Now that GOOG is IBD #1 is it time for you to short the stock? I don't know if investors really take IBD rankings that seriously (I hope not). Was Friday's trading of CUTR an abberation, or a sign of things to come?
I believe there are way too many shorts in the market and they have been making good dough for a long time. However, the market is going to correct the other way, and probably overcorrect (It usually does). This means a powerful bull market for the first 1/2 of 2006. This means that PE of growth stocks will not have as much meaning as they normally would.
Looking at the chart, CUTR looks like a good short play. This stock has gone up quite a bit in the past few months and is due for a pullback. Will the pullback be significant enough for shorts to make money? Or will the pullback be a hiccup on the way to $50, $60, $70?
I think that CMED and HLEX are better short plays!
I wouldn't short google yet - it is as we discussed a very different animal.
It may be getting overextended, but is so huge and dominant that it is very hard to model or understand. I do not know about FLEX, but I would be wary to short CMED now. Imagine that there is a bird flu epidemic, or a strong fear of it - the stock may go through the roof on emotion. May be you think that it already has - but it is a bit too much of a gamble at the first look. More research would be needed for better judgement.
I do think cutr has excellent growth prospects long term, although I like elos better. The profit growth rate will likely slow, but any pullback should be short to medium term.
I wouldn't be shorting GOOG right now either. The company seems to be the Wall Street darling for the time being, and with good reason. My brother works in the IT business and he thinks GOOG will force MSFT to make many changes. He also thinks that GOOG will go to $1,000 per share. You've gotta be long GOOG!
You are right when you say that nothing new is coming out of the CUTR camp. If they don't have a blowout quarter their stock will certainly slip as expectations are high for this company.
CUTR was down 2% on Friday, could that be a trend to $32?
Speaking of CMED, this weekend it has been discovered that the water in a river in Bejing has been contaminated. I don't know exactly what type of material is in the water.
Very interesting. You sure do a lot of talking about your methods. I guess that proves you are not skilled at them.
The key word you and the "controlled studies" used is indicators. There are many indicators within the TA spectrum. None by themselves would work on a consistent basis. TA has many aspects to it. It is the combined use of the ones that are found to work under certain conditions that allows the successful user of it to prosper.
The over extended nature of one stock in a niche to others can be clearly seen in charts, without the use of FA to see it. More times than not each will reflect what the other reveals. It is like getting a confirmation of your thinking. It is when there is a discrepancy that you know you need to dig deeper.
Well, of course! I am just an amateur and my main goal here is to test my ideas against other people's knowledge and experience, as well as expose my conclusions and computations to constructive criticism. I do not claim to be a professional sure of myself. If I were, I wouldn't post here. Unless that is manipulation were part of my arsenal.
Regarding TA, what you say is unfortunately completely subjective. Most TA books feel like people drawing targets after bullets already hit. Perhaps not - in my experience, fundamentals with a bit of very general observations tend to work pretty good on average, and I stick with it.
In others words you will except/solicit help but once you obtain the knowledge/experience you seek you would not be willing to spend the time sharing it with others.
Do you know how to read a schematic or blue prints? Can you create them (not a copy)?
There are lots of people that by their very nature can not properly comprehend and then apply TA.
Well, a discussion gets a bit philosophical now, but yes, in general I only expect to be taught only if I have to offer something in return: a tuition, or a part of my own experience in an even exchange. There are exceptions, but a lot more often someone will pretend to "teach" you while having other goals in mind.
What you write about TA does not look like teaching and sharing at all. Apart from the option strategies advice, which is fairly simple but may be useful, there is nothing in a way that can be applied. A reference to a book you like or a method that you find useful would be welcome. Otherwise it is just "I know what to do, and you know nothing, so listen to what I tell" kind of stuff.
One can not be taught (at least not easily) something that they do not have the aptitude to learn/apply. Thus the asking about schematics and blueprints, and the ability to understand and create them.
>>> �But somehow, I feel that any such skill would have to be constanly honed and adjusted as things that used to work no longer do. I am not a profesional, and do not the time as well as necessary tools for that. I guess my point is that I do not claim to possess any such skill�<<<
The business world is ever changing and dynamic. Therefore, the data upon which fundamental computations are made need �to be constantly honed�. Fancy that the other primary tool needs adjusting, honing and skill to be properly understood/applied as well.
>>>�I am just an amateur�<
Have you studied the effects that overall market direction, sector trading patterns and niche trading patterns have on a stock? Are you aware of their relative importance versus the fundamentals of a specific stock? You are aware of what studies have shown about this aren�t you?
