Tuesday, January 11, 2005

 

Momentum stocks hit a brick wall

The day began with Taser's plunge. Then other momentum stocks began to flounder. By the close of trading, the biggest decline list for the NASDAQ was a who's who of momentum stocks that finally fell back to earth. Hey, even stocks that soared last year simply because they rhymed with "Taser" cratered. About time I say. Fortunately, good ol' Travelzoo was on the list, down 13 percent. Still, if you ask me, Travelzoo's valuation still makes Taser look like Berkshire Hathaway. Anyway, despite nice gains on my short positions, my portfolio was still down $600 today.

I also added a new member to my portfolio: AVCS. It's another interesting smallcap stock; trading below book value; lots of terrific assets on the balance sheet; and lots of insider buying at prices much higher than what I paid. I suspect the only reason it went down is because a major holder of the stock was forced into liquidation, and was forced to dump nearly a million shares on the open market. Much of the selling appears to be over as volume has dried up, so I'm hoping we go higher from here. Still, the stock is not without risk, so please read the disclosure before you even consider following my lead.

# posted by Stockcoach @ 6:50 PM
Comments:
Bob 2005

1/12/05
Good call on TZOO, i think its headed to 65 very soon, another stock i would go short on GOOG, i think its headed back down below 165.

Look at what happened to TASR, i think TASR could make a 10-15% jump in the next few trading days after its huge losses in the past 2.
# posted by Anonymous Anonymous : 9:24 PM, January 11, 2005
 
What do you think of NEXM? I sold it for a small puny profit because it was swinging too wildly. But it always seems to go up 5-6% and drop again and happens again and again.

There were some insider buying during November month. I was ABOUT to buy some at $1.30 this morning but got freaked out by rampage today.

http://finance.yahoo.com/q/it?s=NEXM
# posted by Anonymous Anonymous : 9:36 PM, January 11, 2005
 
I was checking out AVCS and their website seems to be non-functioning. Check it out.

http://www.americanvantage.com/

Scott
# posted by Anonymous Anonymous : 9:49 PM, January 11, 2005
 
Hmm... Alltel got 3 UPGRADES today. I might grab some in the morning if I can get in at a decent price.

http://finance.yahoo.com/q/ao?s=AT

Scott
# posted by Anonymous Anonymous : 10:03 PM, January 11, 2005
 
NEXM could be interesting, but I don't know anything about what they do or for that matter, the whole biotech area. I wouldn't read too much into AVCS's site being down. It could just be under construction. Besides, they seem to issue enough press releases and SEC filings to keep shareholders informed. But thanks for letting me know. It's still a risky stock, and could potentially go down a lot more. But I think the upside potential outweighs the downsize risks. Still, I wouldn't devote a large fraction of my capital to a stock like AVCS; but as a small part of a well diversified portfolio, it's a good bet.
# posted by Blogger Stockcoach : 10:55 PM, January 11, 2005
 
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