Interol Corp (IOC) … what the?

InterOil Corporation (USA) [[ioc]]

What’s going on here?  Ideas?  Major PPT score upgrade this morning.  Awesome end of day rally.  Wish I played it on the day trade.

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I don’t know why this always works, but when you get the sense that everyone is winning, and that everyone becomes an expert on the stock market, then you know the market is going to get hit.

Welcome to Q4!

We should see a little more shaking of weak hands in the coming weeks.  There are a large number of whack stocks that need to correct to much much lower levels before we get a healthier market.  So, dump those, monitor leaders, and initiate a position in quality leaders that retrace to moving averages.  My favorite spot to look for shorts are anything under the 200 ma, or anything with a low volume melt-up.  I’m quite shocked that there are so many stocks with that last quality that developed in the previous month.  More than that, it’s the magnitude of their melt-up that is appalling.  There’s a few members on The PPT that came up with some great screens that fit those attributes.  Currently I am testing a PPT-screen that uses 1)  hybrid spike (contrarian test), and 2)  stock rank (contrarian test).  I’ve noticed when these figures extend beyond a few standard deviations, they signal a reversal is imminent.  Anyway, the idea is the same-  we are looking for smallcap, low-volume melt-up trash.

Meanwhile, I’ve been pulling some long hours again.  Another good friend of mine is getting married this weekend, and although I’m not in the wedding party, I’m the Master of Ceremony.  I didn’t know that’s what “MC” stood for.  Lol.  But I’ve learned that an MC doesn’t just talk, give speeches, tell lame jokes, introduce couples during the reception.  I have to make sure everything gets everywhere a week before the wedding, and that the ceremony has a fairytale ending.  This is hella tiring.  I feel like all I’ve been doing is taking orders from the bride, and making sure all her girls are happy.  That means driving her entourage to every bridal shop on the island,  ordering 8 cups of customized drinks from StarBucks a day (I’ve learned to just have them text me their order then I just give my phone to the barista.  Win.), ordering dinner (and paying for it), giving back massages (win), breaking up fights, drinking a whole lot of Heiniken with the grooms, and listen to endless gossip.  I’m tired.  Must do something manly before they try to get me to go with them to the nail salon.

I’m becoming an expert on weddings.  This is more like it..

PPT score for The Knot, Inc. [[knot]] :  2.04.  Highest hybrid score in past 25 tradings days was 3.28 generated on 9/21/09.  Largest hybrid jump in past 50 trading days occurred on 8/07/09 which generated 74.87% move in hybrid score.

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This is only the beginning.  I’ve ran this system with a few other stocks on The PPT and it works quite well.  So far, the most conservative approach is to buy at hybrid-daily > 10%, and sell at hybrid-daily < -15%  (reverse spike).  I’ll get a tutorial up later for subscribers. 

Step 1:  Find a good company, like RAX!  (see previous posts)

Step 2:  Download the hybrid scores to your computer.

Step 3:  Data dive!

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A smackdown…

… I know people who use Clearwire Corporation [[CLWR]] and I guess it works for them. I can’t stand it. Too slow. And I find it offensive when people plug that thing in an outlet at StarBucks or Borders… pretty soon I’m going to have to bring a powerbar to power my laptop, shaver, cellphone, PSP, house phone, iPod touch, and guitar amp. 

CLWR is not just creating a new culture of annoying consumers, but they set the example themselves.  They have little kiosks advertising around the mall. They even took over the kiosk that sold fake Ray Ban aviators for $10.  Grrrrr.  But I think with greater number of free wireless internet access points growing, the future of CLWR is beginning to look grim. I’m just waiting for those greedy phone companies to cut the price on their internet adapters in half, which would send CLWR down hard. If you haven’t yet noticed, NetBooks are beginning to pop up everywhere (those little $300 7 inch laptops), and are creating a stronger demand for wireless internet connection in a new demographic (cheap consumers).  It’s good and bad for CLWR, but I think its more bad because it increases the chances that they will get undercut by either established wireless access points, or by mobile phone internet deals.  Ironically, I think if any company were to buy out CLWR, it would take a giant mobile phone company to do it. But for now, the chances of that happening are small because its just too expensive. Yes, this stock is too expensive for a trendy technology.

Note:  PPT Hybrid score for CLWR is 1.77, “strong sell”

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Okay, I want to do something different here.  Instead of trying to sell you a company here, I’m going to try to pitch the company’s personality…

Why do I like RackSpace Hosting?  Because they are a company of passion, belief, loyalty and well, they’re full of geeks.  It’s someplace where I can see Chris Pirillo working on the weekends for fun.  I’ll admit, I’m a geek too!  Let me list some for you…

–  started high school chess club, and never lost in all four years!  LOL.  Granted, my school was a bit dumb.

–  I arrange my clothes in my closet by color, and I prepare the next days clothes the night before… ironed and all!  Hmmm, a bit geeky-pansy.

