STOCK MARKET: Let's talk stocks and investing

Thanks for the heads up.

 

What they said for Jan too

 

Ron has had some spot on market calls in the past.

 

BTW Ron your words were echoed by Marc Faber on CNBC yesterday. He said he is looking for a sell off in March. If we don't get it then he is looking for a blow off rally thru July and then a market slump after that.

 

Follow commodity prices. Natural gas is 3.29; with everything rebounding its remained low. Of course it could just be a glut, I don't know

 

I've never shorted a stock, but today I shorted ANGI(Angie's List). What do you guys think?

I can't see how this company is making money, the only thing I worry about is there are a lot of stupid people out there who will pay for this service.

 

Always include your schedule D. Didn't know this when I filed my 09 return.

 

those people who have signed up are on a perpetual renewal and they make it hard to cancel. Over time I think you are right but shorting is not a long term trade. In and out...maybe a month at the most unless you find a FB gold mine.

 

Be careful when shorting a stock with a large short percentage of its float (30% here) as a squeeze can blow you out of the water. Also i have been able to effectively short NILE in the past by simply going to alexa.com and seeing if there has been in growth in traffic to its site. May be you can do the same with ANGI.

 

Have a stop for your trade. 19 bucks seems fair if you want to give it a lot of wiggle room. Also, have an exit for where you want to take profits.

 

Thanks for the tips. I didn't invest much since it's my first short, but I'll go ahead and add the stop.

Since shorting is not long term, should I buy a put option a year out if I'm not optimistic on the stock?

 

With shorting a stock isn't the most you can ever make is 100% of what you put in assuming the stock goes to 0. Doesn't that make it more risky then going long on a stock. I am not questioning you I am just curious.

 

You can do that but few do for some odd reason. I'm not sure why because that is "safer" IMO. Maybe greed. Maybe shorts do a lot more day trading or short trading so they don't look long term. Maybe a VERY good reason that I really don't know.

I know that sometimes they hedge their bet on short puts by getting some short calls to go with it. That limits your gain but also limits your loss if a squeeze occurs.

But to be honest, I am not an expert and I wouldn't listen to me. That is just a concept world to me and I have no real experience.

 

Obviously my timing was way off on AAPL, that "last hurrah" lasted a couple hundred bucks above my expectations, as most euphoria tend to. But that GOOG/AAPL pairs trade has been a long time coming. Like I originally said, I believe it will be a great market neutral investment going forward.

 

What do you mean by market neutral?

 

Wouldn't you have been blown out of the AAPL short a long time ago to make your whole pair trade invalid?

 

The theory is that it would work in a general up market or down market.

 

I'm guessing he means from this point going forward? But yes, if you had done it at that time, then you absolutely would have lost your shirt.

 

I know the definition. I'm just curious what he means by market neutral.

 

I know you two like to try to play gotcha games with each other , but I don't really know what you're getting at - I think he was pretty straightforward about suggesting that he felt the trade would work in an up or down market. In a technical sense, he's currently right in an up market, and I assume he believes it would have worked in a down market too. From a practical standpoint, I think he was wrong about the direction of Apple (still up 15-20% from when he made the prediction) and most people would have exited the trade by choice or force somewhere along the way, but if you did have the conviction/ability to stay in it, you'd be up right now.