After my failed attempt to add insult to injury last week by trying to buy HWD at $9.99 and selling BAC way before its time, I felt dumb and dumber. So I spent part of my weekend looking at some balance sheets - not many, but just enough to ascertain that there are still good buying opportunities in the market. My biggest criterion: to look for a stock that still has a very big 52 week decline. Due to Santa's imminent arrival, I've got a bullish bias for the rest of the year as I did the whole year. What went down must go up!
So I started off the week with some more market confidence. In addition to receiving an invitation to an interview with a second company, I decided to hop into a new position today. I bought HERO at $2.9695. I initially wanted to get in at $2.50, but then decided: if I don't do it now, I'm never going to do it. I'll be waiting and waiting for the right moment and sooner or later, Santa's going to pass me by. So, I ignored my trading discipline and got in at market, but only invested the original amount I allocated for this position. I have a plethora of reasons for getting into the trade, including but not limited to:
1. the 52 week change on HERO is -39.19%, which means that if the stock market continues to go up this year, the reversal that has already started taking place on HERO will rapidly intensify - with me being one of the main beneficiaries
2. relatively high beta on HERO of 3.04
3. P/B and P/S are both way below 1. In a bull market, sales will start to count. In a bear market, people are more concerned about debt.
4. only has 114 million shares outstanding, which means that this could move as fast as Harry when the bulls take control
5. Insiders have purchased from $2.60 to $2.86 earlier this year
6. last but not least, a good risk:reward scenario... if it hits the 52WH at $5.85, that's about a +97% gross profit. Longer term, HERO was near $40 before Lehman hit. Oil prices continue to defy gravity. If I know miners like I think I know miners, then they're going to start striking whilst the iron's hot - meaning they'll produce more when prices are high. This, in turn, will benefit my shovel seller, HERO.
Shanghai was the most alpha today with a +2.88% move, nearing the 3000 level I have been waiting for. S&P looks slightly droopy on the 5-day and 10-day charts though. Could it be an Andrews Pitchfork in the making? I hope I didn't just buy a top since my portfolio is lagging the market!
-0.29% on the SBA (SBA percentages are slightly messed up as I added some cash to it - probably would have been a bigger decline had I left it alone)
+0.29% on the Roth IRA
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