I just sold my FONR at $1.51 a share. Lost $2600 on the trade.

I am out.

I sold my FONR shares that I bought at 1.22, but still own the ones I bought at 1.81.

That trade seemed so obviously good when the PR's on sales were coming out every day. It has been a long time since a sale has been announced, though. Now it looks like a quagmire.

I am now convinced, no matter how good the story, buying story stocks is just a bad idea. There are a couple of ideas that have consistently worked for me:

1. Selling covered calls that pay a decent percentage, on solid companies.

2. Buying debt free, cash rich companies beaten down after panic selling.

3. Buying companies that are starting to move up from lows on huge volume.

Most of my losing trades did not fit these simple ideas, while most of my winners have. My troubles have come when I try to get slick, and violate my own rules.

Do you have any simple time tested trading rules?

1. What does a company do?

2. Does the company have at least $25 million in sales, but like to see at least $100 million in sales.

3. How profitable is the company? Return on equity and Return on Assets.

4. What is the cash flow? Net cash from operations.

What is the debt? Something you always look at and is very important. Leverage is not always bad. For example most of us buy our home by borrowing money and in CA it has been one of our best investments. The same applies to Corp.'s and you just have to make sure they are borrowing for the right reasons and they have plenty of cash flow to pay off the debt.

5. Price to Earnings/PE. Need to see growth on earnings of at least 15%-20% per year if you are buying growth stocks.

6. Lawsuits and other recent negative news.

7. What kind of premiums is the stock getting for options. This of course is only for option players.

8. Volume is important and I dont't like to buy stocks that have less tham 250,000 shares traded a day, but perfer volume of at least 500,000.

Like you I don't always follow my rules, but I do most of the time.

There is obviously a great deal of merit to the rules you list, Ben. How do you determine yoru entry point, though? Say you have a stock that fits your criteria - when do you think it is a good buy, and when is it just too expensive or too high to think about getting into?

Hey Max, what do you think about SUNW's news today? What a pisser. It looks like I might be selling 4 call options for quite a while....

SUNW - I bought back my calls for .1 each, and doubled my position. Go Sun!

My entry point is usually just north of the culo or just south of the nariz.

Oh I see what you mean.

I do use Bollinger Band sometimes or look at the 50 and 10 day moving average, but if a stock meets my criteria, I sometimes buy even though it has broken out well above the Bollinger and moving averages.

Sorry for the late reply. I was in TJ having my wounds licked from the pounding I'm taking.

I think the news was confusing as people were comparing GAAP results with analysts Pro Forma results.

Market is overreacting.

I am glad to see you are optimistic about our stock.

I looked at buying Oct puts two weeks ago (late September, early October always kills me) but I did not pull the trigger.

SUNW

I don't know guys, I'm a computer pro and Sun workstations are just plain old disappearing. They're expensive and Linux is replacing Solaris as the Unix operating system of choice. Maybe in the short term, but in the long term SUN is a dog unless it reinvents itself.

If you like computer hardware, think about Dell. Everything new I see these days is a Dell product.

I'm sure there are some SPARC loyalists out there that will disagree.

Ldvee right again it seems.

I love DELL as it is my top holding, so I guess I am competing against myself. Not good.


I am told that big mouth Kramer on CNBC said to sell SUNW and that they had real problems and were a "terminal company"

All I know is I lost 25% of my ONE YEAR profits on all stocks in the last TEN days.
I need a big come back soon.

I just picked up some GLGC at 4.7. This is the kind of trade Ldvee should like.

As far as SUNW goes, I'm not looking for a while lot, just a bounce. I think the odds favor it reacting up a little from this recent pounding, which is why I bought back my 4 calls and doubled my position. If it moves up .35 or .4 I'll probably sell.

Sun is unfortunately in trouble and its debt was down graded this morning to one step above junk status.

GLGC is looking pretty good, and SUNW looks like it just might give me the bounce I want. I also just entered a covered call trade - bought AMCC at 5.19, and sold the Nov 5 calls for .55, for a 7.75 profit if assigned in Nov (less commissions).

I'm starting to get back into some more covered call writing, in addition to my bottom feeding trades. I currently think that the best strategy consists of looking for the cream of bottom feeding trades and the cream of covered call trades, to offer some balance of potential for high returns, as well as some downside protection and safety.

