Posts Tagged ‘free stock advice’

The Credit Crisis and Potential Shorts

By: ispeculatornew | Date posted: 03.19.2008 (10:34 pm)

Financial companies have seen severe declines over the past year and they still have the potential to go down a lot further. The reason financial companies are on such shaky ground is because the risk of rising foreclosures and loan defaults has resulted in a really severe credit crisis. For those of you who don’t understand the current credit fiasco I will try to explain it and show why financial companies still present good shorting opportunities.

Before I start I want to point out that the stock market surged on the Fed cut just like I predicted and also sold off quickly just like I predicted. If you bought financials yesterday I hope you sold the news and got out quickly. If you did play the short term volatility I would recommend that you take new short positions in financials again. Now I’ll go back to the credit fiasco.

The last time the Fed tried to fight off a recession Alan Greenspan, who deserves some blame for the current credit mess, lowered interest rates to ridiculously low levels. Consequently, there was plenty of easy money to go around. Since interest rates were at extremely low levels banks were happy to provide consumers with just about any type of loan they wanted without much regard to the credit worthiness of the consumer. (more…)

BAC Cover Recommendation

By: ispeculatornew | Date posted: 03.17.2008 (8:40 pm)

BAC – Bank of America (NYSE) – (Closing Price – $35.96) 

Bank of America is down moderately since my initial short recommendation and I think now would be a good time to cover and take the gain off the table. I still think financial companies are going to see further weakness but they will most likely rally tomorrow when the Fed cuts interest rates. If the Fed cuts by a point, which I have a feeling is going to happen, financials could get a significant short term boost. Instead of holding through the volatility I think it would be wise just to cover.

If you shorted Bank of America when I gave my recommendation you are sitting on a 9.5% gain in just a couple of weeks. That is not an insignificant gain considering the short amount of time it took to obtain it. You could have made an even better gain shorting other financial companies when I gave my recommendation. If you shorted Bear Sterns (BSC) you would be sitting on a huge gain.

If you are a very short term trader and like to trade in and out of stocks it may be wise to consider buying financial stocks tomorrow, especially if the Fed cuts by a point. If financials rally tomorrow I would trade the news but get out quickly.

Disclaimer: I have no position in BAC, BSC, or any other financial company.

Greed, Fear, and Greater Fools

By: ispeculatornew | Date posted: 03.06.2008 (10:09 pm)

COIN – Converted Organics (Nasdaq) – (Closing Price – $16.59) 

I have referred to “greater fools” and the term “hope a dope” a couple of times and the company Converted Organics (COIN) is a perfect example of what I was talking about.

I came across Converted Organics on a day trading stock blog a few weeks ago and I have been following the stock out of curiosity. The stock price of Converted Organics has risen from around two dollars to the current price of $16.59 in the past half year. I am not sure what initially caused the stock price to surge but the stock price has continued to go up on sheer speculation.

Essentially people are buying the stock and hoping other fools will continue to buy the stock and send the share price up. The only thing Converted Organics has going for it is the company has an extremely low float (number of tradable shares). That is the major reason speculators have been able to manipulate the share price up. (more…)

Good Time to Short Financial Stocks: My Pick BAC

By: ispeculatornew | Date posted: 03.02.2008 (3:41 pm)

BAC – Bank of America (NYSE) – (Closing Price of Friday 2/29/08 – $39.74)

Financials have been one of the worst performing stock sectors over the last few months and I think the weakness in the sector is going to continue. The housing market is no where close to finding a bottom, the economy and job growth are slowing, and gasoline prices are projected to hit all time highs this summer. All of these things are going to bode ill for financial companies in the form of increasing foreclosures and overdue credit card and loan payments. Consequently, I think it is a good time to short financial companies.

Financial companies rallied earlier this year when the Federal Reserve caved into Wall Street demands and drastically cut interest rates by 1.25 points. However, the rally didn’t last long and the share prices of financial companies are once again dropping quickly. I think you can take your pick of which financial company to short but I am going to give a recommendation to short Bank of America. (more…)

New Stock Pick: 8×8 Inc. (EGHT)

By: ispeculatornew | Date posted: 01.27.2008 (1:33 pm)

EGHT – 8×8 Inc. (Nasdaq) – (Closing Price on Friday 1/25/08 – $1.20) 

8×8 Inc. is a company I have been following for a few quarters and I think now is an opportune time to buy some shares.

