精华 苦辣酸甜难书尽，成败得失笑谈中

[加京游子]

Regression to the mean!

And the mean value will ultimately be determined by fundamentals!

This surely applies to stock markets (be that individual stocks or marketwise) but the puck doesn't stop at the marketplace. This applies to everything and everywhere in life!

Getting a bit too much philosophical. So let me limit myself to the marketplace in a very nice quiet Saturday morning.

Variables that determine the game of any stock price include fundamental, macroeconomic, political, geo-economic/political, technical, sentimental, manipulation, and unexpectable natural disasters. Some variables work on a longer-term basis while others are dorminant in the minute-to-minute, hour-to-hour, day-to-day variations. Over the longer term (how to define longer term is everybody's own task), fundamental is the only determinant, everything else being noises. In other words, the marketplace is rational in the long run. Yet, it is always driven by greed or fear at any given point in time. As such, the capacity to withstand short-term market madness is what that distinguishes ultimate winners from losers. How many of us have experienced/complained about/regretted buying/selling too early/too late? The matter of the fact is this is judgement/hindsight after the fact! Some view the marketplace as a casino, and I concur, to the extent of the minute-to-minute, hour-to-hour, day-to-day variations. The temptation of short-term trading is simply very hard to resist. Being trading-minded, I have to fight very hard against myself to get that finger off the buy/sell button on a daily basis! Statistics have it that the overwhelming majority of fast traders lose money and die poor!

At the end of the day, everybody pursues his/her business the way he/she deems prudent. At the game of stock speculation, there is NO textbook to learn, NO empirical model to guide, and NO master to follow. Winning or losing is in you. To a large degree, this is not determined by you but your parents the moment you were conceived! Cows can be led to the riverbank but can't be made to drink water!

To be philosophical again, this applies not only to the marketplace but also everything and everywhere in life!

Best of lucks, everyone!

 

[加京游子]

Accumulation vs distribution; buying opportunity vs falling knife

Everybody loves a bargain. Yours truly am no exception. The key is to distinguish the former from the latter!

Reading the tape wrong, I backed up my truck and aggressively added LVS May calls and sold puts Wed. May 5 after seeing a 10% drop (the first 10% drop ever in the entire year) with enormous volume. The market soured the next two days and I ended up holding a very heavy bag. LVS recovered nicely throughout last week except yesterday with the market heading down and down, turning my ITM calls into deeply OTM. Depending on how the market and LVS perform next week, what I thought as a great buying opportunity may turn into a sharp falling knife. Should LVS be not turning around next week and my truckload of May calls get cancelled, my loss on this trade will be again tremendous and will have to be chalked up as another lesson learned with dear prices! I have already flushed my BAC May calls down the toilet, heavy loss (15K, ouch! Turning a weekly 300% paper profit into a monthly 500% loss really sucks --- I tripled down at much higher prices after the retracement from the breakout high, thinking it was a head fake. Trades don't get much worse than this, shit!)! Short-term trading without clear catalysts in sight is damned! Pray that miracle does happen next week and LVS doesn't do me in!

Just curious how can posters keep posting only winning trades? Is this really what is going on in the marketplace? Am I that much out of touch with Mr. Market?

 

[Consciousness]

And the mean value will ultimately be determined by fundamentals!

This surely applies to stock markets (be that individual stocks or marketwise) but the puck doesn't stop at the marketplace. This applies to everything and everywhere in life!

Getting a bit too much philosophical. So let me limit myself to the marketplace in a very nice quiet Saturday morning.

Variables that determine the game of any stock price include fundamental, macroeconomic, political, geo-economic/political, technical, sentimental, and manipulation. Some variables work on a longer-term basis while others are dorminant in the minute-to-minute, hour-to-hour, day-to-day variations. Over the longer term (how to define longer term is everybody's own task), fundamental is the only determinant, everything else being noises. In other words, the marketplace is rational in the long run. Yet, it is always driven by greed or fear at any given point in time. As such, the capacity to withstand short-term market madness is what that distinguishes ultimate winners from losers. How many of us have experienced/complained about/regretted buying/selling too early/too late? The matter of the fact is this is judgement/hindsight after the fact! Some view the marketplace as a casino, and I concur, to the extent of the minute-to-minute, hour-to-hour, day-to-day variations. The temptation of short-term trading is simply very hard to resist. Being trading-minded, I have to fight very hard against myself to get that finger off the buy/sell button on a daily basis! Statistics have it that the overwhelming majority of fast traders lose money and die poor!

