Stock Market Day-Trading Discussion Thread

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[quote author="jefa" date=1226286235][quote author="blackvault_cm" date=1226235073][quote author="jefa" date=1226198536]I'm thinking of gambling on ford or general motors. Because I think they will announce a bail out plan, and the stock will skyrocket on the rumor, and I'll sell. Then if no one bails them out, I'm already out.



That's about as savvy as I get.



Of course, they could also declare bankruptcy (even more likely) and I'm totally screwed. So I'm not going to bet a lot. Just a little side money that I can then put in my kids college account if it does well.</blockquote>


GM and Ford are horrible companies. You are right in a way as in it will go up if a bailout happens, however not skyrocket rather a 10-15% increase. This isn't the first time government has given them money, and yet they are still doing bad. Consumer spending has slowed down and will continue to do so and these garbage companies will continue to stay garbage. All the bailout will do is prolong their death.



If you think Ford will go from 2 a share to 8, you are mistaken. If you think it will go from 2 to 3, then maybe. However thats a 33% increase and there are HUNDREDS of companies right now that can easily rebound 33% without the added risk.</blockquote>


See, I'm no good at gambling. If I was going to buy a stock just because I like it, I'd buy Amazon and Costco. You guys think I should buy into those for my sons college fund? Or just keep the money in a cd? My son is three.</blockquote>


Jefa, it's not my style to recommend stock picks to friends, and I'm far less likely to recommend any stock to a stranger over the internet. (In fact, I have a rule. If I'm so excited about a stock that I end up mentioning a trade to a friend, then I have to sell it. It's an internal metric I use to tell myself that I have gotten greedy and that it's time to move on.) With that out of the way, I still think I can give you some helpful advice.



First of all, let's reframe your choices here. Keep money in a CD or other interest bearing account, or put money into the stock market.



I can't accurately predict what future interest rates will look like, nor when they will get to those unknowable levels. But I can say that it is difficult to find CDs today that return a rate greater than the true inflation rate. (as opposed to the government reported numbers) I can also tell you that for the past few decades, the cost of college has grown faster than the (true) rate of inflation. While I don't know how much you have in CDs for your son's education, I do feel comfortable saying that unless the amount in CDs is greater than the cost of his schooling today, when the time comes you will have to rely on additional methods to pay for that education. ( Athletic or academic scholarships, loans, grants, additional funding)



If you want to minimize the need for additional funding, historically the stock market has been an excellent vehicle. And given the fact that you have a 15 year timeframe, the current market turmoil will be a thing of the past by the time your son needs the money.



While I won't recommend any particular stock, I will recommend a book - <a href="http://www.amazon.com/Intelligent-Investor-Definitive-Investing-Practical/dp/0060555661/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1226269789&sr=8-1">The Intelligent Investor by Benjamin Graham</a>. Benjamin Graham was the father of value investing and taught Warren Buffett his methods. The recent turmoil in the markets is creating incredible opportunities. It's not hard to find profitable companies with no debt and with cash on the books that exceeds their market caps. Simply put, in the long run this is a formula for outstanding returns.



Arm yourself with knowledge, then find stocks that make sense on a fundamental basis.
 
[quote author="WINEX" date=1226298763]Jefa, it's not my style to recommend stock picks to friends, and I'm far less likely to recommend any stock to a stranger over the internet. (In fact, I have a rule. If I'm so excited about a stock that I end up mentioning a trade to a friend, then I have to sell it. It's an internal metric I use to tell myself that I have gotten greedy and that it's time to move on.) With that out of the way, I still think I can give you some helpful advice.



First of all, let's reframe your choices here. Keep money in a CD or other interest bearing account, or put money into the stock market.



I can't accurately predict what future interest rates will look like, nor when they will get to those unknowable levels. But I can say that it is difficult to find CDs today that return a rate greater than the true inflation rate. (as opposed to the government reported numbers) I can also tell you that for the past few decades, the cost of college has grown faster than the (true) rate of inflation. While I don't know how much you have in CDs for your son's education, I do feel comfortable saying that unless the amount in CDs is greater than the cost of his schooling today, when the time comes you will have to rely on additional methods to pay for that education. ( Athletic or academic scholarships, loans, grants, additional funding)



If you want to minimize the need for additional funding, historically the stock market has been an excellent vehicle. And given the fact that you have a 15 year timeframe, the current market turmoil will be a thing of the past by the time your son needs the money.



While I won't recommend any particular stock, I will recommend a book - <a href="http://www.amazon.com/Intelligent-Investor-Definitive-Investing-Practical/dp/0060555661/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1226269789&sr=8-1">The Intelligent Investor by Benjamin Graham</a>. Benjamin Graham was the father of value investing and taught Warren Buffett his methods. The recent turmoil in the markets is creating incredible opportunities. It's not hard to find profitable companies with no debt and with cash on the books that exceeds their market caps. Simply put, in the long run this is a formula for outstanding returns.



