I love writing on this blog and over the time what I’ve been writing about has changed significantly but one thing has remained. Mondays are my favorite day because I’m usually able to open a new long & short tech trade. I started last weekend with that exact intention once I saw I’d have a free spot. Unfortunately, as sometimes happens, I didn’t find a trade that I felt good about. A few years ago, I would have forced myself to find one but I’ve learned the hard way that those usually don’t work out. Just as a reminder, when looking for possible trades, I do the following:

-start with the list of tech stocks that I follow
-remove stocks that I currently have positions on
-take out stocks that are reporting earnings in the next few days (as we enter the earnings period, that takes out quite a few)
-remove stocks that I don’t have a good feeling about and would rather not trade (most China-based stocks, Blackberry, Groupon, Twitter, etc)
-stocks that I do not have a good enough sense of in terms of valuation

Once I did that, I ended up with 5 stocks! I usually get 12-15 or so from which I look for pairs. This time, I did seriously consider one move but ended up not pulling the trigger. I hesitated discussing it here because if it turns out well, I’ll probably regret not going ahead but…. 🙂 The one trade that I seriously considered was:

-Long OpenTable (OPEN) & Short Yelp (YELP)

Pros:
-While both names trade at extremely high P/E ratios, YELP is at a much higher one despite not being profitable
-In terms of sales/revenues per share, OPEN’s ratio is much more favorable
-YELP faces much more competition in the local space

Cons:
-Yelp continues to be a potential takeover target which would spell disaster as a short position
-I was not impressed by what I heard out of OPEN`s most recent earnings call
-YELP does have stronger revenues growth

YELP Revenue (Quarterly YoY Growth) data by YCharts

So while it did look like the most attractive trade, the potential gain/loss was not good enough for me at this point.

Current Trades

As of the time I wrote this, I do have 7 live trades but I will be closing one. Last week was a rather good one for me with my long & short trades, thanks in big part to Travelzoo (TZOO) which announced extremely disappointing numbers on Thursday with earnings of $0.31 (est $0.36) and revenues that actually declined by 5% y/y.

LNKD data by YCharts

Otherwise, not much is happening, but with an average return by trade over 8% so far this year, I certainly can`t complain! As always, you can see my live trades here:

http://www.intelligentspeculator.net/livetrades

That’s all for me, wishing all of you a great start to this week:)