One thing to keep in mind when you think about retail stocks is that the leases are in a way debt..you have to make payments for a long time..so often when analyzing its helpful to capitalize the lease (and add back the lease payment to your cashflow calc).....
DIG is going to crash. GS forecasted oil to go to $50/barrel. I bet traders push it there. Id be buying OIL on the upside though instead of DIG
Yeah. I have a very analytical approach to what I do and it pays off. As for retail another stock that I'm looking into is Coach (COH). Another good company with good earnings yield and ROC. But I'm still wary of consumers spending discretionary income, especially with the retail being the worst it has been in 3 years.
Or do the easy/lazy thing and just trade on the technicals. Right now the decision is easy... stay the hell out until you see a turning point. Same thing for COH...it just dropped off a horrible year-long bear flag. I think you have to wait for it to sort itself out before making a play there. To be honest it's really hard to find any stock that isn't in a horribly bearish pattern at the moment, and that's why anybody who wants to make a definitive statement about the market having bottomed at this point is misguided at best.
You think it would be a goodidea to hold DTO over the weekend? I'm concerned there might be another massive bounce on Monday.
TD Ameritrade has research tools. You can also find information on the SEC's website, Yahoo Finance, Google's finance section, Wall Street Journal online, CNBC, Bloomberg, etc. Tons of great info. If you're just getting started, please be careful shorting stocks. That's not something the beginning investor should probably dabble in. As for how long people wait before they buy the security back they sold short... how long do people wait to sell the security they bought long? Have a strategy going into your trade. Understand that there is an infinite (or very massive) potential loss associated with short-selling.
I agree, a pure short still makes me anxious, though I am a wuss when it comes to that. A bear ETF or buying put options tends to give me more peace of mind because I know how much I'm on the hook for instead.
Are you concerned that the put seller may be completely "naked"? I wonder what happened to any Lehman sold puts.
I'm echoing the same sentiments some others have said about short selling. I would strongly advise against it, especially to someone who is new to the market. Plus, you can make a good amount of money if you time it right, but as strong as the upside is for profit, the downside for losing BIG is as strong, or even stronger. What short selling is selling stock you don't technically own at a price, and buying it back later at another price. To turn a profit, you sell high, buy back low. If you really want to get into short selling, learn more about options to protect your investments.
Just watch for the price action. I see a significant support at $60. There is a high probability that it will bounce when it gets there. What kind of bounce we see will go a long way in determining what happens to oil from there on out. If it does the typical weak one-day, $3 bounce we've seen at previous support levels then look out below. My strategy is to exit once the price target is reached, then wait for the support to be negotiated before taking a position again.
And just to be clear -- I mean the price of oil, not the price of DTO (which looks like it will actually surpass crude itself soon).
OK, I'm going long the Russell 2000 via UWM with a risk stop at $23.50. I think the initial violent bounce has corrected itself, and we're in position for a sustained bounce higher that will likely take $RUT to test resistance at 650. Easy decision here, it seems. Downside risk, ~7% loss. Upside, ~50% gain. Maybe it's just me, but I wonder if part of the violent selling that we've seen lately has to do with the market pricing in the certainty that Obama will win the election and the associated fears of capital gains tax increases.
I bought DIG yesterday at $28.58, and dumped it today for a miniscule profit -- who knows where oil is going??
AMR broke out above the 50 and 200 day MA's today. It's been a while since I've seen any stock do that.
Selling deep out of the money options have a 90% success rate. Buying regular long options have a 90% failure rate, meaning they expire worthless. Its smarter to sell deep out of the money options (like 40% OTM). In selling options, you aren't going to make 100%+ return on your money, more like a consistent 30-40% year after year. Its not sexy trading, but it is a little more easy on the nerves Those who sold Lehman puts obviously lost big, but so did the people who bought LEH stock long.
Damn, energy rallied at the end of the day. I couldn't stomach holding onto DIG anymore after the first hour this morning. I missed out on some pretty nice late day gains. Or at least a smaller loss. First mistake I've made in awhile.
violent selling has nothing to do with obama. the market has accepted obama for awhile. it's continuing bad econ numbers and deleveraging. bear markets have the biggest short term rallies and i think you are positioned right. i am pissed....i went home to take a nap and then i come back and everything bounced. we are setup for another one of those stupid rallies.
My office got to meet with a portfolio manager this past week from American Funds, one of the most respected mutual fund families out there. He was a manager on several funds including Small Cap World, New Perspective, and Fundamental Investors(I think). So mostly small/mid-cap and international emerging markets. An interesting question came up that everyone has thought about before but I looked at it from a different way. The question asked to the manager was, "Have you had to liquidate any positions to keep up with your redemptions?" Simple enough. It thought the answer was going to be a simple "yes", but he said no and he didn't think other funds had either, except for some of the fixed income funds to keep the income stream high in a period of low interest rates. Without looking at the numbers, I'm assuming that net redemptions has to be higher than the 2-10% cash they keep in their funds. So where is the money for redemptions coming from? Once again, I'm assuming some of the profits from sales charges and cdscs go into some sort of rainy day fund for situations like this. Hold it on their balance sheet and buy back "treasury shares" of their fund, to prevent having to liquidate mass amounts at a time. We've seen how these hedge fund managers have had to liquidate their funds against their will, and it has been devastating to these huge volume selloffs. I have been assuming this whole time that the big mutual funds were selling positions and that it was all factored in. If this is not the case, what is going to happen if the giants like American Funds, Vanguard, Fidelity start having to sell off mass amounts of their funds because they have simply been tapped of cash? It could be THE END OF THE WORLD. This is the only way I could understand it working if American Funds has not been pushed into selling yet. Somebody please tell me if I am wrong.
I dunno if American has been selling. I do know mutual funds have been selling to raise cash. I think there was 56 bil in outflows from mutual funds last month. And more fund selling just means the phrase "multiple contraction" (p/e multiple) will be used more and more. Again...I'm not bullish on the market. The demand for equities is just flat out crashing. Lower demand = lower prices.....simple as that.