As with all of my opinions, this opinion is subject to constant future revision.

Everything is up today.

If you own a stock that is down today, you might want to rethink the position.

Hell, even Eastman Kodak and Surebeam are up today.

What do you think about the AMCC trade, Ben?

Not a bad trade for 48 days. I do think most of the bad news is behind the company and they should do better under this Republican led economic recovery.

My worst nightmare of a client, lost millions on this stock, as she would not sell the stock when it was over $90. I did get her to liquidate about a million dollars of it when her shares were worth 5-6 million.

I like it much better than your SUNW trade.

I like the AMCC trade better than my SUNW trade, too. I just wish that I could afford to lose millions of dollars on a stock.

BTW, I know Ben knows this, but by a "7.75 profit" in that previous post I meant "7.75 percent profit".

I also think Kramer is an asshole and a snake oil salesman. Many of his comments are too absurd even for him to believe, and are merely made for shock value. I hate people who do that.

SGDE at a new all time high today.

I SURE am glad I came up with that stock!!

Thanks Kendricks

I'm glad that SGDE is working out for you. That son of a bitch is up big today! Too bad I sold for a small profit.

Dr. Dilution is at it again with FONR, and announced today that FONR intends to sell another 5 million shares.

I should have dumped this stock the minute I found out that asshole was an evangelical christian. You just can't trust those motherfuckers.

I also violated my fundaqmentals and price action rules on FONR, but the story seemed so obviously good.

NO MORE FUCKING STORY STOCKS!!!

(Message edited by kendricks on October 06, 2003)

Yeah,

It is easy to start believing the "stories" and go away from your fundementals. I lost a net $5600 on trading FONR several different times.

I have been completely out of FONR for about a week.

Thanks again Kendricks

I have made over $3400 on SGDE IF I SOLD RIGHT NOW. I really like this company. Small cap value stocks have done well during the last six months.

I am going to go invest in some Sugar Pie (SP) this afternoon.

A nice late lunch at Los Arcos and then a five minute drive over to La Mansion for a jucuzzi and some Cialis (ICOS) induced sex.

I am also suppose to meet Barely Legal Pie (BLP)at 6:00 for some more research, but I may have to go over to Pollo Bar as I hear they have some new talent.

I made some money on the 4,000 FONR shares I bought at 1.22 and sold in the 1.50s. I lost more on the 6,000 shares I bought at 1.81 and sold at 1.45.

What a pisser, since it could have been a great trade if I had simply sold my shares I bought at 1.22 at 1.81, instead of adding more.

On the bright side, I am having a lot of fun on the FONR board.

"Small cap value stocks have done well during the last six months."

The best investment I have over the past 12 months is a T. Rowe Price small cap value fund (PRSVX) in my 401K, up 29%. I have 20K cash in that account with limited investment choices, I'm tempted to put more in that fund, but it's had quite a run already.

Maybe PRSCX??

Hmmmm

Ldvee,

Traditionally bull markets start with growth in small caps. Chasing performance can be dangerous.

Perhaps some money in large cap value or growth or some sector that has had less upward movement might be worth considering. Since January the S&P is up around 15% where as the NAZ (a lot of small caps) is up 40%.

I have plenty of large caps, blue chips. I might go for the science and technology sector.

I like the looks of this chart, as I said, my 401K options are limited.

http://finance.yahoo.com/q/bc?s=PRSCX&t=5y

Damn Kendricks,

You are funny. Your wife having an affair with the preacher is too much.

SGDE still going up!

I really like this stock. I can't believe I actually came up with this stock!

Benwhomakesallgoodideashisideas

LOL! I was wondering if any of you guys read that.

I have some guy trying to mentor me now, and other people expressing their condolences. What a fucking riot.

I wish I owned as many shares of SGDE as I did FONR...

Yo Tambien on the SGDE.

I just posted a response on FONR to your last post.

I will probably get flamed for being so mean.

Ha ha! Thanks for urging me to commit suicide! That was pretty funny. I posted a rambling angry incoherent response to it. This has gotten to be kind of like performance art. It's funny that people take it so serious.

*********************************************

This has been such an emotional week for me. I found out that my preacher has been carrying on affairs with several women in our congregation, including my wife. Now she is pissed at me for finding out and at the other women for making him cheat on her with them. It is all so stupid. How can he be cheating on her when she is married to me?

