Monday, October 09, 2006

After an extremely long hiatus, I'm back blogging again. A few things have changed this time around, I will be focusing on special situations investing and currencies. More analysis to come...

Thursday, February 09, 2006

Trending vs. trading markets

In technical analysis, one of the keys to interpreting charts is the ability to determine trending markets from trading markets. Trending markets use moving averages, trading markets use oscillators. So the key question here is how to determine trending from trading. Well, atlast I found out the answer to that question:

Trading markets (aka-range bound)
-Using a 10 day MA, if you see a series of red/green arrows, representing bearish and bullish crossovers, you can assume you're in a trading market.

If not, you're in a trending market.

Comments are welcome.

Sunday, October 16, 2005

What are the potential pitfalls when trying to profit from spreads on pending M&A deals? Here it goes for my round of questioning:

-Is the offer per share price really the price at which the deal is executed?
-Why wouldn't people buy the stock that was trading at the greatest discount?
-What should I be looking for in the SEC filings?

Which SEC filings could uncover potential golden nuggets of information?

Form 8-K- Filed after a material event occurs such as an acquisition.
Form S4-For securities being distributed through a merger.
Schedule 14D-1- Tender offer statement filed by an outside party providing background information on the proposed acquisition.

Please feel free to comment.

Thursday, September 15, 2005

This is a great read for any investor.

Monday, August 29, 2005

As we all know, Standard and Poor's frequently replaces stocks in its U.S. indices. Today they replaced Coventry Health (NYSE:CVH) with Timken Co. (NYSE:TKR) in the S&P MidCap 400. ASV Inc. (NASDAQ:ASVI) replaced TKR in the S&P SmallCap 600. At the end of market close today, ASVI was up 7.87%.

Mutual funds designed to mimic index returns are certainly going to be buying positions in these recent additions causing the increased interest in these stocks.

Wednesday, August 24, 2005

Union Comm Bancorp (NASDAQNM:UCBC) was acquired by Bancorp for $56 million. When, you may ask??? Well the announcement was released AFTER MARKET CLOSE on Tuesday. Are we seeing a recurring theme here??? Below is a three month chart for UCBC:

Wednesday, August 17, 2005

After reading Schwager's interview with Dana Galante from his legendary book Stock Market Wizards, I couldn't help but pass along the following information for potential short candidates:

-Companies with high receivables.
-High CFO turnover.
-Change in accountants.

Ms. Galante also mentioned she wouldn't short anything moving straight up. It has to show signs of weakening or stalling....hmmm maybe we could use some technical indicators here.

I decided to perform a search for Dana Galante on Ask Jeeves and this is what I found. She keeps an incredibly low profile on the Internet.

In addition to the above red flags, it is important to glance over any recent Form 8-K filings. It highlights changes in auditors and can give additional insight. We can cover other issues such as cash declining relative to total assets, CFO lagging behind net income, COGS growing rapidly relative to sales, etc. That is another discussion in and of itself. The key thing here is to watch out for the red flags, then investigate, and act.

Companies with extra cash do one of three things:

1-Distribute cash to stockholders by raising dividends or buying back shares.
2-Invest in existing operations (R&D, develop new products/operations)
3-Make acquisitions.

IAC/InterActive Corp (NasdaqNM:IACID) is an example of a company that has mastered the art of the acquisition. The following chart is that of ASKJ and IACID:

IAC/InterActive recently spun-off Expedia, a travel services company. Spinoff companies are always important to take note of. Expedia is now on my watch list.