8×8 Inc. is a VoIP company that enables broadband internet users to add digital voice and video communications to their high speed internet connections. The company also offers a hosted communications solution, Packet8 Virtual Office, which delivers digital voice services coupled with powerful features for small and medium sized businesses and call centers.

The amount of companies subscribing to Packet8 Virtual Office has been quickly growing over the past year. On January 8 of 2007, 8×8 Inc. reported over 6,000 companies subscribed to Packet8 Virtual Office and earlier this year 8×8 Inc. reported over 10,000 companies were using Packet8 Virtual Office.

8×8 Inc. also got an influx of residential customers last year when a couple of other VoIP companies (SunRocket and an unnamed company) went out of business and referred their customers to 8×8 Inc. (more…)

Is There Any Money in Internet Search Stocks?

By: ispeculatornew | Date posted: 12.31.2007 (4:45 pm)

One of the first stocks I owned was Ask Jeeves (bought out by IACI – formerly ASKJ) which I bought after the tech bubble collapsed. It was trading at a little over a dollar and the company was quickly growing revenues and earnings. I sold the stock too early but I still made over ten times my money in that stock, a ten bagger in Lynch speak.

Ever since then I have followed the internet search sector to see if another small player could follow a similar path as Ask Jeeves. I’ve followed the second tier search companies for a couple of years and frankly I don’t think there is any money to be made investing in these companies (from a fundamental perspective).

The smaller companies like Looksmart (LOOK), Copernic (CNIC – formerly MAMA), Miva (MIVA – formerly FWHT), and (LOCM) are nowhere close to making a consistent profit. If you have ever used their websites you know why. They simply don’t deliver relevant search results. (more…)

CAAS Plans to Acquire 36.5% of Henglong Automotive Parts Company

By: ispeculatornew | Date posted: 12.26.2007 (5:44 pm)

CAAS – China Automotive Systems (Nasdaq) – (Closing Price – $8.28)

China Automotive Systems announced that it has started discussions with Hubei Wanlong Investment Co. to acquire an additional 36.5% of Henglong Automotive Parts Company.

China Automotive Systems currently owns 44.5% of Henglong Automotive Parts Company. In 2006 Henglong posted sales of USD$54.54 million, representing 57% of China Automotive Systems’ total net sales and net profit of USD$9.75 million, while CAAS’ net profit was USD$4.81 million. Acquiring a bigger portion of Henglong will obviously be beneficial.

I don’t see any reason to sell China Automotive Systems and I would continue to hold your shares. According to Yahoo Finance the insider sells that were weighing on the stock price have stopped and there was even an insider buy on Dec. 3. (more…)

Timothy Sykes Stock Blog

By: ispeculatornew | Date posted: 12.26.2007 (4:45 pm)

If you base most of your stock making decisions on technical analysis you should check out the stock blog of Timothy Sykes. He provides his personal trading decisions along with trading advice.

He is also the author of An American Hedge Fund which details the wild ride of the hedge fund he started. It has many good reviews so it should be worth a look.

Want a Risk Free 14% Return?

By: ispeculatornew | Date posted: 12.21.2007 (3:19 pm)

DVW – Covad Communications (Amex) – (Closing Price – 0.88) 

Every investor would like to make risk free investments, but risk and return have a direct relationship. Investments with the least risk usually have the least amount of return and vice versa.

However, right now you can get a fourteen percent return without much risk.

Covad Communications (DVW) announced on October 28 that it is being acquired by Platinum Equity for $1.02 a share. However, since the announcement Covad shares have traded as low as $0.77 and they are currently trading at $0.88.

If you buy at today’s closing price you are looking at a 14% return when the acquisition closes. (more…)

Technical Analysis

By: ispeculatornew | Date posted: 12.12.2007 (3:34 pm)

I use a little technical analysis (TA) in my investment decisions but for the most part I think technical analysis is a bunch of nonsense. However, I think becoming familiar with TA can make you a better investor.

Technical analysis is the strategy of reading price charts to evaluate whether a stock is a good investment/trade. Technical analysis is in contrast to fundamental analysis which is the strategy of studying a company’s fundamentals (revenues, earnings, etc.) to determine potential investments.

A lot of traders who hold stocks for a very short period of time (day traders, swing traders, momentum players) use TA as their primary evaluation method for buying or selling stocks. However, trying to consistently predict the price movement of a stock over a short period of time is very difficult, if not impossible. In fact I’ve read an article stating that most day traders lose all of their capital within a year. (more…)