I'm curious as to what other traders and investors think of my current portfolio. I'm a 22-year-old trader and investor, and I like to get input from my more experienced seniors and peers. I always feel a little anxious before a new trading week begins, and I was just curious as to what everyone would think about my current portfolio. I'm really concerned about my short positions, mostly. Before dealing out any criticism, do understand that I'm using my own flavor of short-term trading techniques...NOT long term investing. So it doesn't make sense for me to spread my money around too much and be "over-diversified".
My strategy is to mix both a bullish and bearish stance on different stocks. And yes, I have a margin account... I use about 50% of my funds for more conservative, longer terms trades/investments. The other 50% is allocated to capitalizing on market volatility and the irrationality of others. I will even trade on good/bad news and media coverage, and exit the position (before the price gets readjusted) to come out with a profit. This technique can really pay off when trading on the news of beloved TV personalities, like Jim Cramer. My strategy has worked well so far, and I haven't suffered any real losses. But I just want to know what other folks think of this weeks lineup. After all, if everyone hates my ideas then I will get burned. It's the collective sentiment that moves the market -- not the looks of a chart or what goes on in my head.
First off, let's look at my short positions:
Cal-Maine Foods (CALM)
I'm short on this stock for a few reasons. Number one, I know what it's like to raise chickens. My parents let me do it for a while when I was a child. There is a THIN line between the cost of caring for them and turning a profit on the eggs...and that is precisely what CALM does. The industry has a notoriously low spread and profit margins. And with the soaring prices of corn and grains, I think this will be a nasty year for the "chicken industry". The research also seems to be in my favor. Reuters report projects the 12 month target price to be $25 or lower (seems to be a consensus among the big firms). Instead of a normal "triangle" spread between high, mean and low, like most target price predictions, this one just has a linear drop off.
The CEO of Sanderson farms also came on CNBC last week, and said that their profits are shrinking. He says the chicken industry is either feast or famine, and this year looks like a famine for all of the big "chicken players". He mentioned that other companies like Cal-Maine are also going to feel the pain, big time. So these are some of the major reasons that I've gone short on CALM. I think the stock is due for a strong, downward trend which will leave me with a big chunk of change. What do you say?
Oclaro Inc. (OCLR)
I actually like this company, and think it has a very strong future ahead of it. So why would I go short on it? I think that last week, it got WAAAAYYY too inflated and is due for readjustment! Yes, it got the legendary "Cramer Bounce". Cramer recommended the stock on Tuesday night, when it was trading around $15. He said he thinks it could go as high as $30+ within the next 12 months. The next morning, in pre-market, there was already a major gap opened between Tuesday's closing price and Wednesday's opening. At one point that day, the stock was soaring above 10%. Thursday, the same thing happened. The stock skyrocketed again. I was kicking myself for not buying it and quickly selling it for a nice profit.
By market closing on Thursday, the bear inside me started to roar... In fact, I think the bear inside me killed and ate the bull inside me, lol. I figured it would be a smart play to watch this stock and pounce when it started to burn out. It just went up way too much too quickly, in my opinion, due to the torrent of other Cramer fans buying it. So I kept it on my watch list. Friday, as I expected, it went up only 1% or so and began to drop. It ended the day with a 0.5% loss. I think it has reached the ceiling and hit some major resistance, and the bears are out to take it back where it belongs. Of course, I think it may soar again and grow over the course of this year, but I think this big two day gain was mostly artificial and emotional. So, again, what do you say? I'd like to scoop up some profit on this potential downward readjustment, then actually go long on this stock to see it grow.
Now for my long positions...
Frontline (FRO)
Lorillard (LO)
ETFS Physical Palladium (PALL)
I think PALL was very undervalued when I bought it last week. It belongs close to $85-$90, but fell down to the mid/high seventies during the panic over Libya last week. My mining stocks in Silvercorp Metals and Silver Wheaton also fell a lot at the same time, and hit my trailing stops. So I don't own those right no
My strategy is to mix both a bullish and bearish stance on different stocks. And yes, I have a margin account... I use about 50% of my funds for more conservative, longer terms trades/investments. The other 50% is allocated to capitalizing on market volatility and the irrationality of others. I will even trade on good/bad news and media coverage, and exit the position (before the price gets readjusted) to come out with a profit. This technique can really pay off when trading on the news of beloved TV personalities, like Jim Cramer. My strategy has worked well so far, and I haven't suffered any real losses. But I just want to know what other folks think of this weeks lineup. After all, if everyone hates my ideas then I will get burned. It's the collective sentiment that moves the market -- not the looks of a chart or what goes on in my head.
First off, let's look at my short positions:
Cal-Maine Foods (CALM)
I'm short on this stock for a few reasons. Number one, I know what it's like to raise chickens. My parents let me do it for a while when I was a child. There is a THIN line between the cost of caring for them and turning a profit on the eggs...and that is precisely what CALM does. The industry has a notoriously low spread and profit margins. And with the soaring prices of corn and grains, I think this will be a nasty year for the "chicken industry". The research also seems to be in my favor. Reuters report projects the 12 month target price to be $25 or lower (seems to be a consensus among the big firms). Instead of a normal "triangle" spread between high, mean and low, like most target price predictions, this one just has a linear drop off.
The CEO of Sanderson farms also came on CNBC last week, and said that their profits are shrinking. He says the chicken industry is either feast or famine, and this year looks like a famine for all of the big "chicken players". He mentioned that other companies like Cal-Maine are also going to feel the pain, big time. So these are some of the major reasons that I've gone short on CALM. I think the stock is due for a strong, downward trend which will leave me with a big chunk of change. What do you say?
Oclaro Inc. (OCLR)
I actually like this company, and think it has a very strong future ahead of it. So why would I go short on it? I think that last week, it got WAAAAYYY too inflated and is due for readjustment! Yes, it got the legendary "Cramer Bounce". Cramer recommended the stock on Tuesday night, when it was trading around $15. He said he thinks it could go as high as $30+ within the next 12 months. The next morning, in pre-market, there was already a major gap opened between Tuesday's closing price and Wednesday's opening. At one point that day, the stock was soaring above 10%. Thursday, the same thing happened. The stock skyrocketed again. I was kicking myself for not buying it and quickly selling it for a nice profit.
By market closing on Thursday, the bear inside me started to roar... In fact, I think the bear inside me killed and ate the bull inside me, lol. I figured it would be a smart play to watch this stock and pounce when it started to burn out. It just went up way too much too quickly, in my opinion, due to the torrent of other Cramer fans buying it. So I kept it on my watch list. Friday, as I expected, it went up only 1% or so and began to drop. It ended the day with a 0.5% loss. I think it has reached the ceiling and hit some major resistance, and the bears are out to take it back where it belongs. Of course, I think it may soar again and grow over the course of this year, but I think this big two day gain was mostly artificial and emotional. So, again, what do you say? I'd like to scoop up some profit on this potential downward readjustment, then actually go long on this stock to see it grow.
Now for my long positions...
Frontline (FRO)
Lorillard (LO)
ETFS Physical Palladium (PALL)
I think PALL was very undervalued when I bought it last week. It belongs close to $85-$90, but fell down to the mid/high seventies during the panic over Libya last week. My mining stocks in Silvercorp Metals and Silver Wheaton also fell a lot at the same time, and hit my trailing stops. So I don't own those right no