Stockcoach's Corner

The portfolio fell 0.4 percent today. For November, the portfolio gained 2.9 percent. Unfortunately, with only one month left in the quarter, I am lagging both the Russell 2000 and the NASDAQ. I have outperformed the major US indices every quarter since the second quarter of 2004 (when I got greedy and put 25 percent of my portfolio into a single stock and had it blow up in my face...last time I do something so stupid). So needless to say, I will be disappointed if I can't keep the streak going this quarter. Hopefully, with a few good trades, I will be back on top.

Up 0.6 percent today. Low float stocks continue to get lots of attention. Among those in my portfolio, ASCEF and SPOR both saw nice pops today. Hopefully some of my bigger positions like DYNT and JOB will also get noticed.

I see Cramer is getting rather testy and defensive about his track record. His email exchange with CXO Advisory is quite amusing.

Up 0.8 percent today. Knowing when to sell is never easy. In fact it’s a lot more difficult than knowing when to buy. Usually with microcaps, if you sell after a 10 or 15 percent move, you can buy the stock back at your original buy price. But on days like today, when microcaps are in play, it’s a lot more difficult. Some stocks will make breakouts on high volume but then wilt after a few minutes, others will take off and keep going higher and higher. In hind side, it always looks obvious which ones you should have sold and which ones you should have held, but trust me, I’ve been doing this a long time, in the heat of the moment, it is impossible to tell. The fact is that there is a great deal of randomness involved. My view is that the best you can do is simply sell the stock as it goes up. If it keeps going up, you sell more stock. If it goes down, you always have the option of buying it back at a lower price than what you sold it for. Plus, this system doesn’t require you to sit in front of the computer all day. You just put in your limit orders and hope they get filled.

This was what I did with CBTE. I sold about one third of my position for $3 and another third for $3.60. The last third almost hit my target of $4.6, but no cigar. The price then proceeded to drop, so I am still holding this last tranche of shares. Unfortunately, CBTE was not a big position for me, so despite the big move today, it did not have a huge impact on my portfolio.

I also sold a little bit of EWEB at what turned out to be near the high of the day. I probably should have sold more, but I have a gut feeling that this stock is primed by a major pump and dump and I want to have a big arsenal of shares to sell if that happens. I also picked up shares in PDEX, DAGM, and SPOR. I wouldn’t say any of these stocks have amazing fundamentals but the fundamentals are good enough that I don’t think the stocks will drop substantially if the microcap fever exhausts itself tomorrow. In the meantime, all three stocks have the characteristics that traders are looking for (NASDAQ listing and tiny market cap).

Down 0.5 percent today. Well that's one big fish that got away. I had a limit order to buy 8000 shares of CNLG last week but it never got filled. Today the stock moved up 300 percent. Grrrr! That would have been a nice stock to own during today's market meltdown. I did buy 5000 shares of US 1 Corp (USOO.OB). The stock has a P/S ratio of less than 0.1 and has been consistently profitable of late. Good enough for me.

Up $11,043 (1.4 percent) for the week. Have a nice weekend everyone!

The portfolio gained 0.6 percent today, finally pushing through the "psychologically crucial" 800K barrier (what, I don't get my own CNBC special?). TSTC, BDR, and the Jobster all helped out.

I shorted 500 shares of CAO this morning thinking that the stock would slide after the company preannounced revenue for the quarter that was below analysts' consensus. I was wrong. It went up. Go figure. I guess I will probably cover tomorrow because I've learned that if a stock goes up on bad news, being short is not a good idea (as MSO so painfully taught me in 2004).

The week started off on the wrong foot as my portfolio sank 0.2 percent. I sold my remaining shares of TSYS. I still like the stock and I suspect it will go higher, but the stock has gained about 60 percent in the last two months despite the fact that earnings estimates for 2007 have been reduced, so I though it would be prudent to take my profit and put the money into other names that haven't appreciated as much.