Arm yourself with knowledge, then find stocks that make sense on a fundamental basis.</blockquote>


This is sound advice. It is important to do your own research. The one of two things I agree with Cramer on, is to do your own research. You can search companies' <a href="http://sec.gov/edgar/searchedgar/companysearch.html">filings here</a>, and if you are willing to invest in individual stocks, then it is required that you take the time to read the 10-Qs and 10-Ks of those companies.



As shocking as it may be, I also recommend the book WINEX recommends. It is a good book, and he is right, if you arm yourself with the knowledge you will find stocks that make sense on a fundamental basis that in the long run that should provide for outstanding returns. Once I feel that the volatility has subsided, I will be taking a similar approach, and if I have the time I will be buying the same stocks in my Panda challenge account. I also recommend the book <a href="http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338/">A Random Walk Down Wall St</a>. I could also pepper you with numerous academic papers on finance that will help you veer away from the herd, as we all know the herd is bad.



The one thing WINEX and I can agree on is doing research on the stocks you are looking at. Take it for what it is worth. Two guys with opposite opinions on almost everything, but can come together on one simple fundamental. If that doesn't say something, then nothing will.
 
I would like to add that Asia is up like crazy on the Chinese stimulus package. Also, futures are showing an up day for US. Personally, I think the emotion of the Chinese stimulus package will wane, and I may set up a short/put position on China just because we all know how well that worked for US.
 
[quote author="graphrix" date=1226335757]I would like to add that Asia is up like crazy on the Chinese stimulus package. Also, futures are showing an up day for US. Personally, I think the emotion of the Chinese stimulus package will wane, and I may set up a short/put position on China just because we all know how well that worked for US.</blockquote>
Word up, I swear the market is grasping at straws to try to rally to bring some new suckers into long positions.
 
[quote author="usctrojanman29" date=1226336464][quote author="graphrix" date=1226335757]I would like to add that Asia is up like crazy on the Chinese stimulus package. Also, futures are showing an up day for US. Personally, I think the emotion of the Chinese stimulus package will wane, and I may set up a short/put position on China just because we all know how well that worked for US.</blockquote>
Word up, I swear the market is grasping at straws to try to rally to bring some new suckers into long positions.</blockquote>


Such is the nature of bear markets. But that shouldn't impact any buying strategies for long term holdings. There is still plenty of time to take advantage of opportunities that are presenting themselves.
 
[quote author="graphrix" date=1226335757]I would like to add that Asia is up like crazy on the Chinese stimulus package. Also, futures are showing an up day for US. Personally, I think the emotion of the Chinese stimulus package will wane, and I may set up a short/put position on China just because we all know how well that worked for US.</blockquote>
Of course, there is no telling exactly what effect the Chinese stimulus will have on the Chinese economy, but I do not think I would take my example from the US. The US is either borrowing or monetizing debt to finance. China has the money to spend. They have $2 trillion in foreign currency reserves.
 
Things aren't holding up very well today...the 1-month treasury bill yield declined from .14% to .11% and the 3-month treasury bill yield declined from .35% to .28% in the past 2 hours. Oil has dropped from about $65 to under $61 over that same period while the down was up over 200 and now is up 50. Could this rally be running out of steam already???
 
[quote author="WINEX" date=1226240452][quote author="blackvault_cm" date=1226240084][quote author="WINEX" date=1226237104][quote author="blackvault_cm" date=1226234538]First I can't believe you guys are actually considering trading penny stocks...

Whats worse...is some actually doing research on them.

Socalmd is on the money... You think a stock can't go below a penny? Try .000001



You would have more success spinning a wheel and buying a random stocks call option or put option.</blockquote>


Just for the sake of clarity, I did look at their 10k. But it was morbid curiosity, not out of consideration of an investment. Though it is a garbage stock, I was curios to see what SoCalMD had $50k invested in.



I've never invested in a penny stock. But if I had put $200k into a dog like that and watched it go down to $50k, I certainly wouldn't talk about it in a forum.</blockquote>


K I see what you are saying. I didn't know about the 5M shares...wow...you can't even get rid of it fast...liquidity is horrid. What posseses someone to have 50K in a penny stock?</blockquote>


Other than the horrid financials, and other than the fact that they don't have a working product and no cash to develop a product and the fact that the macro environment makes raising cash impossible here is the fact you just mentioned. If an average position for someone consists of a couple hundred bucks, then they might be able to play with pennies. But the liquidity makes it impossible to accumulate or get rid of any real position in a hurry. According to Yahoo, the average volume on this stock is 202k shares a day. SoCalMD is holding 25 days worth of volume. Getting rid of that is going to get him killed.