None of it makes any sense. Why would a merciful god allow this? Why would he make me just to torture me? What would the point be in some god making us just to punish us? EVERYTHING WE DO IS HIS FAULT FOR NOT MAKING US BETTER IN THE FIRST PLACE!

For someone who is supposed to be almighty, he really does suck. I mean, if he existed he would suck.

The we have guys like Damadian who claim to be christians, yet keep on diluting the value of the stock we bought from them. When does it end?

OMG

SGDE up over 10% today and closed at $17.35.

Lets see, I lost $5600 on Kendricks recommendation on FONR and I am up $5350 on SGDW.

Just entered a covered call trade with BCGI (sold the Nov 10s). Looks like a decent trade.

Good trade IMHO.

Company might be worth just buying and holding for a while. Has very good fundementals.

I was reading an article today about today from AP that was in the SD Union on how much margin money is back in the market. That is sometimes a sign of a market peak.

I agree that the market is tenuous right now. That is why I am shifting back toward covered call trades in solid companies. That seems to be a relatively safe way to earn a decent return while still protecting the bulk of your capital in case of a downturn.

Damn Kendricks,

SGDE as high as $18.46 today.

I owe you a BJ.

Man, I should have held that one. That was a graet pick. I bought another 1,000 shares of ASIA today, and sold the Nov 7.5 calls. That will be good for a 9% profit in five weeks and a day if assigned. I'm getting the bounce I wanted from SUNW, too! The question now is, when to get out...

I slosed out the SUNW trade. Doubling down at 3.31 turned out to be a good idea. I didn't do the math, but I think the whole trade turned out to be a wash or a small profit, including the covered call trade I made before the recent collapse. I was happy to get out of that one with my ass in one piece.

Didn't I tell you guys amzn 2 weeks ago? It went up steadily since. Up $10- or over 20%.

There were a coupla other trades I thought about letting you guys in the last few months but I remembered you guys were asses when I said I was leaving this thread. Of course those went up a lot too. You guys wanted to hear my opinion after I predicted the two huge rallies correctly.
I'll be back in the game sometime.

-Dick "the oracle" Johnson

I love to see these tech stocks going through another period of irrational exerburence eventhough my portfolio is very light on them. The whole market, including real companies that make products and profits, benefits from the positive sentiment that results.

I did put a chunk of my 401K into a science and technology fund recently however, the hired hand thought it was a good idea. Fits the "buy low" half of the equation.

I have 3,000 of GLE & of JDSU,
& 1,000 of VTSS & of DSCM.

When should I sell ?

My sell advice is pretty much useless, as I nearly always sell too early. Anyway, I would sell JDSU now, as it looks like it might bounce off resistance near its current levels. I would hold VTSS, as it looks like it is breaking out. If I was holding DSCM, I would look for it to pop near 9. Of course, I am also the guy who picked SGDE and then sold it for a small profit, while Ben is making millions off of it.

I did some bottom feeding this morning with FTUS and PSMT. It looks like PSMT has settled down, and is forming a saucer bottom. Let's hope so. FTUS has also hopefully put in its lows, and will bounce from here. I'm not lokoing to get rich off of either of these trades, I just want to catch a little bounce.

Not millions, but yes several thousand. Thanks again.

What company is GLE?

I closed out both of the trades I made this morning. FTUS jumped as expected, but PSMT continued to fall. Essentially a wash.

I fucking hate PSMT, and will never trade it again. It is a shitty stock with a ton of debt. I am an asshole for buying it, and will never ever buy it again, regardless of how fall it drops. If I had just jumped in FTUS like I should have, I would have a nice quick profit to show for my troubles today.

Man, I'm glad I cut my losses on that PSMT pos. It continued to drop like a rock after I got out.

Are you guys still holding FONR like me?

Abuelo

I sold mine - the shares I bought at 1.22 I sold for a profit, and the shares I bought at 1.81 I sold for a loss. If it dips back to the 1.20s area, I will probably buy back in. The most recent authorization of the sale of 5,000,000 additional shares really pissed me off, though.

Oops, I meant GLW (Corning)
My average buy price was about $4.50/share.

I picked up some AMSY this morning, and entered a covered call trade in USG. The USG Nov 15 calls are paying an excellent percentage now. I know Ben hates the stock, but it has been good to me. I also think AMSY is a good value play.