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Peabody Energy Corp. Message Board

  • livermore1929 livermore1929 Nov 26, 2011 5:40 PM Flag

    Here is a case in point..................

    I had been teacking the ridiculous rise in Silver and waitng for the climax top for an opprotunity to short via the ZSL (the double SLV bear and also to buy calls on the ZSL as well.

    It happened, sometime in May 2011, the climax of 50 was reached and quikly sold, the next day I sold all my other position and went into the ZSL.

    Thgen a wonderful thing happened, the CME increased margin requirments for SLV longs.

    The ZSL was goind up 15% a day, the calls were doing better.

    The 5 day return was 75% on the ZSL and 400% or so on the calls, I was out of everthing by Friday morning, because the move was over, the tape told me so.

    And the street always overshoots on those things.

    I celebrated with pizza, it was a good, but quick ride.

    And no tax considerations either.

    You must pick em good though if you always get a 50%, as for me, I'm more concerned with capital preservation that appreciation, so I may sell too soon, but it has saved me from diaster, as in DMND, I bought at 67 and sold two days later at 67 because the stock didn't act right, I really should have shorted though as now the stock, a month later is at 27

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    • Terribly oversold by close on Friday. Usually we get 4-5 point deadcat bounces after these downdrafts.....Whether this is the start of a short relief rally is anyones guess at this point......Treat is accordingly.

    • Livermore-i think i can definitely learn from your experience. Your advise on BTU in your previous post was well receieved on my end. My question is how do you predict a reversal trend-bullish or bearish in a stock which is outperforming or underperforming the market. I checked our barchart.com. It advises to sell anything going down and buy anything which is going up-that is pure statistical analysis.

      • 1 Reply to ti_hf_in_c
      • Two cases in point, with the primary factor being they acted in a way that they should not have.

        The first was FCX in late January 2010, the market was in a correction, down and down she went, who knows why, it doesn't matter why, those were the facts.

        One day I woke up, went over to the office, that would be down the hall, and started looking at the metal stocks because as deep industrials they fall hard and fast, all were down, except FCX, a leading copper miner.

        The stock was up .25 in heavy volume 3X the normal volume, it was a buy signal right out of the play book - Reminesences of a stock operator - 1923.

        I went long, and bought calls too, buy the end of the day the stock was up 3.00, it was the end of the correction, over the next months the gains were good.

        The next case was PALL, an ETF for Palladium, another industrial metal, it was going along fine and up with the market as it should have, and then one day it didn't, the market was up, all the metals were up, but PALL was not, it's not acting as it should, sell it, no questions asked.

        The next day it opened down 10%, they added more shares.

        You sound as you're all anout the momentum, which is great, so was jessie livermore, but he had very strict rules, as there is very little room to mess up in the momo game, as often the stocks are very dangerous in nature.

        You absolutly must read those books I reccomended in the other post three times. The other being, how to make money in stocks, although don't feel the need to hold a stock "for a minumum of six weeks", if it acts badly, sell it.

        And go with sogotrade, they are $3.00 a trade, and don't be afraid to be in cash, cash is a position, and often a very good one.

        Jessie had some basic rules for going long, the stock must be going up in higher volume, a sister stock must be rising (GM & F) let's say, and the market must be rising in good volume.

        The same would be true for going short, and he made 100 million in the 1929 crash, so he is perhaps more remembered for shorting.

        However, ten years later he was bankrupt, and a year later he ended his life, so remember, each trade stands alone, a string of wins means nothing other than more capital, you get away from the basics and one bad trade can really mess up you're game.

        Lastly, Jessie said, amongst many other things, there is a time to go long, a time to go short, and a time to go fihing.

        You may want to open up an account with ameritrade and fund it later,perhaps much later they have some really great research tools in think or swim, and other platforms also.

        You'll do well, let history be you're guide, nothing changes on wall street.

    • You are definitely a much more sophisticated investor than I will every be and could probably learn from your experience. From my perspective, I just tend to pick companies with fairly solid financials and seem to be trading low. In the case of BTU, I am actually down about 20% but plan on buying more if it hits $30 to bring down my average.

      I could be wrong but I believe this company is undervalued and will be trading above $50 in the next 2 years....but again, who knows.

      • 1 Reply to bmw_9312
      • Thanks, I do it for a living though, so I need to be, I'm sure you're really good in you're main line of business as well.

        Your a Grahamm / Dodd guy, the book the intellegint investor as well as common stocks uncommon profits are must reads for you, two times each.

        That's the way Warren would eant it. In the long run, value wins, hands down.

 
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