if he does, he generally fails to satisfy. Had I analyzed UAL last Thursday, I would have bought it for sure on Friday before it made the big move today. But that is coulda, shoulda. The fact is, I did not ... Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 2, 2020 Author Report Share Posted June 2, 2020 Stocks closed broadly higher exhibiting classic bullish action within a context of social chaos. Volume was higher and the market closed at day highs. For bulls, it does not get much better. At the close, the range was from a gain of .59% on the NASDAQ to 1.23% on the NYSE comp. Advancing stocks led 11-4 on the NYSE and 5-3 on the NASDAQ. Try as I might, I honestly cannot find anything to criticize from a bullish standpoint. The market clearly intends to go higher in the near term regardless of what happens later this year or next. In situations like this, one can only find the right vehicles and enjoy the ride. From a personal perspective, for the third consecutive day, I did well. I was up approximately $4,700 or .96%. All the positions I own: ZM, TTD, SHOP and the SPY, August Calls, closed solidly in the black. After the close, ZM reported earnings that totally obliterated analysts estimates. In after hours trading, the stock was all over the place from up over $10 to down. At last look it was up over 2%. Given its very steep runup since Friday, if it pulled back a bit tomorrow, I would not be surprised. However, over the next six months, I think this one has a very good shot at doubling. It is my intention to try and capture this move despite the volatility of this issue. For the second day in a row, I failed to get UAL at an acceptable price. 1 Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted June 2, 2020 Report Share Posted June 2, 2020 Bought LUV 32.5 Call yesterday for $170 sold the contract for $320 today for a nice profit, 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 2, 2020 Author Report Share Posted June 2, 2020 1 minute ago, imaGoodBoyNow said: Bought LUV 32.5 Call yesterday for $170 sold the contract for $320 today for a nice profit, Your first options, trade? Congrats! Back when I first opened my account, most brokers required you have at least 2 years market experience before they would give you a margin account with options privileges. Things have changed since then ... 1 Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted June 2, 2020 Report Share Posted June 2, 2020 2 minutes ago, DarterBlue said: Your first options, trade? Congrats! Back when I first opened my account, most brokers required you have at least 2 years market experience before they would give you a margin account with options privileges. Things have changed since then ... Yes my first ever option , I figured it’s a lot easier learning about options by just trial and error, I bought these contracts too soon, ends Friday, unfortunately ima lose out on ual call because I took to high of a strike price, for god knows why Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted June 2, 2020 Report Share Posted June 2, 2020 6 minutes ago, DarterBlue said: Your first options, trade? Congrats! Back when I first opened my account, most brokers required you have at least 2 years market experience before they would give you a margin account with options privileges. Things have changed since then ... Ya they make you fill out a instant questionnaire before you get qualify for options, like are you a beginner trader or expert, how much do you make a year, how much assessts do you have , answer them correctly and your a Bonafide options Trader 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 2, 2020 Author Report Share Posted June 2, 2020 1 hour ago, imaGoodBoyNow said: I bought these contracts too soon, ends Friday, unfortunately ima lose out on ual call because I took to high of a strike price, for god knows why Probably because the higher strikes were cheap. 😁 1 Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted June 3, 2020 Report Share Posted June 3, 2020 @DarterBlue some time tomorrow can you look at this article and give me your thoughts on the company https://www.google.com/amp/s/www.forbes.com/sites/alanohnsman/2020/06/02/hydrogen-truckmaker-nikola-is-ready-for-its-nasdaq-debut/amp/ Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 3, 2020 Author Report Share Posted June 3, 2020 6 hours ago, imaGoodBoyNow said: @DarterBlue some time tomorrow can you look at this article and give me your thoughts on the company https://www.google.com/amp/s/www.forbes.com/sites/alanohnsman/2020/06/02/hydrogen-truckmaker-nikola-is-ready-for-its-nasdaq-debut/amp/ The technology seems very interesting. And, for me, as a leftist, on the surface, it's far superior to the petroleum based vehicles we have on the road today, assuming the technology works as stated. I find its decision to go public via reverse merger very interesting and on the face concerning, as