–  I had over 200 credits in college.  Bwa ha ha!

–  I created a video game

–   I have a binary clock in my room.  1s and 0s.

–  I count cards

–  I led my humble school against Punahou (that’s Obama’s private high-school alumni) and won in a quiz bowl.

–  I’m a Street Fighter 2 legend

– I can’t cook

… yeah, I’m pretty up there on the geek scale.  I try to hide it by playing sports and serenading women.  Works most of the time. 

Anyway, with my credentials set, I think I can say that [[rax]] geek mentality is their competitive advantage.  They just love their work, and find victory in personal accomplishment while helping clients.  This is all almost revolutionary in the work force.  Before, it was the industrial revolution, Henry Ford’s idea of the assembly line, where profits were met by production.  And where planned obsolecence meant more sales.  Naturally, the more efficient the line, the higher the quantity, and hence the higher the profits.  But China kind of abused that in our recent history.  What we are seeing develop before us, which is nicely manifested in RAX’s mantra is to be “fanatics,”  to give a superior product backed by superior support.   To give them something that will work the first time and to make sure it works during its lifetime.  I really like their idea of “fanatical support” here, which basically, as they claim, means they will help you each step of the way until you get it done.  It kind of caught my attention, because recently, I’ve been living off my own mantra “Let’s make it work”, which is almost the same, or at least has the same positivity to move one to complete something against odds and obstacles- let me tell you, it has helped me to progress in many ways.  For example, before you enter a trade, just tell yourself “I’m gonna make this work.”  How many times do I see guys trade a stock and say, I know it’s gonna go against me… well then what the heck?!  Why get in the trade?   (“making it work” could also mean knowing when to get out and try again later.)  Take a few jabs, knock ’em out later.  Don’t be a defeatist, be a fanatic.  Try say that to yourself when you’re stuck.  So anyway, I can sit here and explain to you all the accounting numbers for RAX, they are healthy, but I like working backwards here and finding out what makes a company tick.  When you have a bunch of fanatics you’ll get things done.  What sets RAX apart from other hosting companies is that they promise something close to perfection- yup, they are so confident in their abilities, that they are willing to refund the fees if the software they host does not work as promised.  Talk about accountability!  That’s very important when it comes to implementing “cloud computing”, because when a company goes that route, it’s almost like they are handing over the car keys to a third-party and saying, “okay, you drive, while I sell the ice cream.  Oh yeah, I forgot to tell you what RAX does, I rather not though because I will lose you in a minute.   What you need to know is that they are just a bunch of geeks who like to do what they do… like Google.  Maybe something like Motorola’s Sixth-Sigma concept.  Whatever, I just like it.  They set the bar high, and are willing to jump for it.  And it’s working… 61% jump in new customers, revs up 57% from last year.  Pretty good stuff.  I expect those to get better.

So what am I trying to say here?  I’m not really saying to go out and buy this stock first thing Monday.  My last post showed that RAX is really breaking out nicely, and volume is backing its move, but still, the coverage it is getting from Goldman Sachs sets this stock up as a candidate for quick sell-offs.  I would invest on those sell-offs if you believe in that fanaticism and obsession for success is what our new economy will be shaped by.  What I am saying though is to look out for any other company that shares this drive.  Kind of like AAPL.  Meanwhile, dump the Fords, the GMCs, even WalMart (yawn), and MSFT, and other old fashioned run companies.  Even if you decide not to buy RAX, at least be a fanatic in your life!  Give fanatical support to a few really close friends, especially people like your wife, or parents.  I mean, don’t be a stalker, but make a silent promise that you will support them even in little ways.  Wife looks tired?  Massage her feet.  Parents are sick?  Water their plants.  Friend is sick?  Bring over some pho or soup and a pack of cards.  Husband feels bad about work?  Compliment him.  When you play the part of a picture frame, you’ll feel good, and find something that wasn’t there before in that certain picture.  You’ll get something 10x better in return, even if you don’t, you’ll feel great inside being on the side.  Support builds loyalty, and if we can learn that from a hosting company like RAX, then I’d say we made a good investment.  Give fanatical support to someone today!

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Before I give you all my research notes for free on this company, I thought I’d let you check out this stock yourself, you know, do some homework, yada yada.  I’ve been giving out a lot of new picks that have done great, but I’m just concerned that people on the internet just buy and sell whatever other people tell them to do.  Where’s the fun in that!  Some of you have already heard of this stock, so I’d be interested in hearing your side of it too.  I must admit, we’ve been trading this nicely over on The PPT.  Hey, if you find anything good or bad (especially bad) about it, then let me know!  Or if you want to be lazy, I’ll post my opinion and some stats on it this weekend. For those who are subscribing with The PPT, I will link The PPT scores with the price/volume to give you an idea of how the system picked this up. It’s actually a lot of work, so I’ll get that up when I can. Anyway, check out what we got so far…

Time for coffeee!

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