JOB reported decent earnings after the close. Earnings increased a bit relative to last year although they were down sequentially (there may be some seasonality there). The 10 cent special dividend was a nice surprise. The stock probably won't do much of anything tomorrow but if the company can keep posting solid earnings, I think it's just a matter of time until we are above $2.

The portfolio staged a bit of a comeback today, gaining 1.2 percent, thanks in part to BNSO and SCOP (what's up with the volume in SCOP?). For the week, I gained $12,120 (1.5 percent). While that's less than the Russell 2000, it is good enough for new portfolio high, and that's enough to make me happy. Have a nice weekend everyone!

What's up is down and what's down is up. The Naz was down this morning, and my portfolio was up 0.6 percent. The Naz finished up for the day, and my portfolio finished down 0.2 percent. Go figure. The best case scenario for me now is if the market simply consolidated. Not up, not down, just sideways. Traders are greedy and arrogant now. I just need them to get bored with liquid stocks and shift their attention to smallcaps.

I just can't seem to be able to string two up days together. Down 0.3 percent.

More of the same I'm afraid. The market move higher again today while my portfolio moved lower: down 0.3 percent. As they say, tomorrow is another day.

There is no way to sugarcoat this week. The portfolio did very poorly, losing $2516 (0.3 percent) while the Russell 2000 gained 2.2 percent. That's one of the worst weeks of underpeformance that I have ever experienced. Still, one week hardly makes a trend. My view is that if it ain't broke, don't fix it. A week like this one is disappointing to be sure, but it would take a long string of such weeks for me to alter my basic investment strategy. I have a trading plan, I stick with it, and I evaluate it on a quarterly basis. And even then, I am loath to radically change a trading strategy that has worked so well for me for so long. The fact of that matter is that there is lots of noise in the market. Sometimes you get a bit lucky, other times you don't. This week saw earnings disappointments from DYNT, IFON, and CBTE. I accept that. Next week is a new week and hopefully a much better one!

I think from now on I will start reporting my results ELOY-style: "I had a very strong day today if you exclude all the stocks that went down...blah blah blah". Alas, ELOY I am not. Today turned out to be a tough day (with the portfolio losing 0.8 percent) largely on account of DYNT, my second biggest holding. Make no mistake, this was not a good quarter for them. But having said, they did indicate on the conference call that they will actively use the buyback program whenever the stock dips below $1.30 and that they regard this quarter as a low point, with better results to come. I hope that's true, because this is one stock that has really strained my patience. I encourage you to listen to today's conference call. The grumbling from some of the shareholders was really quite funny.

The market continues to move higher. My portfolio also managed to saunter to a new all time high today, but on the whole, I've been underperforming badly, gaining only 0.7 percent in total over the past three trading days.

There's a new king in town and his name is JOB. I've been buying shares of JOB here and there over the past month and the stock is now my biggest position. JOB is extremely cheap by any standard of valuation. The company will be reporting earnings soon and if the numbers are good, the stock will be in the fast lane to $4. With over $1 per share in cash and no debt, I just don't think there is too much downside here.

No thanks to PXPL, the portfolio stayed in the black today and finished the week up $813 (0.1 percent). I'm not sure where the market goes from here. I guess if I had to be on one side or another, I'd be in the bullish camp. One thing I'm noticing is that the vast majority of traders were caught off guard by the market rally over the past 2 months and are still sitting on the sidelines with huge cash positions. Others like Trader Tim are still short and praying that the bear has finally returned. The bottom line is that few people that I know were able to time the market rally (and that includes myself) and as a result many of us are still looking for new stocks to buy while others have short positions that they need to cover. Either way that's buying pressure. Furthermore, given that few people think this rally is for real, I suspect we have higher to go.

I just couldn't catch a break the past few days. EGR and NSYS reported excellent quarters and the stocks didn't budge. On the other hand, PEAK and SCOP (two position that I had increased only recently) reported disappointing quarters and got ripped apart. On the bright side, I think PEAK's and SCOP's strong balance sheets will preclude any further price declines, but obviously, the market action in these stocks was very disappointing. Down 1 percent so far in November.