Sunday, October 04, 2009

BAGAKOAA June 12, 2009


Well its Friday, clean of my desk make my to do list for next week and the balance of the month day. Got my “Real Money” book by Jim Cramer. The guy is nuts, but extremely bright. (Thanks B & D)

Here is a couple of ideas.

3 million people are expected not to get television signals starting today (FCC analog to digital switch). So where does that average American go to pu a converter box? RSH, Radio Shack. Cramer did about 10 minutes on this dog of a stock, but he is right look for a quick bump 15 to 18 over the next three months. 20 % upside in three months. Get in at 15 set your stops at 14.25 and get out at 18. Got to give credit to Cramer.

Got Gold? Me neither, I am still waiting for 850 an ounce and may never see it. There is a very nice ETF trade on the NYSE, GLD. Have some fun and get what ever interactive chart system you are using like Google, Yahoo, Morningstar, Schwab, what ever. Overlay the spot market price for gold over the chart for GLD. I’ll wait a second,. . . . . Ok got it? That’s right they match almost perfect. Gold is 950 GLD is 92 Gold got down to 800 GLD was at 82. If you are thinking devaluation of the $, or worse, it no longer being the reserve currency to World Bank or worried about inflation. Get a few shares of GLD and put a stop in at 85. You might also look at the 6 month and 1 year options on this one.

Watch your oil stocks, as Oil is at 70 a share for no good reason. Demand for oil is way down globally, supplies are way high despite a little surprise this week. The only thing driving oil up is the devalued dollar, (Also driving up copper ,gold and silver). The Dollar is expected to erode a tad more so in theory oil could go higher, but it is not because we are using more. XOM doing great, MUR doing great (Thanks Ted), RIG doing well, all up and average of almost 40% since March. Just make sure your stops are in as this little oil rally should correct to the 50 dollar range. Keep an eye on China’s GDP. It really is a good indicator of oil futures. China’s GDP down from 11% to 6% and just now stabilizing.

TARP and Economic recovery monies beginning to hit the street. There is a huge tunnel project in NY NJ(3.7 Billion-remember when that used to be a lot of money.) If you took my tip, I stole from Ben, Thanx, and you got in GWW (Grainger), it has had a nice run from about February’s 70 to 83 right now. Hopefully you got your stops in at 77-78, but look for this to have a nice run to it. They still have cash, little debt and lot’s of Recovery money hitting construction projects and factories over the next 12 months. I’d look for a 90 by years end.

BAC, I still don’t like and should have listened to Ben at 3 dollars a share. It is now 13 up almost a buck today. They are doing their best to give back 43 Billion in Tarp money. Cramer did back flips over this yesterday (Don’t worry I DVRd it.) I still don’t like, don’t own it, can’t suggest it, but there are a lot of folk talking about 20-22 a share by years end? FYI

After having read the Cramer book, if you are playing with retirement money in the equities market, don’t. Unless you can afford to do serious homework on each position, (an hour or so on each stock a day)and you can quickly and stress lessly make quick decisions, and can afford to loose up to 8% of your assets, there are better investments for you. Bonds and Long term treasury Bills are paying attractive rates above 5%.

I went through an interesting exercise one night this week. I tracked McDonalds for a channeling trend going on since September 07. Check it out. 52-60. If you had gotten in (Butch-did) at the 52 in 07 and kept moving your stops up with the stock, when it corrected late 07 you would have made about 14% in 3 months. If you had done this on every bounce since then, you would have made 32% annually. It is a great channeling stock. It headed back down again from 61. It is a solid reliable stock and it is getting a little predictable. Look for 52-54 in the next month or so. I have some limit order in at 53. I am going ride the wave and see if it happens again. Thanks Butch

In conclusion, the Cramer book has reminded me, to know what you are buying, know what you want to pay for it before you buy it, know where you want to get out before you buy it, and ALWAYS have a stop on any position. Let me know if you have any decent ideas.

Stocks and options I currently own:
PEGA NOTE This is a short position. I want it to go down.



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