understanding the psychology of behavior

Here are a few stocks I follow, and am waiting for my target price to buy…

BNI - With a lot of high profile long-term investors getting into the rail space, the little guys should not ignore the space either. The recent runs were due to momentum players biding up the stock because of the big boys coming in. A decline to the 50SMA would be a good entry point, at a decent PE for BNI, and not too far away from where the big boys entered.

ICE - Anyone that has been reading this blog knows I love ICE and sold it with tears in my eyes . A pull back to around 131-132 maybe seen. I think ICE will get boughtout or merge (I hope with NYX), but it is too small to stay independent and too valuable to other exchanges that want to get into this space. ICE executes flawlessly despite its size.

NUE - One of the best steel stocks in the world, the stock looks interesting here. But the recent Goldman downgrade of the industry gave me pause from entering it the other day. It looks interesting here, but I was waiting for the lower right sloping trend line to be reached before entering.

BRCM - Many talking heads are saying to stay away from tech focus stocks until after the summer, so there is negativity in the space. Once negativity ends, and the herd says it is ‘okay’ to buy these names, BRCM should benefit. A move to between 29 to 27.50 may happen. Bottom fishers should wait for 27.50, but if you really like BRCM an initial entry could be made at 29.

AXP - I love the credit card processing biz model, and the credit card companies in general. AXP is the best of both worlds. It is a bit toppy here, and am waiting for a pull back. I wrote about supply of credit card processing companies coming online soon, but I do not think AXP will be affected as much as MA, as AXP is not a pure play in the processing aspect of the biz and it is not as pricey as MA. Around 62 maybe a good entry point.

GS - I already entered GS at 225, and will do so again at 220 (probably Calls at 220). I do not know what more to say about GS. The guys there know what they are doing better than anyone else. (except when they downgraded NYX )

Hope one of the names entices you to do further DD, and make money on the name. Have a great Memorial Day weekend.

I wanted to pass along this Provenge site… thought it was interesting and contains some good info.

provenge.blogspot.com

I found this to be very interesting, and a potential path to relative peace in Iraq. Sadr is a radical Shia cleric that weilds a lot of power within the Shia community of Iraq, and in the past has been calling the Shias to fight the ‘American Occupation’. But now his views are changing. (article)

Without a doubt this is good news. Hopefully the radical Shias listen to him. (Other leading radial islamist who attempted such things were marginalized by the younger members…. oh the irony… train the young to hate, and when you want to change your message, you are no longer relavent.)

In my opinion he has a reason to do this. The insurgency are not Shia, they are Sunni and Sadam loyalists. As soon as Americans leave, the Shias making noise and trouble are fucked. The Islamic factions maybe working together now to get America to leave. If America leaves, these factions will then fight each other for control. This is a loose/loose proposition for anyone involved in wanting control. And since the Sunnis took over Iraq before, they can do it again and I believe the Shia leadership recognizes this. Because of this, the Shia’s best course of action is to let the true insugency be flushed out.

Then again, it is pretty late in the game to come to such a conclusion. Could be he is just doing it to appease certain voices within his faction, and mean absolutely nothing.

I guess there is a reason why many of the on-line merchants have seen huge stock run ups. (article) Online retail grew by 33% in the UK, and the activity in the UK is a good measure of what is to be with in the US. And the nice quarterly reports of AMZN and other merchants is a sign of this.

With the solid numbers, the short got caught with their pants down and were served. I do not think current prices are merited, but the numbers suggest a better overall financial picture toward online retailers.

Seriously, I do.  Think you’re too good for the little guy… well the little guy has got a piece of you.

Bought my initial position in GS today. It is sitting on support, take a look:

It may go to 220, but I like it here so I started adding. (Will most likely add more if it declines.)

Also, I like how GS upgraded NYX, and NYX’s estimate were raised.  I guess they were influened by my logic :)… I think it is time for me to wake up now. (article)

Seriously, they are.  They launched an exclusive exchange for big boy investors to trade unregistered, private placed securities. (I called it an exchange because that is basically what it is.)  Named GSTRuE, this will make it easier for owners of a private company to find buyers, and a potential ‘way out’ for the owner of the private entity.

I think this is an interesting idea, and should see a lot of interest from the private equity guys.  I do have a problem with it though.  There is too much power in their hands regarding the system.  They will have control of the system in every way, and act as market makers.  As a big boy investor you would have to have a lot of trust in them, especially as they will make the market.

As for me, if I had the assets I would not trade the exchange.  But would use it to unload some equity stake if I was Private Equity guy.  For the record I really like GS as a stock and company.  They are the best traders on The Street (if not the world)… and if they ever wanted me to trade for them I would.

I covered the SPY puts I had on the market.  Was waiting for the SPY to hit the 14SMA.  While it did not yet hit the SMA, with the volatility of the market as it was declining, I got the limit order I was expecting.

  (this chart is delayed, i covered when the SPY was just above the 14SMA)

The market can go lower and see the 28SMA, but discipline made me cover.  But I am still waiting for my entry points for the various equities I currently want. (I am very cash heavy right now.)

The rate of new home sales saw a record in April, that is great news.  The bad news was the median price of those new homes dropped the lowest in history. (article) 

Interesting…

Basic economic principals are playing out here.  This is a very good sign toward the health of the consumer, and suggest a residential housing decline bottom.  Prices are low enough were the consumer is willing to buy them, and more importantly, the consumer has the means to buy them. (Confirming this is the Personal Income data.)

I wish I could come out here and write, “housing still sucks”; especially since I still have a short on the market, and would love it to go down right now.  But the data, and consumer reaction, is telling me a more positive picture.

We very well might be at a housing bottom. 

Do not just brush this off to the side.  GDP figures (that I have posted on here before) have shown for the last year or so a decline in residential housing activity by double digits. That is a HUGE, especially since it never rose at such a rate.  (The rise was a bit more choppy.)

I will not cover my market short right now, still playing the downward move I expect due to a short-term consolidation the market needs… basically playing the noise.  But this info only re-enforces my desire to buy the names I want when I get the chance.

A hammer head shark produced an off spring with out having sex. (article)

I just found it interesting that an animal as complex as a shark was able to do this. Interestings to say the least.

NYSE Euronext has provided the combined Pro Forma results from NYSE and EuroNext.  The comparison q-to-q number is $161M net income, or $0.60 per diluted share.

I think we see something beautiful come July 23rd.