Keeping Your Cool

 

Yesterday and today I have been faced with the increasing challenge of keeping my cool during a missed opportunity.  I participate in the markets primarily as a trader who sashays in and out of high probability chart setups.  But I also like digging into a company or sector occasionally and getting a feel for their business.  This is exactly what I have been doing with Cree over the last two weeks.

It is one of the stocks I identify as aligned with our current administration.  We know our government is into wealth redistribution so we might as well try to position some resources on the receiving end.  Companies and municipalities can convert their existing lighting infrastructure over to LED at a relatively reasonable rate to place themselves in the grace of our Premier.

CREE is the pure LED play and their new technology is reducing the price point verses traditional lighting options.  And the increased efficiency per lumen is making the recuperation rate a much shorter duration.

I was going to put on a little teaser position into the close yesterday.  And I didn’t and they crushed earnings.  The stock was up big after hours.  I listened to the conference call and like where their strategy is and the way they communicate with Wall Street.  I planned to buy them today on the first dip.

The market opens up and the stock goes parabolic, +20% and I watch, waiting like a sun soaked lion.  It starts to pullback and I’m like, “Oh God, yeah.”  Now I’m just waiting for signs of buyers.  It keeps coming back to me, I keep watching, very happy about the development. 

10:23AM:  I’m loving the action, it’s come in quite a bit, and I’m waiting for the heavy lifters to step in.  *RING RING* “We need you in (insert bologna corporate agenda here) meeting right now.”  You’ve gotta be kidding me.

I oblige, we talk about nothing for a bit while a decrepit fossil figures out the projector, talk about what? Nothing, and I get out a little after eleven.  Instantly pull up a quote, up nearly 50 cents, awesome, risk=higher.  I reassess risk and buy as fast as my fingers can click like a good button presser.

Sashay, sashay, then a pump.  And here we are and I have a small 1/4 positon, fully willing to ride an entire gap fill.  Though I doubt we will see it.

Moral: keep your cool, always define risk, and one of my favorite Fly axioms:

When’s the best time to buy a winner?  Always.

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