historically, reverse mergers were used to get some very dubious, if not nefarious, companies trading in the public domain. The kind of companies peddled by the: "Wolf of Wall Street." These were often controlled by the mafia. More typically, companies such as Nikola would be venture capital funded until the product development phase was completed or at least well underway. The VC's would get their's back either in an IPO (initial public offering), or when a larger company bought the fledgling out. So, the method is of some concern. The fact that this company is going straight to the NASDAQ National Market, is a vote of confidence, though. As acknowledged, the company will need a lot of further funding before its sales and market share can explode. This will mean either issuing a lot of debt, convertible debt, or having several secondary offerings of its stock. Two of these options will be dilutive to current or prospective shareholders. To sum up: this is an intriguing concept. If it works, it has the potential to be a total game changer. However, there are significant risks and even if it works, it may take a while before the benefits accrue to shareholders. If you have some money that you can afford to possibly tie up for a couple years, it is possible you may be very well rewarded. In essence, an investment today would be akin to playing the role of VC to an existing publicly traded company. Thanks for bringing it to my attention. I may do some more digging on this company over the next week. 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 3, 2020 Author Report Share Posted June 3, 2020 Stocks closed broadly and powerfully higher on significantly higher volume. The action was unmistakably bullish! At the close, the range was from a gain of .49% on the NASDAQ 100 to 2.72% on the MID Cap index. Ironically, the index with the smallest gain, recorded an all-time high. The action this year has been nothing short of remarkable. In five short weeks, the averages plunged 35% to near 40% depending on the average. Now, in just over 10 weeks, the first of the indices has recouped all of its losses and the broad NASDAQ is now less than 1.5% away from doing the same. And all this has occurred with Covid-19 still killing way too many Americans daily and mass social unrest sweeping across the country. On the day, breadth was outstanding. On the NYSE it was 6-1 positive. On the NASDAQ it was 2.2-1 positive. We are now significantly overbought. So, I expect a pullback if not tomorrow, then by Monday at the very latest. However, with that said, I see no signs of a top that could lead to a correction or something worse. No, I see higher prices ahead. The Fed’s cocaine induced liquidity has done its job for now. Unfortunately, it will set us up for the next meltdown. But for now, who’s worrying? On the day, I again fared very well. No, I did not out leg the MID Cap or Russell, although if I had paid up for UAL I would have. However, I still managed to gain 2.25% or over $11,000 on the day. The gains were made on the wings of ZM and TTD, together with a nice run in the options position. These were offset by a greater than 2% loss in SHOP. Do I regret not chasing UAL? No, I do not. The only thing I regret is not looking at the chart Thursday of last week instead of over the weekend. Had I looked at it carefully Thursday, I would have bought it Friday and would not have been confronted with this issue. The thing is I rigorously adhere to my methodology, as I have found that when I stray, I lose more often than not. Yes, this one got away (it was up about 12% today). But my filters will detect other opportunities if the trend continues its upward trajectory. Of this I am sure. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 3, 2020 Author Report Share Posted June 3, 2020 20 hours ago, imaGoodBoyNow said: @DarterBlue some time tomorrow can you look at this article and give me your thoughts on the company https://www.google.com/amp/s/www.forbes.com/sites/alanohnsman/2020/06/02/hydrogen-truckmaker-nikola-is-ready-for-its-nasdaq-debut/amp/ https://www.fleetowner.com/equipment/article/21132890/with-nikola-now-public-its-time-to-know-ceo-trevor-milton @imaGoodBoyNow, take a look at the above industry article. They interview the founder. I am starting to think you may have found gold. I want to see how it trades under the new symbol tomorrow. The stock has run up in anticipation of the merger, and from a technical standpoint, it would be hard for me to buy it here, given the way I trade. However, if it could form a meaningful base, I may take at least a half position in this puppy. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 3, 2020 Author Report Share Posted June 3, 2020 https://seekingalpha.com/article/4347919-avoid-vectoiq-acquisitions-shares-ahead-of-nikola-merger-after-this-weeks-rally A second article with caveats. Most concerning is that the founder of Nikola was willing to sell 7,000,000 shares back to the new company immediately upon closing of the deal (tomorrow) at $10 per share. Either he has cash flow issues himself, or maybe he is not as confident in its future success as one would want. To be fair, he does still own a lot of stock that is locked up for the next year. 1 Quote Link to comment Share on other sites More sharing options...