All in all, going to Vegas and placing $50k on red is a much better way to blow that money.



Or better yet, why not just give it ($50k, not the junk stock) to charity? Not only would it be a tax write off, but you can feel good about it afterwards.</blockquote>


Thanks for researching and posting the info up.

Those numbers don?t look good.

He mentioned a reverse merger, what?s that and how will it help this company?
 
[quote author="tenmagnet" date=1226367793][quote author="WINEX" date=1226240452][quote author="blackvault_cm" date=1226240084][quote author="WINEX" date=1226237104][quote author="blackvault_cm" date=1226234538]First I can't believe you guys are actually considering trading penny stocks...

Whats worse...is some actually doing research on them.

Socalmd is on the money... You think a stock can't go below a penny? Try .000001



You would have more success spinning a wheel and buying a random stocks call option or put option.</blockquote>


Just for the sake of clarity, I did look at their 10k. But it was morbid curiosity, not out of consideration of an investment. Though it is a garbage stock, I was curios to see what SoCalMD had $50k invested in.



I've never invested in a penny stock. But if I had put $200k into a dog like that and watched it go down to $50k, I certainly wouldn't talk about it in a forum.</blockquote>


K I see what you are saying. I didn't know about the 5M shares...wow...you can't even get rid of it fast...liquidity is horrid. What posseses someone to have 50K in a penny stock?</blockquote>


Other than the horrid financials, and other than the fact that they don't have a working product and no cash to develop a product and the fact that the macro environment makes raising cash impossible here is the fact you just mentioned. If an average position for someone consists of a couple hundred bucks, then they might be able to play with pennies. But the liquidity makes it impossible to accumulate or get rid of any real position in a hurry. According to Yahoo, the average volume on this stock is 202k shares a day. SoCalMD is holding 25 days worth of volume. Getting rid of that is going to get him killed.



All in all, going to Vegas and placing $50k on red is a much better way to blow that money.



Or better yet, why not just give it ($50k, not the junk stock) to charity? Not only would it be a tax write off, but you can feel good about it afterwards.</blockquote>


Thanks for researching and posting the info up.

Those numbers don?t look good.

He mentioned a reverse merger, what?s that and how will it help this company?</blockquote>


Not sure what a reverse merger is, maybe he meant reverse stock-split? A reverse stock-split will help the company now being listed on the regular exchange which can raise capital. However, I believe you need the stock to be atleast at 0.50 cents a share before you can do reverse stock-split. They are ways away.
 
[quote author="blackvault_cm" date=1226368058]

Not sure what a reverse merger is, maybe he meant reverse stock-split? A reverse stock-split will help the company now being listed on the regular exchange which can raise capital. However, I believe you need the stock to be atleast at 0.50 cents a share before you can do reverse stock-split. They are ways away.</blockquote>


You?re right, think he mean?t reverse stock-split.

Misunderstood what he said.

Thought he was referring to one company got rolled up into another using a reverse merger.

Thanks for breaking it down
 
[quote author="tenmagnet" date=1226367793][quote author="WINEX" date=1226240452][quote author="blackvault_cm" date=1226240084][quote author="WINEX" date=1226237104][quote author="blackvault_cm" date=1226234538]First I can't believe you guys are actually considering trading penny stocks...

Whats worse...is some actually doing research on them.

Socalmd is on the money... You think a stock can't go below a penny? Try .000001



You would have more success spinning a wheel and buying a random stocks call option or put option.</blockquote>


Just for the sake of clarity, I did look at their 10k. But it was morbid curiosity, not out of consideration of an investment. Though it is a garbage stock, I was curios to see what SoCalMD had $50k invested in.



I've never invested in a penny stock. But if I had put $200k into a dog like that and watched it go down to $50k, I certainly wouldn't talk about it in a forum.</blockquote>


K I see what you are saying. I didn't know about the 5M shares...wow...you can't even get rid of it fast...liquidity is horrid. What posseses someone to have 50K in a penny stock?</blockquote>


Other than the horrid financials, and other than the fact that they don't have a working product and no cash to develop a product and the fact that the macro environment makes raising cash impossible here is the fact you just mentioned. If an average position for someone consists of a couple hundred bucks, then they might be able to play with pennies. But the liquidity makes it impossible to accumulate or get rid of any real position in a hurry. According to Yahoo, the average volume on this stock is 202k shares a day. SoCalMD is holding 25 days worth of volume. Getting rid of that is going to get him killed.



All in all, going to Vegas and placing $50k on red is a much better way to blow that money.



Or better yet, why not just give it ($50k, not the junk stock) to charity? Not only would it be a tax write off, but you can feel good about it afterwards.</blockquote>


Thanks for researching and posting the info up.

