I want you to get a few things through your thick skulls.
1. The market doesn’t give a shit about top line growth anymore. This is a mature bull market that demands bottom line growth and profits. If your stock isn’t pulling at least 25 million in free cash flow per annum, it will be dismantled.
2. Biotech is running because once drugs get approved, they are immensely profitable. Most of the time, small biotechs partner with giant firms and simply rake in a percentage of the cash for their r&d. Biotechs aren’t running because revenues are set to explode. They are running in the hopes of profits exploding.
3. If you’re buying any stock trading in excess of 15x sales, you are setting yourself up for failure.
4. Chinese companies cannot be valued based on American correlations. Since the entire nation of China is filled with liars and thieves, there is a very harsh penalty imposed on all chinese valuations, even the biggest firms like BABA.
5. If your stock missed earnings for 2 quarters in a row, it is dead money until they beat again.
6. Gross margins is what really drives stocks higher, not charts.
7. Unless you’re really good at entries, assume that all new purchases will be early. Buy in smaller increments and relish in sell offs when they present themselves, instead of dreading them.
8. Utilizing margin is an excellent way to blow up your accounts, if you suck. If you know what you’re doing, margin is par for the course. Be smart about it.
9. If your stock is somewhat illiquid, be patient and use limit orders. You’ll be surprised how much money you can save with limits over the course of a year. On the other hand, don’t be unrealistic about your prices. If a stock is trading 20.35 x 20.42, due to an illiquid situation, put the order in slightly below the bid in a weak tape to get done. In a strong tape, feel free to place the order slightly above the ask. You’ll be surprised to learn that some buyers are waiting for size on the ask to show up, in order to accumulate a position, and get done quick. Many times I’ve had orders sitting above the ask and my trading desk would call me to find out if I had more stock to sell. I’d simply ask how much the buyer wanted and give it to them or use that knowledge to my advantage by canceling the sales and executing buys instead, knowing someone was thirsty for stock. Get it? Good.
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Why does yelp suck so fucking bad?
YELP is the perfect example of how Wall St no longer cares about a sexy story and great revenue growth. Wall St wants profits or die. That’s why GRUB is crushing YELP now.
Is the bid/ask spread usually so large on AIRT?
Yes
#5 is important. When it finally happens: https://www.youtube.com/watch?v=4pflhw9QItc
One of your most informative posts ever. Kudos.
Also – sorry to append – but to your last point: it’s “get it, got it, good,” all from “The Court Jester.” Great movie. https://www.youtube.com/watch?v=KM1VXhZT37E
How do plebs short Eurotrash Gov. Bonds? The PIIGS other than Greece are asking for it.
Senor Fly. Ibankcoin has become one of few real finance sites. With Bloomturd going full tabloid horseshit may the plebs find these hallowed halls en mass.
Ibc will last 1,000 years
If I were actively trading I would print out stacks and stacks of this stand on a corner with a dollar-sign neckerchief and charge 99cents per copy
(while enjoying a frosted mug root beer float)
Dr Fly, I’m shy by nature so I’ve hesitated to ask you and your community this question, so here goes: Can someone explain to me the wild divergence in stock price between WMT and TGT since YTD. It seems ludicrous to me but maybe there is retail specific, marginal gobbledy-guup that I don’t get. I don’t shop at either store but I know that millions like to get out and see what these “bizarres” have to offer. – regards to all
Tgt is the higher end, more fashion oriented version of communist shopping bizzarre
Target works for people who would rather not be seen in Walmart, or feel it brings them down to be shopping where all that matters is the low price.
If a Target store is well-behaved and properly dressed, it can be adjacent to Bed bath and beyond, etc.
Walmart is so huge, they can be as evil as they want to. For example… the Walmart version of a product. Actually many large retailers pull this trick. Go to the website of a manufacturer and see their product line up and models. Then go to Home Depot or Lowes and you may find the version they sell is not of the same quality and specifications as what you researched online.
bazaar
Very informative, but it doesn’t quite explain why I followed you into HABT just as you were getting out. One of us might be wrong which, technically speaking, is not possible.
#7 is my favorite.
I still own HABT, but not all of it. I sold it AFTER management permitted PE to circumvent the lock up expiration and cash in. DONT YOU FUCKING READ ENGLISH?
Um. Remember, I have a thick skull.