I have been live in NQ_F since the start of June. I wish I could say it has been stellar, but I started making some classic mistakes like taking random entries and ignoring stop losses. I have written a new business plan and trading plan (version 3839) and it calls for daily performance disclosure. You can now see every live trade I take, going forward as well as my daily performance.
Enjoy:
There are good products and then there are great products, and there are good companies who only create one great product and then fizzle. However, we are occasionally blessed with a great company who also happens to make great products and Go Pro fits the bill.
Most gents my age can’t think about investments because they have to think about their next meal or their keeping their low level corporate job to feed their 2036 mutual fund, thing. I must make several long term thoughts in order to achieve infinity pool status.
Glassdoor employee reviews of the place are not the best. One employee was disappointed because the free food they offer their employees, yeah it’s not organic. I could see that being reason for a low rating. Overall, even with less than stellar employee feedback in public forum, they are still a cool tech company in California. This allows them to pay people less, very nice.
GoPro market cap is currently valued just under 5 billion. One month ago Apple paid 3 billion for Beats by Dre. These are headphones. There is a potential symbiotic bond between Apple and Beats, perhaps something to bolster their music business. Even without digging into the motives that drove Apple to value Beats at 3 billion, we can see that in-demand wearable tech is worth billions. If simple headphones can fetch 3 billion, then I see no reason why simple HD video cameras cannot fetch 9.
Finally, the GoPro is not just a great product. It has achieved the ubiquitous feat of going completely viral and garnering mass cultural acceptance. Children strap these cameras to their chests and heads with pride. Try walking around with Google Glass on with pride. Trying to hard brah. It is the Red Bull of cameras. You don’t have to walk around looking like a bunch of Starship Troopers. Cultural acceptance also gave Beats the 3 billion dollar price tag.
So who will buy GoPro? I could name a few, but maybe you could flex your brain muscles a bit on this one.
Raul is invested until further notice. Here’s to hoping it does not go all Twitter on me.
Price target $72
Comments »Camera maker GoPro (ticker: GPRO) is having a solid market premier, rewarding first day buyers with over 20% in gains. Now of course, this is drawing the attention of media jack asses, none of which suggested buying the company yesterday. A few say it is a buy here, a few are already calling it ‘frothy’. These people are not on the television to help you in any way. They do not want to converse with you and learn and grow, NO. They want to entertain you with their jokes and looks.
Here at the Raul blog we live under a cloak of sorts, skating by on lower than average view counts and continually observing, studying, and hypothesizing the market. This is science, live, with a touch of style. As any scientist will tell you, failure is just as informative as success, if you allow it.
GoPro will go higher, lower, nowhere for a while based on nothing. I could see here and I might, to lock in the quick gains. But then I will be tasked with creeper stalking GoPro to ensure I do not miss the next move, praying for a dip and sacrificing Amish hormone free range chickens to the gods for the gift of a dip. It is a ton of work and in this heat, it can be downright exhausting. Or I can just take it off my screens and call it an investment, just like my TWTR, LO, and until Fly says otherwise XON.
Do not read too far into the GoPro move. Yes this is a great company and one of the finest tangible products introduced to my generation, right up there with the iPhone, the Nest, Tesla Model X, e-cigarettes, and Coors light silver bullet power can/bottles. But, this chart is still in its infancy and may not take shape for a few quarters. Are you prepared to take a 2-3 quarter drawdown?
Comments »I like to keep a few long term ideas in the mix while I frivolously commit and ditch random tickers day by day. That is because a few companies possess enough unique qualities to make me want to work for them. And I figure, if I want to work for a company, then I want to own their shares for a few years.
Sometimes this works out very painlessly, like Blu e-Cig maker LO. I have been collecting a dividend and my capital has appreciated over 20 percent. Other times I go to bed with a stock, sticking by its side through rough times and continually working with the stock as it progresses through time. This is much less enjoyable initially but the eventual fruit will taste that much sweeter.
Enter Twitter—oh sure, it has done well these last few weeks. Some traders caught the entire move and walked away handsomely paid (h/t @RaginCajun). Other traders caught a few days of the move and are happy, treating TWTR much like any other tradable ticker. I on the other hand, am still in the red on Twitter, -18.6% to be precise. Even down this much, the position is my largest and over 10% of my book. It was built when my book was much larger than it is today. It was built to be a 10% position when my book was about 20% higher than it is worth today. I will ride it for five more years if I must, or until something that actually stands a chance at disrupting this media behemoth arises. It is that big of a disruptive force. I might even buy more.
