Friday, July 28, 2006
Weekly Summary: Could have done better
My portfolio gained 0.6 today to finish the week up $15,588 (2.2 percent). Not bad, but not as good as the major indices. For the week, the S&P 500 gained 3.1 percent, the NASDAQ gained 3.7 percent, and the Russell 2000 gained 4.2 percent. With one more trading day remaining in July, I again find myself in the unenviable position of trailing the S&P 500 for the third month in a row.
Well, I was spectacularly wrong about NTGR. Instead of opening up a few percentage points above my buy price, the stock opened 10 percentage points below my buy price! Partly this was on account of some clown analyst who downgraded it this morning. Fortunately, the stock managed to muster a bit of a comeback and the limit order that I placed to sell the stock at $18.98 got filled. So in the end I lost 26 cents per share on the trade (plus a $10 round trip commission with Ameritrade Izone). I suspect NTGR may go higher on Monday, but when a trade goes this badly off course, I am not one to push my luck. Live and learn.
I also sold most of my shares in PXPL (for a big loss). The stock spiked this morning after some guy who won MSN's stock picking contest recommended it. This is the second stock this month that he recommended that happened to be in my portfolio (the other was CHCI). I wish I could move the markets like that! (Of course, if my words could cause a stock to spike 30 percent, I would just end up selling the stock back to anyone who is foolish enough to buy it. Hey, at least I'm honest!). Anyway, hopefully his recommendation next week will be DYNT (my largest position).
I am going to be on vacation next week so I probably won't post to the blog unless something really momentous happens. I should be back the following week. Have a great week everyone!!!!!!!
Well, I was spectacularly wrong about NTGR. Instead of opening up a few percentage points above my buy price, the stock opened 10 percentage points below my buy price! Partly this was on account of some clown analyst who downgraded it this morning. Fortunately, the stock managed to muster a bit of a comeback and the limit order that I placed to sell the stock at $18.98 got filled. So in the end I lost 26 cents per share on the trade (plus a $10 round trip commission with Ameritrade Izone). I suspect NTGR may go higher on Monday, but when a trade goes this badly off course, I am not one to push my luck. Live and learn.
I also sold most of my shares in PXPL (for a big loss). The stock spiked this morning after some guy who won MSN's stock picking contest recommended it. This is the second stock this month that he recommended that happened to be in my portfolio (the other was CHCI). I wish I could move the markets like that! (Of course, if my words could cause a stock to spike 30 percent, I would just end up selling the stock back to anyone who is foolish enough to buy it. Hey, at least I'm honest!). Anyway, hopefully his recommendation next week will be DYNT (my largest position).
I am going to be on vacation next week so I probably won't post to the blog unless something really momentous happens. I should be back the following week. Have a great week everyone!!!!!!!
# posted by Stockcoach @ 5:33 PM 
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Nice work. Can you tell us how many trades you have made? I'm asking, because I'm curious how much you have paid in fees. I am in Canada (where you can't seem to make trades for less than $50 [$25 in, $25 out]) so fees are always a killer to me. I am just starting to trade.
# posted by 
: 7:19 PM, July 28, 2006
: 7:19 PM, July 28, 2006
Because I scale in and out of positions, I would guess I probably made about 400 trades per year. Yeah, Canadian commissions are ridiculous. I can't believe TD Waterhouse still charges $29 per trade. Where's the competition?
Hi Coach,
Great job this week! However, you have a small typo...it says "down" $15,558 for the week.
I hate when that happens :-)
Rob
Great job this week! However, you have a small typo...it says "down" $15,558 for the week.
I hate when that happens :-)
Rob
Not sure if this is the proper forum to post articles of interest, so feel free to withold this post. Interesting article from Altchuler at RealMoney.com regarding buying stocks at 52-week lows:
"Back-Testing When to Buy Low
By James Altucher
RealMoney.com Contributor
7/24/2006 3:00 PM EDT
There was an interesting discussion over the weekend in Columnist Conversation between David Merkel and Barry Ritholtz on whether or not to buy stocks at 52-week lows. Barry's conclusion was that investors should mostly avoid stocks making 52-week lows because they are often in a downtrend, are part of a negative sector, have fundamentals that might be decaying and are possibly in markets that might be in a confirmed bear phase. I have a couple of issues with these statements, but first let's do some back-testing.
I took all Nasdaq 100 stocks since 1996, including stocks that have been deleted from the index (to avoid survivorship bias). What happens if you buy stocks hitting 52-week lows that are trading for greater than $5 (avoiding penny stocks) and sell them one quarter later?
The results actually demonstrate that, over this period, the odds were on your side to outperform the market if you bought stocks at 52-week lows. The average return per trade was 7.34% (over 662 trades), including wins and losses. This far outperforms the average return per quarter of the Nasdaq during this period of 2.6%.
Some 60% of the trades turned out favorably and 40% were failures.
You won't always catch the exact bottom, but that's impossible. The key is, for any investing, the maxim "buy low and sell high" can be extended to "buy 52-week lows and sell 52-week highs."
Bon vacance.
"Back-Testing When to Buy Low
By James Altucher
RealMoney.com Contributor
7/24/2006 3:00 PM EDT
There was an interesting discussion over the weekend in Columnist Conversation between David Merkel and Barry Ritholtz on whether or not to buy stocks at 52-week lows. Barry's conclusion was that investors should mostly avoid stocks making 52-week lows because they are often in a downtrend, are part of a negative sector, have fundamentals that might be decaying and are possibly in markets that might be in a confirmed bear phase. I have a couple of issues with these statements, but first let's do some back-testing.
I took all Nasdaq 100 stocks since 1996, including stocks that have been deleted from the index (to avoid survivorship bias). What happens if you buy stocks hitting 52-week lows that are trading for greater than $5 (avoiding penny stocks) and sell them one quarter later?
The results actually demonstrate that, over this period, the odds were on your side to outperform the market if you bought stocks at 52-week lows. The average return per trade was 7.34% (over 662 trades), including wins and losses. This far outperforms the average return per quarter of the Nasdaq during this period of 2.6%.
Some 60% of the trades turned out favorably and 40% were failures.
You won't always catch the exact bottom, but that's impossible. The key is, for any investing, the maxim "buy low and sell high" can be extended to "buy 52-week lows and sell 52-week highs."
Bon vacance.
# posted by : 11:17 AM, July 29, 2006
: 11:17 AM, July 29, 2006
forget ameritrade or etrade. Go with Mbtrading. 0.01 per share up to 500 then 0.005 after that.
Cheap commissions if your trading anything between 300-1000 shares.
Cheap commissions if your trading anything between 300-1000 shares.
# posted by : 11:38 PM, August 06, 2006
: 11:38 PM, August 06, 2006
Stockcoach,
I picked up some ENPT after you mentioned them. Thanks, nice earnings, and it could go higher but I sold half this morning - in this market a bird in hand is the way I'm going. I owned some a few years ago but had all but forgotten about them.
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I picked up some ENPT after you mentioned them. Thanks, nice earnings, and it could go higher but I sold half this morning - in this market a bird in hand is the way I'm going. I owned some a few years ago but had all but forgotten about them.
# posted by : 11:06 AM, August 07, 2006
: 11:06 AM, August 07, 2006 << Home
