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The Stock Trading Advisor’s “From the
Trading Turret”
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From: R.A. Christy
Editor, ‘From the Trading Turret’
President/CEO, Christy Investment Group
http://www.christyinvestments.com
Date: October 8, 2007
Current Field Position:
OFFENSE
Bullish Percent Indicators:
BP NYSE Xs
@ 60%
BP OTC
Xs @ 46%
BP Option Xs
@ 58%
BP S&P 500 Xs @
66%
BP NASDAQ Xs @ 70%
Favored Sectors: Gaming, Gas Utilities,
Non-Air Transports, Oil, Telephone, Oil Service, Precious Metals, Autos
and Parts, Waste Management, Semiconductors
This week’s diatribe …
Vacation’s over and it’s time to go back
to work.
I’ve been away for the last couple of
weeks catching my breath and trying to rest up. This time away was
different. Instead of heading for Destin and the Gulf of Mexico with
golf clubs in tow, I opted instead to head north and visit my alma
mater, Grove City College in Pennsylvania.
While there, I had the chance to sit in
on a Venture Capital panel discussion and address a number of classes.
I found the students to be quite engaging
and a whole lot more in tune with the world at large than I was at the
age of 18. These kids were some of the smartest and mature that I’ve
ever encountered. My visit morphed from the original three days into six
jam-packed days.
When I wasn’t in the classroom, I held
court in the Breen Student Activities Center. The place is named after
one of my classmates, Ed Breen, who also doubles as the CEO of Tyco.
The kids that stopped by to chat and pick
my brains were amazing. Several had already started their own businesses
and many had already begun trading their own stock portfolios.
I was impressed by the fact that they
accepted nothing at face value. They questioned and challenged every
aspect of my trading methods and business model. The underlying question
was – why? I was picked at, prodded and poked for the better part of the
week. I’ve had physicals that were less intense.
As a result of this exchange, I came away
a better trader, investor and business person. I say this because I had
to justify every aspect of my business. There’s a million ways to make
money in today’s market. There’s also a million ways to lose money as
well.
Several suggested ways that I could
improve my exit strategies. I’ve been working with the same model for
years and many of their ideas make sense because I never saw what they
were seeing. Together, we’re going to test their ideas and see how they
unfold. I’ll keep everyone apprised as this develops.
Sectors:
Earnings season starts in earnest on
Tuesday when Alcoa reports. I don’t see many surprises on the horizon. I
think the sub-prime debacle has caused anyone who thinks they have a
problem to speak up and speak up early. Any bad news will be taken as a
negative surprise. In this market, that means a trip to the woodshed.
The Basic Industry sector appears to be
slowing down. It may nothing, but I’m eyeing this one cautiously because
we’ve had a good run here. We’re still moving with the market, but as
fast as we were.
In the Financial Sector, I still think
underweighting here is the way to go because we’ve seen only the tip of
the iceberg on the sub-prime mess. Merrill Lynch is going to write off
$5 billion and the CEO says “I missed it”. Go figure.
In all likelihood he was too busy looking
at all the fee income being generated by the con and forgot to look at
the risk side of the equation. I guess he missed the memo telling
everyone that the guy who was managing Merrill’s distressed debt quit
because senior management was tired of his bleating about the high level
of risk they were assuming.
I still think that Bear Stearns and
Lehman Brothers are takeover targets and if these names back up a bit,
I’m jumping in. I had a notion on Bear (BSC) during the summer market
swoon, but I didn’t pull the trigger. The positions I’ll most likely
take here are to buy some out of the money call options with 6 months or
so until expiration in order to lessen the risk.
I still like Healthcare a good deal. The
two areas I’m looking at heavily are Biotech and Medical Products. As to
the Pharmaceuticals, I’m looking to short a few if they bump up in
price. I think the 2008 Election cycle makes these untouchable on the
‘long” side.
The Semiconductor sector flipped to
offense a few days ago and I’m heading into the fray with a couple of
new names. I’m buying Nvidia (NVDA) and MEMC Electronic Materials (MEMC)
on Wednesday morning.
New Buys and Sells (Wednesday AM)
BUY Nvidia (NVDA – Semiconductors) and
put your stop in at 31
BUY MEMC Electronic Materials (WFR –
Semiconductors) and put your stop in at 58
BUY Research in Motion (RIMM – Telephone)
and put your stop in at 95.
On the Sell side, I’m going to start and
float some offers on the Potlach calls at $7.30 and see what happens.
I’m running low on time and I don’t want this one to get away from me.
Potlach was a position that I initiated when we had the defense on the
field. I wanted to try and position some and opted to buy some
in-the-money call options in lieu of an outright purchase. The stock
hasn’t really done anything, so we’ll just take a small profit and be
done with it.
That’s about it for now.
If you have any questions or comments,
just send me an email and I’ll be happy to lend a hand.
RA Christy
The Stock Trading
Advisor
P.S. Please fee
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R.A. Christy is a professional stock
trader, money manager and author. Mr. Christy is the President CEO of
Christy Investment Group, Ltd., a registered investment advisory firm.
He is also the Managing Partner and Portfolio Manager of Plato Advisors,
LLC. At the time of publication, Mr. Christy may from time to time write
about stocks in which he, Christy Investment Group Ltd or Plato Advisors
LLC has a position. In such cases, appropriate disclosure is made.
Under no circumstances does the information in this column represent a
specific recommendation to buy or sell stocks. Mr. Christy appreciates
your feedback and invites you to send it to
rac@christyinvestments.com.
The Stock Trading Advisor
c/o Christy Investment Group
P.O. Box 625
Alpharetta, GA 30009-0625
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© Copyright 2007 RA Christy
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