I added a third investment to my books today, one that is likely to feel odd and misunderstood for several quarters. I bought GPRO. This camera is a massive disruption. For a while, I was committed to AMBA because they supplied many of the Go Pro components, but now I can own the pure play and I will not be missing that opportunity. If silly Dr. Dre headphones matter, than Go Pro REALLY matters.
Investments aside, I closed out my F calls and bought some WB and GRNH. I am back in the pot trade and WB is looking for some sympathy action with social media on blast during FIFA WORLD CUP. GO USA, today we advanced while losing. It felt like No Child Left Behind. #merica
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After spending much of yesterday afternoon slashing risk out of my book, one after another exiting longs and long runners and yolos and their ilk, I spent most of today away from the markets. The big move and reversal Tuesday rattled me mentally and after much introspective it was one position which elicited the strongest emotional response. It was an oversized weekly option in FB.
Given the short dated duration of the position, when it swelled beyond 2% of my book only to quickly become 1% of my book a few hours later, the sheer volume of the swing occurring in such a short duration was a bit more than I could bear.
For example, I also have July DDD calls. This position already caught a scale by Tuesday lunch, and when it faded it was a nonevent because I had time for the idea to pan out and the position was just a tad over 1% of my book after the scale. I Midas touched this position again today, scaling another piece a few ticks off session high.
But I pressed the FB through lunch, opting instead to watch the Italians lose at soccer. I knew I could avoid the urge to scale if I stepped back. When it snapped back I cut. Then I went on a killing spree with all the funky runners I had left in my book.
Bottom line: the size was too big for the short duration and sometimes I gather too many positions. It becomes distracting. About 12 is my limit.
After the fact: I was full on fake baked out of the FB and wow, it looks ready to rip.
May the buy flow continue rip the heads from social media bears, amen
Comments »The Nasdaq started off looking like a trend day but over the lunch hour it stalled before downright spiraling lower in the afternoon. Let me start off by stating the obvious-if you read my last post then you realize I was expecting this move to stick.
With that in mind you may also realize I hardly took any profits into this move, instead opting to add long exposure via WUBA, which I now stopped out. I am not letting this move catch me flat footed. I have raised my cash over 50% and sold out of BALT, RGSE, LIVE, and FB.
What I have left is all suspect, here they are largest to smallest:
TWTR, LO, TSLA, HOS, FRO and F, DDD, and ANGI calls
This was a neutral print thus a degree of expectation existed for this selloff to fade back higher. However, the market is out of balance short term, thus the neutral type print is without clear value to pin back to.
I may be overreacting, but I can always buy back long exposure. My broker will love me. For now, I am panicking early.
This should make for an interesting week. Stick to your plans and keep risk on the forefront.
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The Nasdaq is exploding out of this multi day consolidation. This is looking like a trend day although I lack a crystal ball to be sure. However, if it looks like a duck, walks like a duck, and quacks like a duck, it’s probably not a chicken.
Comments »A great many of the traders and investors of the world confine themselves to little boxes of conformity, for the sake of group think. Take for example the moving average, a simply spaghetti line tracking across a price chart. Most use the 10 day moving average. I use the 9. Some follow the 100 day. I use the 99.
Can it really be this simple?
Yes. I am one step ahead of everyone and it is a razor sharp edge that lets me cut people up.
If you choose to live your life according to the norms of the masses, then I have no sympathy when your performance is grotesquely normal. Or you can live life dangerously, and change your moving average to a 9, or if you are really a wildcard, an 8.
That is the only hot tip I have for the internet.
Comments »Like the brave 300, the buyers defended the shelf, or cliff that exists on market profile over in the Nasdaq futures. These very futures represent the 100 biggest and best growth names in the world. Now buyers need to initiate the squeeze, like right now.
This is a good spot for buyers to push:
I added to my FB calls, bot more RGSE, and joined the OA crew on ANGI. BALT might be cut if it does not shape up really soon.
Comments »There was enough of a bid underneath this market, despite broad weakness in momentum favorites. Overall the price action was very constructive, and a win for the buyers who held prices above the volume pocket on the Nasdaq:
My stock book into the weekend, largest to smallest:
TWTR, BALT, LO, LIVE, TSLA, IFON, XON, HOS, FRO, RGSE
Options:
DDD July $55 calls, F next week $16.50 calls, $FB next week $65 calls
I lightened up some of my other positions to make some room for fresh ideas to start the new week. I was stalking YY all day long but never pulled the trigger. There are some interesting things going on the China internet space again. This idea and more will require further investigation over the weekend.
Enjoy summer, if summer is your thing. I will be catching some World Cup matches and otherwise living the water lifestyle.
Stop by over the weekend to check out my new intraday charts as we investigate auction theory and specifically how it plays out during the opening swings of the market.
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