Sunday, June 14, 2009

Chinese Jewelry Maker FUQI

Last week was pretty blah for my investing strategies. My biggest frustration was Chinese jewelry maker FUQI, which I had bought last Friday 6/5 at $14.90, and watched climb $18.70 (25%) by noon Wednesday. Then it started a dive that lasted into Thursday. My trailing stop loss order kicked in and I got out with a nice 18% profit after 4 days, selling out at $17.64! The stock retreated all the way down to $16, then started back up. (This is when you usually yell at the horror movie actors, "DON'T GO BACK IN THAT SCARY HOUSE, YOU FOOL!") So... I got back in at $17.35. Minutes later... the stock took another turn, and headed down. It waffled the rest of Thursday, and then started a dive Friday again... all the way down to $14.81 where I sold out again around noon. Minutes later, the stock turned back up and closed at a respectable $16.80. Jason Jason Jason Jason... Kill kill kill kill.... I made about 100 bucks, after commissions for 4 trades. That's 2.8% for a week, which in retrospect is not bad.

For the week, the Dow was up 0.4% and the NASDAQ up 0.5%. I got into several top IBD "top 10" stocks this week, and the only one that ended the week up after I bought it was Neutral Tandem (TNDM). There are several of the top IBD stocks which have experienced pull backs this past week. One that is closest to its 10 week average is World Fuel Services (INT). When a growing stock tests and holds up at its 10 week average (chart arrow), this is a sign of strength that the stock may follow through with a breakout. So I will consider getting into this one this week, as the fundamental data for this one is pretty good. And if FUQI drops back in the $15-$16 range... I may jump back into that one as well. It's #1 on the IBD 100 list this week (6/12).

So that's all I know this week. I'm still relatively clueless, but I am enjoying learning some new analysis techniques.

Sunday, June 7, 2009

Investor's Business Daily 100

I have been catching up on some long-needed investment analysis these last few weeks. After reading William O'Neill's "The Successful Investor" I have since subscribed to a 4 week trial of the paper he founded, "Investor Business Daily", and have been studying that along with the numerous resources on their website at I've also purchased and am reading his newest, and 4th edition, of "How to Make Money in Stocks". Someday I might write more about what I am learning, but right now, I'm just going to talk about a few data points I've seen.

First of all, several of the stocks I've purchased in the last few weeks, based on finding something positive about them on IBD, have done OK since I've bought them. Green Mountain Coffee Roasters (GMCR) and Tessera Technologies Inc (TSRA) have particularly done well, wheras I've got one loser in A-Power Energy Generation Systems (APWR). Here are the results thus far as compared to the DJIA over the same period through end of day June 5.
Bought Symbol Days Held Change DJIA
27-May ASIA 8 3.99% 3.42%
27-May TSRA 8 22.74% 3.42%
28-May VRX 7 1.70% 5.58%
29-May GMCR 6 9.42% 4.28%
3-Jun APWR 3 -7.32% 0.25%
5-Jun FUQI 1 4.04% 0.15%

So I've got 2, maybe 3 winners, and 1 loser. That's not bad... and yes I know this is a small data point over a short period of time.

So as I start this new week, I decided to try to pick some other choice IBD stocks to take positions in. To do this I was looking at the Investor's Business Daily (IBD) weekly papers from 5/29 and 6/5... I downloaded from their website a spreadsheet of the 6/5 IBD 100... then I went back and added in some data from the 5/29 week just to see if the list has any merit. Note that last week, the Dow went up 3.1% and the NASDAQ 4.2%... so even a monkee could have done well picking stocks last week.

As it turned out, 17 out of the top 20 (from 5/29) were positive for the week (6/1 - 6/5). Thirteen out of 20 beat the NASDAQ's 4.2%. Eleven of the top 12 did. The average gain of the Top 10 was 8.5%, more than double that of the NASDAQ.

I highlighted in yellow the stocks I'm going to keep an eye on. And there were two that I plan on buying this week, shown in green. Newmarket Corp (NEU) and (CTRP). Both moved up in position in the IBD 100 rankings, and had nice gains for the week. Both exhibit that there is a lot of institutional investors (ie mutual funds) accumulating positions.

So let's see how well I do.