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Monthly Archives: January 2012

Why uranium will rule in 2012

I believe someone here already posted a thesis supporting uranium stock at this level so I’m only going to add one additional point to support why uranium related stocks are one of my heavy position in my portfolio for 2012.

Simply put, I believe the Middle East crisis will impact 2012 the way European crisis affected 2011 except the magnitude will be much larger.  While oil price will shoot up, uranium will be seen as a long-term alternative to oil.  Possibly with the crisis in the Middle East, consistent oil supply may become an issue in the long run; this prospect will, in my opinion, fuel the need for more nuclear power plants.

Hence, my loading up on uranium related stocks: CCJ (the King of uranium stock); URRE, URG, and USU.

This is not a recommendation to buy; just me making a note for myself…

Good Hunting!




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The trick I used to gain fresh perspective on market condition and to protect profit

When you are sitting in good profit, all you see is green on your quote machine.  Wow!  What’s a beautiful sight!

Unfortunately, the green color also plants a seed for complacency; and thus, you open the door to give back much of your profit if not all before you wake up from the hypnotic effect of the flashing green light.

An antidote is needed to protect us from the narcotic effect of the green flashing light!  And what better way to jock us back to reality than a red flashing light?!

When a gift is handed to you by generosity of the market in the form of January effect, you have to say “Thank you” and walk away with the gift.  But you don’t want to walk away when the gift is not done giving yet, right?  So, here is the trick I used that can protect myself from being mesmerized by the green flashing light.

When I am sitting on a decent profit and the market reached a point in the chart that look like a strong resistance.  Even though my intuition feels there are still room to run.  I take my profit as soon as the price started to stall at the resistance line.  If price retraced from the resistance line, then I look for an area of support in the short-term chart and start buying back my position.  While this is an optimal strategy to buy back my position as a lower price than what I sold; this is not as important as making sure I buy back my position.  Often time, I ended up paying a bit more to buy back my position or I bought back at same price plus commission fee.

Do you know where I’m going with this?  At this point going forward, the  green flashing light is no longer guarantee if the market correction continue.  Instead of feeling more forgiving to my portfolio shrinkage due to the flashing green light.  “Hey, I’m still deep in the money, no worry” kind of thought is no longer an option for me to entertain.  I hate seeing red flashing light and I have a habit of liquidating my position if the red light flashed passed a certain percentage.  I’ve no tolerance for red flashing light!

There, there, unless you are gunning to buy and hold for at least a year to take that long term capital gain for tax reason, the only downside of this strategy is that I may end up paying a bit more than I got out in order to stay in my original position. That is why I only execute this strategy around resistance point (or support point when I’m shorting).  Think about it, if the stock rally hard and break thru resistance after I got out, I’ve no qualm jumping back in at higher price because of the powerful momentum behind it; as in my DNDN trade. All I want is to participate in getting a piece of the pie; where I jump in relatively to my past trades is not as important as making sure I hopped in the train before the risk becomes unacceptable.

The additional benefit of this strategy I used is that sometimes I may not buy back the same number of shares I sold due to the lofty height of the price in the chart.  This reduction of shares also protect my realized profit if I’ve to bail out of the 2nd  buy with a small losses.

Of course, this only work if one is allergic to red flashing light like I do.

While this strategy sound simple, it is not easy.  You have to overcome the mesmerizing green light and the fear of missing a rally right after you got out.  The way I look at it, keeping a piece of your win (not necessary at the high (or low when short) is what trading is all about.

Needless to say, today I closed enough position to raise 65% cash because I saw way too many red flashing lights!

Good Hunting!

p.s   oh, almost forgot. “Thank you market for the generous gift of January effect!”


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“Resistance is futile” from an antibiotic to the bacteria infection

I’m sure you already know that I like to “gamble” in biotech stocks.  Normally, I don’t like to pitch my biotech picks since they are all highly speculative.  While the risk is high, the reward can be superior as well.  Just check my recent win in DNDN.