imaGoodBoyNow Posted June 4, 2020 Report Share Posted June 4, 2020 3 hours ago, DarterBlue said: https://www.fleetowner.com/equipment/article/21132890/with-nikola-now-public-its-time-to-know-ceo-trevor-milton @imaGoodBoyNow, take a look at the above industry article. They interview the founder. I am starting to think you may have found gold. I want to see how it trades under the new symbol tomorrow. The stock has run up in anticipation of the merger, and from a technical standpoint, it would be hard for me to buy it here, given the way I trade. However, if it could form a meaningful base, I may take at least a half position in this puppy. I made a nice profit on a call I made with them, I’m deciding if I want to exercise it and buy the 100 shares Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 4, 2020 Author Report Share Posted June 4, 2020 14 minutes ago, imaGoodBoyNow said: I made a nice profit on a call I made with them, I’m deciding if I want to exercise it and buy the 100 shares When does it expire, Friday? If so, you need to make a quick decision. One thing I that is unclear from what I have read, is who is behind the technology? It does not seem to be the guy (the founder) who is selling the stock back to the "new company." But, if this technology works, there has to be someone (or plural), with a science background. If this were a traditional IPO, I would read the Prospectus and decide whether his/her credentials and experience seemed legit. But it is not. Maybe there is mention of this in the filings of the "acquirer." I am going to see what I can find. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 4, 2020 Author Report Share Posted June 4, 2020 https://www.sec.gov/Archives/edgar/data/1731289/000104746920002928/a2241585z424b3.htm If you want to get your feet wet as an analyst, the above link presents in beautiful legalize all you ever wanted to know about the transaction taking Nikola public. Once I wade through what I deem important, I will give you my thoughts. I charge $300 per hour for such services. JK, but this is actually tedious work. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted June 4, 2020 Author Report Share Posted June 4, 2020 46 minutes ago, imaGoodBoyNow said: I made a nice profit on a call I made with them, I’m deciding if I want to exercise it and buy the 100 shares After a preliminary look at some of the critical sections of the filing documents, I recommend that you sell calls to close and book your profits on the option you have, and avoid exercise. Why? While the company's business model and technology are intriguing, it is at least two years away from having any significant revenue. A lot can go wrong in that time. Here is the deal: Normally at this stage of development, it would still be financed by Venture Capitalists. It would probably be a third or fourth round funding. VC's are very, very good at getting stock on the cheap. That is how they make their money. The financing usually comes at the price of convertible debt, warrants attached to very cheap common stock, or some kind of convertible preferred securities. The bottom line is the VC's get very cheap stock or the right to purchase very cheap stock in exchange for their money. By doing this reverse merger, the current owners get to liquidate a big chunk of their stock years ahead of when a traditional IPO would take place (see my prior post about the cash out of shares). Normally, he would be at least 18 months away from doing this. So, what are you faced with? You are faced with buying via exercise the stock for much more than a VC would ever pay. Now given that the market is frothy, it may still pay out for you to do this. But, I don't at all like the risk reward. Given where you are in your investment/trading career, I would recommend you leave situations like this to seasoned professionals. While it is a big step up from penny stocks, there are still many more well established companies that can earn you sweet returns. Later on, when you have substantial experience and a lot more capital you can afford to put at risk, you can consider situations like this. That's just my ten cents. I am not trying to steer you wrong. And, my advice may prove to be unprofitable as in this market environment, the stock of the new company could skyrocket. It is just that I think that even if this were to prove fruitful for you, it would be teaching you the wrong lessons. @Troll do you care to chime in? Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.