Those numbers don?t look good.

He mentioned a reverse merger, what?s that and how will it help this company?</blockquote>


Since Sarbanes Oxley, it's a lot more difficult (and expensive) for a company to get listed on a publicly traded stock exchange. One of the cheaper methods is to acquire a dormant corporation that has already filed with the SEC, then start doing business as that entity. One of the more high-profile companies that took that approach was Jamba Juice (JMBA). If I'm not mistaken, I believe American Apparel did the same thing.
 
[quote author="skek" date=1226369895]I don't know anything about the company that's being discussed, so this is just a general answer.



A reverse merger into a public shell is where a private company merges with and into a publicly traded company that has been scrubbed of all assets and liabilities (usually post-BK). Following the merger, the public shell takes on the assets and liabilities (and name) of the private company, but remains public. It then files its 10-K and 10-Qs and is a public, reporting company for all intents and purposes.



The theoretical benefit is to avoid the cost and expense (including underwriter and SEC scrutiny) of an IPO. The company doesn't raise any funds in the "going public" transaction, although they can do add-on secondary offerings and sometimes a private investment occurs simultaneously with the reverse merger. Post-merger, the shareholders can sell into the market and get liquidity for their personal holdings.



In my experience, reverse mergers into public company shells are a way for companies that have no business being public to be public without the cost, expense and market validation of an IPO. But in this day of high Sarbanes Oxley compliance costs, one has to ask themselves why a small company deems it to be in their best interests to be publicly traded. Seems like a waste of shareholder resources to me.



The private equity markets are as big as the public markets. If a company has merit, it can get funded through the normal PE channels. In my opinion, some reasons a company reverse merges into a private shell is (1) founder vanity, or (2) in anticipation of a pump and dump. Some companies with unsophisticated management get suckered into it by consultants who specialize in these transactions and believe that it will open up the capital markets. I will not touch, repeat, <strong>I will not touch</strong> a company that has reverse merged into a public shell.



My personal, non-professional opinion.</blockquote>


Skek, you hit the nail on the head on all counts. I believe that is what SoCalMD described. <a href="http://biz.yahoo.com/iw/080428/0390931.html">Here is the newswire on the Smart Wear/GLGT situation.</a>
 
<blockquote>Skek, you hit the nail on the head on all counts. I believe that is what SoCalMD described. <a href="http://biz.yahoo.com/iw/080428/0390931.html">Here is the newswire on the Smart Wear/GLGT situation.</a></blockquote>


Didn't the merger fall apart? omg...I can't believe I'm still wasting my time discussing this garbage stock...
 
[quote author="blackvault_cm" date=1226366401]Longs can always hope usctrojan...



<img src="http://images.despair.com/products/demotivators/hope.jpg" alt="" /></blockquote>
Just like the housing longs, huh? haha Hope can be the death of people (that's what handed me my ass during the tech bubble days).
 
[quote author="usctrojanman29" date=1226364337]Things aren't holding up very well today...the 1-month treasury bill yield declined from .14% to .11% and the 3-month treasury bill yield declined from .35% to .28% in the past 2 hours. Oil has dropped from about $65 to under $61 over that same period while the down was up over 200 and now is up 50. Could this rally be running out of steam already???</blockquote>
Check that...the 1-month bill is @.08% now and the 3-month bill is @ .24%. Looks like people are running for the hills.
 
[quote author="usctrojanman29" date=1226373920][quote author="usctrojanman29" date=1226364337]Things aren't holding up very well today...the 1-month treasury bill yield declined from .14% to .11% and the 3-month treasury bill yield declined from .35% to .28% in the past 2 hours. Oil has dropped from about $65 to under $61 over that same period while the down was up over 200 and now is up 50. Could this rally be running out of steam already???</blockquote>
Check that...the 1-month bill is @.08% now and the 3-month bill is @ .24%. Looks like people are running for the hills.</blockquote>


Good stuff. As far as your housing comment earlier...it's already ugly...10% unemployment next by next year and collapse in consumer spending CAN'T be good for home prices...



On stocks, I'm hoping for a big selloff at the end of today or a real bloodshed tomorrow.
 
Oh yeah...almost forgot. WMT is reporting Nov 13. There is no better consumer spending gauge than WMT imo...should be an interesting day.



Also, MSFT reporting tomorrow and TGT reporting Nov 17.
 
[quote author="usctrojanman29" date=1226373790]

Just like the housing longs, huh? haha Hope can be the death of people (that's what handed me my ass during the tech bubble days).</blockquote>




It?s all about getting off the canvas and getting back in the fight.

Look at my man Joe Calzaghe, got dropped by Roy Jones Jr. in the first got up and continued the rest of the fight.

Ended up winning the fight by unanimous decision.
 
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