But recent new development in the antibiotic sector is so revolutionary I felt like I’ve to at least bring a cursory introduction to you guys.  Remember, this is a cursory introduction, not a recommendation to buy.  There is no guarantee that this new science will take off.

The problem with our current batch of antibiotic drug is that the bacteria eventually learns to mutate around it and make the antibiotic less effective in the long run.  Now, we may have a new weapon.  An antibiotic that destroy the bacteria so that it simply cannot mutate at all.

Check the link below and please do your own due-diligence if you are thinking of “gambling” on this.


Btw, PYMX is an OTC bulletin stock; so the risk is doubling crazy!  If you buy this stock based on this post, you could go crazy as well.

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The hidden value (or under-rated) of Amazon Prime

The way I see it, Amazon.com selling Amazon Prime using annual fee is almost parallel to insurance company selling coverage using premium.

Both offer “perceived value” greater than the price being charged.  Of course, the actual value kicked in once you filed an insurance claim to cover your unexpected loss in the case of insurance.  Or you actually read a free new rental kindle book every month, engaged in multiple shopping expedition in Amazon.com that incurred multiple 2 days free shipping; and watch Amazon prime TV or movies while commuting daily.

Giving the scenario that the average Amazon Prime member probably may not engage in active pursue of taking advantage of the benefits Amazon Prime has to offer, I can imagine Amazon.com’s  receipt of the Prime membership more than offset the cost of providing the services being offered.  In other words, a business model not unlike that of insurance company.

Here is my extrapolation.  The way it is now, the popularity of Kindle Fire feeds the fire for Amazon Prime.  And in the not too distance future, I expect to see Amazon.com offering a “free” Kindle Fire just for signing up for Amazon Prime membership for the first time.   If we see this kind of offer, then we know Amazon.com hit another milestone on their business model.  Edit:  Some might think it is too costly to offer a free Kindle Fire to new Amazon Prime member; but I think the fact that they can make this offer mean that their renewal rate is high and the production cost of Kindle Fire has come down.

In summary, Amazon.com is NOT Netflix.  In other words, I just don’t see Amazon.com trading the way Netflix did in 2011.

And I’ll be looking for an opportunity to buy back AMZN when the chart look right.

Good Hunting!

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The case against BBY

Simply said, my opinion is that Best Buy is going the way BlockBuster did.  While Netflix was Blockbuster’s nemesis; I see Amazon.com as Best Buy’s nemesis.

From my personal experience, I bought most of my electronic gadgets from Amazon using Amazon Prime for 2 days shipping.  While I’m paying an annual fee for the Amazon Prime, the benefit already out-weighted the cost due to my watching videos, free book rental, and the 2 days shipping I used all the times.

I can’t help thinking that there may be a lot more people doing the same thing as I did since there is real savings from buying electronic equipments from Amazon.com comparing to buying from Best Buy.

Enough of fundamental, the most important factor is that the BBY chart looks bearish.  A break thru October 2011 low of $21.79 will start another leg down.

Good Hunting!

Disclosure: I’m short BBY


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Falling Knives follow-up: DNDN- Luck of the draw!

DNDN! Yes, it is day like today that wipe-out all the minor whip-saws from picking falling knives.

It is all about “song selection” that win you the vote as they repeated over and over again at the American Idol TV show.  Well, in the stock market, it is all about the stock selection.  As not to be too greedy, I took profit of DNDN @ 9.70 average price.

Also took profit today on



I took small losses on SINA and a decent profit on AMZN yesterday.

Remember it is all about song selection that complement your style of singing.  Oop!, please substitute song with stock and singing with trading…

Good Hunting!

Update: in hindsight, look like I “should” have hold on to DNDN a little longer; but that would be counter-productive to think like that.  I see DNDN as a brand new “possible trade” and will review it as though I was never in it before.  If I’m still interested, I will have to evaluate the trade based on its risk factor since it already run so much.

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