At the end of the day, everybody pursues his/her business the way he/she deems prudent. At the game of stock speculation, there is NO textbook to learn, no empirical model to guide, and no master to follow. Winning or losing is in you. To a large degree, this is not determined by you but your parents the moment you were conceived! Cows can be led to the riverbank but can't be made to drink water!

To be philosophical again, this applies not only to the marketplace but also everything and everywhere in life!

Best of lucks, everyone!

What do you think of the author of the book : "The intelligent investor" - Benjamin.Graham? Is he a master worth following?

 

[加京游子]

What do you think of the author of the book : "The intelligent investor" - Benjamin.Graham? Is he a master worth following?

BG was definitely one great stock player among the many who have come and gone. And there will surely be many to come and go --- you can take that to the bank. I happened to have read that book and quite a few by other great stock speculators.

Nevertheless IMO, the principles the great ones practised may provide a goal post to guide but no, their operations can not and should not be followed. I can list out tens upon tens of reasons why this is so. Simply put, these great ones are born not learnt (this holds true not only in the marketplace but also everywhere in life, be that sciences, academia, literature, arts, sewing, cooking ...... even garabe pickups. Take cooking for example. Have you heard that great chefs are made out of reading and following recipes? I haven't! They operate in their own ways and write cook books for others to buy, read and follow!). Secondly, the circumstances under which they successfullly operated have completely changed. Time has evolved and is evolving, markets changed and changing, stocks changed and changing, players changed and changing, regulations changed and changing. Thirdly, with a few lucky exceptions, these great ones failed miserably once or twice or three times before they made it big, really big. How many small-fry retailers can withstand one wipeout, two wipeouts, three wipeouts financially and emotionally? Fourthly, the vast network of resources these great ones are privy to is simply beyond the imagination of small-fry retailers. Last but not the least, there are an unknown but definitely humongous number of failures behind each and every success story that gets told. History only records and remembers the lucky minority!

One thing that will surely never change is human nature! That is why we have a marketplace to begin with and that is why the marketplace will surely remain open day after day after day after you and I are long gone. How to play the game of human nature is every participant's own pursuit --- beauty lies in the eye of the beholder! At any rate, a few lucky ones will surely achieve monumental successes while the overwhelming majority will undoubtedly fail with unspeakably pain --- you can safely take that to the bank too!

 

[sera]

Yes. Some people recommend this book:
Psychology of the stock market

 

[加京游子]

Seeing the dollar beyond the nickle with DNDN

It is simply a gorgeous day out there and I am going out for a bike ride soon. No need for fast traders to read this but longer-term investors may want to finish reading this post --- my thought on DNDN going forward.

Allow me to begin with by stating that this is a brand new DNDN, a biotech powerhouse in the making!

OK, a little backgrounder again. I sold every single share in PM trading on April 28 last year north of $27 (no calls) and let my sold May puts expire. I put everything back in 20110140C right after the DB secondary (at 19.xx) and urged my buddies to get in/back in immediately. Only some did. I got back in LEAPS not knowing the PDUFA date. I did not trade DNDN ever since and I posted my strategy going forward quite some time before the PDUFA date. I rolled LEAPS into April and May calls and recorded them here. Then I rolled everything into May calls (traded a little here and there to finance my other operations). Sold every single 0545C in my cash account at open 5 cents below bid the morning after reading MG's unacceptable $28M sale (about 70% of his vested holding) in one shot at 8.95 when the pps was around 54 but kept the little shares (bought at 28 Jan. 28) and 20110150C (bought at 2.9 some time last summer) untouched in my TFSA. DNDN's violent retracement from the high of 57.xx to the double bottom of 41.xx did not surprise me at all but surprised like hell at the same time. What did not surprise me was the steady retracements following MG's extremely selfish sale. What surprised me was DNDN's tanking alongside with the market panicking.