>Have you studied the effects that overall >market direction, sector trading patterns >and niche trading patterns have on a stock? >Are you aware of their relative importance >versus the fundamentals of a specific stock? >You are aware of what studies have shown >about this aren�t you?
Safe question. Nobody short of a swindler can honestly answer yes to this. There is always more to be studied.
Regarding being "unable to teach", I suggest you try. This "I know things but can't tell since you are not smart enough"
mantra gets boring. Again, references to sources you like and find useful are very welcome. Regarding studies that suggest that what some technical analysts claim makes money turns out not convincing, a good place to start is Malkiel's Random walk on Wall street. There are plenty more references there.
The answer to your other question is that I studied a few books on TA, such as John Murphy or Martin Pring's books for example, and found them somewhat unconvincing. I try to apply what I learned there from time to time but with mixed results. So you may assume that I do know the basics of TA.
As I said, I do not claim that it is impossible to use TA with consistent results. My methods of more fundamental nature work well enough for me. Many great investors like Buffet keep it fairly simple. TA is more subtle, and I do not have time and resources to do it properly, nor do I think most people have. I may be wrong. If you have reasonably simple, testable, repeatable TA algortihms to apply please share (not that I would). But so far you provided nothing of essence in your posts regarding how exactly you use it and how you arrive at your picks and conclusions. All you throw around is some jargon and strategies that can be found in every investment book mentioning options. At the same time you seem to claim that you get great results with TA. You are a funny guy.
Why am I supposed to believe you?
Well, I also can say that if you do not understand Malliavin calculus, you should listen to me where options are concerned. Or if you do, prove it.
I suggest we stop this meaningless discussion and stick to the facts/exact references/news/constructive ideas, as opposed to great stories of our past performance and incredible depth of our knowledge that we are unfortunately unable to pass to other lesser beings.
Read the two "Market Wizards" books, and you will find that great success stories come from both technical and fundamental sides. The secret to winning is mostly about proper money management.
The key is to have an edge, which allows you to place trades that have a better chance of success than failure. When I predict $50 for this stock, that is based on a fundamental formula I've used many thousands of times to project a fair value for a stock, and I feel comfortable with that. If someone else finds $32 as a target, it has no affect on me because it's not part of my edge.
I'm a technical trader, but I do lots of fundamental analysis because I want to know where the difference between market price and fundamental "fair value". That tells me things about a stock.
For example, HANS is a stock I would buy based on a strong uptrend (technical). However, I know that it is fundamentally WAY overvalued, so I keep a higher risk factor, and would buy fewer shares. In the case of CUTR, it is now still undervalued fundamentally, so I would buy more shares.
My fundamental formulas are based on future growth, projected earnings, and cash on hand. With both fundamental and technical analysis, 2 people can look at the same data and come up with very different conclusions.
Again, it's not about the method. It's about knowing your own edge. If you see someone else that you respect who has a very different outlook, you may want to recheck your analysis, but that's all.
I make a living trading stocks. These are my impressions of your comments about "TA".
TA can be described as using past price data to project future price action. Beyond that, there are so many different methods in TA that it really doesn't make sense to lump them all in one bag and say that they don't work. We already know for a fact that people make money using TA....just not MOST people.
I understand your frustration with the lack of a TA method that can be easily tested and proven, but it cannot exist. If such a method did exist, eventually enough people would find out about it, and it would be destroyed by the market. Therefore, your proof has to come from people like myself who make money consistently trading with TA.
The way I do it is simple. I watch the charts of strong stocks, and I buy them when I detect a bottom in a down cycle inside of the larger trend up. That is all.
The real problem with TA is that everyone wants a formula that will provide winning trades. They just don't want the losing trades. The problem is, every good method provides only an edge, not a crystal ball. You are still going to have plenty of losers, even after you have a good edge.
Once you know you have an edge, you have power. Ever been on a winning streak in a Casino? Think of yourself as the Casino, and when you are on a losing streak, that means the suckers (other traders) are on a winning streak. While it is painful, you know it is only temporary.
The random walk suggests that no one can make profitable trades, because all information is already available to all participants in the market. This concept is patently ridiculous, and only academics and losers give it any credence. The market is not efficient because of human nature, and information is not equally available to all participants.
What IS important is the notion of random movement. That is very alive and well on Wall Street, and it's one of the secrets to making money. It's the random movement that pushes a stock out of its path, and into the profitable trading zone.