My Take On Visa Inc (V) aka Baseball Card Collecting In The 1990s

No matter how many times I say stick to trades with ideal risk-reward ratios for the smaller investor—those being media-hype plays and pumps and dumps courtesy of your friendly local stock promoter, the questions about random real companies keep streaming in—none moreso than Visa (V). The emails came from far and wide and helped inspire the thesis of THIS AOL article I wrote about the company the morning before its IPO. Yup, I was dead right. So how did I know it’d follow a VMware (VMW)-type trajectory; because simple theories work best.

Think about it, everybody and their other mother is comfortable with the strategy of buy what you know, buy blue-chip companies—blehhhhhhh! The absurd popularity of that strategy makes me gag because while it’s worked well in the past, it’s sooooo old news now. I’ll use the example highlighted in my book An American Hedge Fund by comparing this strategy to baseball card collecting—everybody growing up in the 1980s and 1990s who collected those stupid little pieces of cardboard dreamed of their values soaring into the thousands of dollars, just like those cards from back in the 1950s and 1960s.

Unfortunately, the card companies took advantage of this great track record and us suckers, producing those cards en mass and us kids—ignorant to the laws of supply and demand—bought them en mass, only too happy to pack them away and wait to collect our inevitable rewards.

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What My Friends In Town, Upcoming University Speech And Website Launch Mean To You

I can’t even imagine how Arrington copes. Right now I’m blogging, researching potential trades, executing trades working on the new site and answering on average 300+ emails/day (no matter that I’ve repeatedly asked you guys to ask questions HERE) and I still can’t keep up. I think I’ve spoiled you; nay, I know I have. So for the next week or so, you’re gonna have to deal with my crazy schedule, friends, university speeches (University of Minnesota whaaaaaat!) and the launching of THIS new site on May 1st because I’m gonna be overwhelmed. My apologies in advance.

The good news is that once the new site is up and running smoothly, probly in the next month or so, and all the lazy people inevitably choose summer fun over hardcore learning and research, everything will be back to normal—nay, better than normal cuz the new site has a lot of features to make this more understandable to beginners—so celebrate!

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The Old Morning Drop Following The First Down Day After A Big Runup Trick

Going into today’s session with my overnight short of PDO, I was confident, if not ecstatic because I’d shorted into the first negative day of a decent-sized runup, even if it was KOG-like commodity play. At the market open, volume was very very light—5,000 shares in 10 minutes and yet when sellers took out the one bid at $6.20 that took it all the way down to $6.01…I didn’t want to cover right away as I thought it’d take out $6 and then stop loss selling might cause some panic, but bids piled up at $6.02, then $6.03, then $6.05…screw that, I covered at the ask at $6.15, making $27 after commissions.

Afterwards, some more sellers did come in and on total daily volume of 25,000 shares, the stock was $5.90 x $6—so I left $100+ on the table…boooo hooo, due to the illiquidity and it not being an ideal play, I played it safe.

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Parabolic Stock Chart Of The Day: Unisource Energy Corp (UNS)

Overworked as I’ve become, I really appreciate it when you readers alert me to some solid opportunities. Today’s chart of the day comes courtesy of InvestorsLive (see MarketKid, that’s how you link when you feature someone else’s idea on your blog!)

Rather expensive, fundamentally sound, tied to commodity prices and slow moving for TIM to play, nonetheless, I consider all surging stocks as potential shorts…just gotta be extra careful on this one as its managed to take out 9-month resistance, then again, it has gone parabolic so we could see some conso0lidation soon…

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We Are The Three Amigos: 3 Natural Gas Plays & Some Other Banditos

(MXC) The fist of 3 spiking AMEX microcrap nattie gas amigos with under a dozen employees…you wanna talk about the worst companies out there, well, here you go, hardly any business at all…but that won’t stop them from spiking because nattie gas has been soaring and people loveeeee speculating on these POS…couldn’t find any shares to short, too bad…

(PDO) The 2nd of 3 amigos, recognize this chart pattern? I’m short 700 shares @$6.20 because it faded gradually into the market close yesterday and I’m looking for it to take out stop losses at $6, so I can cover in the $5.60-$5.80 area…it’s a small position because I truly hate these AMEX commodity plays, you remember how KOG went!

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Stop Shorting Penny Stocks Randomly, This Isn’t CNBC, I Want You To Profit!

I’m seeing a lot of comments/emails from people re-shorting these pump and dumps waaaay late in the game, just because they missed profiting from the initial dump. Here’s a tip—STOP!

Yes, these companies are all crap (okay, okay 99.9%, but this is the last time I’ll ever qualify that), but you gotta understand crap companies can and do rise faster than quality companies for several reasons:

a.) there’s no pesky actual businesses to get in the way of hyping / putting out fraudulent / exaggerated press releases so investors must only be convinced of the dream, not the execution of the dream, which is helpful considering the harsh reality / inevitable failure of these companies

b.) no pesky morals or ethics instilled in those who manage such companies / promote such stocks  

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Pirates Pretending To Be Pig Farmers (Seriously)

Wow and I thought I liked money—the pig f#@!ers over at Agfeed Industries (FEED) raised another $25mil just 7 days after their first $10 mil plundering financing. The short time span between blatant dilution financings tells us now it’s gonna get interesting, a.) we’re def. gonna see more pig farm acquisitions (no doubt at the typical 2-5x income), which given soaring commodity prices, investors are gonna like (good short-term, but dangerous long-term aka why can they get them so cheap?) and b.) whoever bought these shares is even more motivated to turn this into a Wall Street darling telling clients and paying off/bribing getting others to tell their clients “with the Olympics coming up and food prices soaring, this is how you invest in both trends” (BS generalization).

Other than scalping, the rise is too gradual to warrant any shorting and if done right, this could become a great pump and dump story stock, meaning the potential upside is enormous…so respect the pump, buy if it suits your personality, don’t short too soon and never ever believe the hype. When this thing dies down—and it will eventually die, as 995 out of 1,000 piece of poo companies do (seriously)—its chart will resemble similarly flawed fraudulent microcrap lover of acquisitions ZVUE.

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I Am Not A Crook I Just Play Penny Stocks Promoted By Them

It’s been 3 years since total piece of poo oil play MPET pulled off the quad-fecta, rising from $1 to $4…can it do it again?!?!?! Hopefully…but odds are obviously against it

BSIC wants in on that vertical price action too

Courtesy of Investorslive.com, I give you today’s manipulated stock chart of the day:

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If At First You Short A Pump And Dump And Succeed, Try, Try Again!

As I’ve posted HERE and HERE, EDEN was a great pump due to a 100% spike caused by a fluffy inaccurate article written by a major media outlet—my former employer—for a bit—TheStreet.com (they later corrected it, but the damage was already done). The first time I shorted at $2.55, impatiently/conservatively covering at $2.35 for a decent $180 profit. But given its tiny tiny tiny $6 million marketcap and annoying illiquidity, I don’t regret covering quickly…that much…cuz as I’ve shown on fellow microcap pump and dumpers PSTI, REED and SHZ, these suckers remain good shorts for many days.

So, when I re-shorted EDEN mid-day yesterday on a slight low volume bounce up from $2 to $2.20, I had every confidence in the world we’d see $2 again and then the question would be if there were stop losses there—as often happens at big fat round numbers. Despite some ever surprisingly determined buyers and a solidly bearish close at $2.04—caused by a 49,000 share sell order—I was even more confident of a big drop today.  

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