All is history now, water under the bridge. I got a little back in last week (20120190C, -0641P, and -20110150P), planning for a lot more to get back in (again in the combination of buying shares, LEAPS and selling short-term and mid-term puts) a bit later. The reasons why I did not get all back in last week are twofold: 1) my selling LVS, HGSI and APPY front-month puts, selling DNDN June and 201101 puts and keeping ITMN spread lock in a huge chunk of my cash; and 2) OE next week.

Although I am not back in much, let me go out of the limb and spit out the way I see DNDN going forward next week and in the longer-term.

Conditional on that the market doesn't make dramatic moves and that substantial news doesn't break out, I see DNDN closing 40-45 next Friday, the open interests are simply too big for MM's not to control the pps unless it is absolutely out of their control.

After that, I have no idea how the minute-to-minute, hour-to-hour, day-to-day trading will go but that is the least of my concern, anyway.

Fast forward to mid-2011 now. All three facilities are expected to be online with full capacity, which is expected to produce around $2B worth of Provenge (insufficient demand is not expected to be a problem for quite some time to come). Slap a 10 PS ratio and one ends up with a MC of 20B, giving an estimated pps around 150. Discount at whatever rate one might desire, I see DNDN as a multi-bagger by the end of 2011.

That is Provenge on the indication label use alone. Production capicity expansions, off-label uses are wild carts that I have not factored in. Throwing in the pipeline trials that will be initiated, all I can say is I am upbeat, very upbeat indeed!

Risks? Sure, tons of them ahead and I have itemized some previously! The risks I see by owning deeply OTM LEAPS are a buyout pps below the strike. But if no buyouts now in the 40's, imagine the offer when the pps is north of 50, 60, 70 ......

I see violent retracements over the last couple of weeks as results of a variety of factors in play. These are simply noises over the longer haul.

In short, the brand new DNDN is in its infancy. Teething pains are just a matter of life for any infant in the craddle!

Let me repeat again: this is the way I see DNDN going foward. Be advised again that don't get into anything without your own hard DD. It is your money and you are the only one who can safeguard it.

Enjoy the gorgeous Sunday and best of lucks!

p.s. Being open-minded, I greatly welcome sharing and discussion of DD's here. I also greatly apprciate people for providing leads/recommending books! But if you are a hit-and-run fast trader, please take your comments elsewhere, respectfully!

 

[加京游子]

Cat: let me offer you my deep regrets and sincere apologies

for calling you names and accusing you of everything you are likely not the other night! At that time, I was at the forefront of three major concurrent battles and my emotions were on the footing of a coil spring. I waited for nearly 3 fucking long years for the moment of truth and judgement since the devastation on May 10, 2007. Simply put, not many men can emotionally withstand the turning of a huge brokerage account balance into a mountain of margin debt over night, leaving alone the serious financial fallout. And I was playing with my own money, not like the professionals who were playing with others' money. In my own little world, the FDA's CRL at the night of May 8, 2007 forever broke all my life dreams and changed my dreamed lifestyle. In the grand scheme of things, my loss was nothing relative to the thousands upon thousands of men whose extra years of quality life were striped away at the stroke of a pen completely insanely and unnecessarily. Factoring in the delay of treatment for breast cancer, can you see the big picture of the loss of money and more importantly, life? Stilll, there was no excuse for me to lose my temper like that. Yes, I am a man of flaws, no doubt whatsoever about that! I am hereby expressing to you my deep regrets and offering my sincere apologies for what I said. I haven't met with you and have no idea who you are. I am hereby also begging you for your understanding and forgiveness. In addition, I am offering to take you out for dinner when my APPY play concludes.

 

[lazycatcat]

Thanks for your gracefulness

Hi Jia,

Thanks for your kind words and gracefulness. I was offended for a while but then also started to see your views were not without benefits. Investment and speculation are about win or lose without middle ground. Skirmishes in views or words are nothing comparing to brutal market conditions. It is probably also the benefit of being able to communicate anonymously such that any conflicts are taken more on business basis.

I hope we can find another DNDN-like situation to wage another significant battle. It will take huge effort to first find the battle and then even more effort and courage to fight it. Two heads are probably always better than one at least in finding the battle.

So hope we can find such situation early and then have a real celebration after the battle !

 

[加京游子]

That was quite a comeback!

Generally speaking, today's green close should mark a one-day reversal. Let's see what lies ahead. Oh, boy, boy, I badly need big runs for several days in a row after all these poundings! Shorts had enough fun. It should be longs' trun now!

 

[加京游子]

If I were short MGM/LVS, I would cover or sell my puts

John Paulson now owns 40M shares, that is nearly 10% of the shares outstanding. Have no idea how the market will respond to this filling but last night's AH trading should provide some hints. Upon Paulson's loading up on BAC last year, BAC steadily ran for about a month from low 13's to nearly 19. If the market is reversing its down trend, this Paulson big ownership of MGM may lift the entire sector. Hope this is enough to rescue my May calls.

今天大概是小弟拉大哥一把了.

 

[加京游子]

This hurts like hell!

Today's breakdown has all but effectively killed my LVS/MGM May calls! Oh well, I did not want to leave a winning table and aggressively played one big hand too many. The end result? I got punished severely. Highsight is always 20-20. May I borrow someone's crytal ball if you happen to have one?

 

[lazycatcat]

I didn't follow LVS and MGM's latest results. LVS probably doesn't have debt concern while MGM has. On the other hand, if current Euro fear turns out to be manageable, assets held by MGM and LVS could potentially be valued higher.

Most likely, the Euro issue is manageable, given there are no more strikes there. I think people understand if they default on national debt, they will be out of international community.

 

[lazycatcat]

RMBS

RMBS option is being priced for high volatility in June. The court decision may be available on May 24th. Not sure if there is going to be settlement or not.

I think court decision of $18 B will be appealed and may turn out to be lengthy.

Any insights ?

 

[加京游子]

RMBS option is being priced for high volatility in June. The court decision may be available on May 24th. Not sure if there is going to be settlement or not.

I think court decision of $18 B will be appealed and may turn out to be lengthy.

Any insights ?

I haven't followed RMBS ever since the last round of court decision.

LVS and MGM were facing BK danger March last year. That is long gone now. Both are grossly undervalued. I like LVS more than MGM for many reasons, which I will not detail. The latest selloff hurt me badly. I was fighting LVS battles since Jan. and won about 2-3 battles every month. I was actually planning to quit front-month calls plays after this round, getting shares to hold for the long haul and just writing covered calls and puts to milk this cash cow. For this play, I went in really big and they are going to expire worthless. The market and LVS just don't want to let me finish options plays with a big win. I am meeting my Waterloo this year --- a really big loss. My front-month LVS, MGM and BAC calls will expire worthless --- the loss is very big. It looks I will be put shares in APPY, HGSI and LVS saturday. Oh well, LVS has done me good, really good and I will go forward with it despite the big loss --- Apart from the sudden gains in DNDN and ITMN, LVS has printed me a lot of cash since Jan., compensating all my losses in many others and still left my account with a pile of cash. I don't think I have made much off MGM.

I am now fighting a big battle in APPY. The March PR guided news did not come out within the estimated timeframe. So, it is another waiting game now.

AF from the Street.com has published another list of 14 stocks facing the FDA big decisions. I think I will pick a few and fight, not all of them.

My shopping spree will start next Monday, after options settle Saturday. Target No.1 is DNDN, I will get back in 50% as planned. Hope Mr. Market will hold DNDN right here for a couple of more days. I will see how HGSI, LVS and MGM go before deciding what to do. Fully loaded with APPY after another 3K shares being put Saturday. I will lighten up a bit or buy some puts should an anticipation runup happen. Need to reserve a good chunk of cash for the unexpected/unexpectable --- this latest breakdown has fooled me big time. I was planning to quit BAC short-term calls but add some shares. I will quit the options but put off share addition before the financial reform picture clears up.

 

[lazycatcat]

Do you mind posing AF's link ? He must have a website he publishes but it seems to be changing all the time.

If you believe in LVS, it is a good idea to write covered calls while waiting. The premium is pretty high (indicating high volatility perceived by market of course). MGM could be a turn-around but its debt load is too heavy.

I am very cautious on APPY based on what I have read. The threshold is pretty high to beat current procedures. Plus, there might be a lot work to do to advertise it even if approved by FDA. I personally won't choose this as a battle ground but you may have insight based on your experiences.

I think VVUS might be a better candidate for battle coming July ...