Börsipäev 20. mai
Kommentaari jätmiseks loo konto või logi sisse
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Rev Shark:
Momentum and Its Discontents
5/20/05 8:15 AM ETMomentum is for idiots and jokers.
-- Jim Cramer, Mad Money, Wednesday, May 18, 2005
Momentum is one of those stock market concepts that is extremely easy to criticize because it so susceptible to misuse. Unfortunately, many folks use the concept of momentum to justify their bias against selling stocks and taking profits. Many of these folks were destroyed in the bubble days when they refused to recognize that upside momentum had ended and was not going to return quickly.
But the concept of momentum is essential to making money in the stock market. As that joker known as Sir Isaac Newton recognized, objects in motion tend to stay in motion in the same direction unless acted upon by an outside force. The same is true in the stock market. Once a trend begins, it tends to continue for some period of time, and that is what makes it possible to make money in the stock market.
What is the alternative to momentum trading? Endless buying a stock that is downtrending? You won't make any money that way unless the stock eventually reverses and gains some upside momentum.
Momentum is nothing more than the recognition that to make money in the market, buyers have to eventually come to the realization that a stock is worth buying, and drive the price up. If the stocks you buy never gain momentum, you will never make any decent money.
Jim Cramer's comment above is probably his subtle way of conveying the idea that you need to take profits now and then. Momentum is a very dangerous thing when you fail to acknowledge that it won't last forever and that when it ends, it tends to end rather quickly and without much warning.
If you have had a good run in recent weeks, it probably is not a bad idea to take some profits and/or tighten stops. It is effective money management that determines who the jokers and idiots are, not momentum.
The big question we face as we wrap up the best week of the year so far for the indices is whether the rally can continue. One of the things about momentum that makes it such a hard concept to handle is that it tends to last longer than is reasonable. By almost any measure, this market is extended or overbought or whatever you want to call it. We made a big move and need a rest, but there are still lots of folks who want in, and bears who are covering, and they keep these moves going.
Keep in mind that momentum does not die easy. In fact, a pause or a pullback when merely strengthen it. The big mistake is to assume that the market will suddenly roll over and go straight down after the big recent move. Momentum tends to be a rather stubborn thing, because it stirs up strong emotions.
So yes, we probably are due for a rest, but keep in mind that momentum is positive and the trend is up.
We have a slightly weak start shaping up this morning. Oil is inching up, and after a big week, some profit-taking is due. Keep on eye on those dip-buyers -- they are our best evidence of the degree of buying interest.
Thanks to Cody for doing another fine job in my absence. I appreciate it.
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ja veel...
...Federal Reserve Chairman Alan Greenspan speaks on energy before an Economic Club of New York luncheon at 12:30 p.m. ET .Investors will focus on any comments Greenspan makes on U.S. inflation after the sharp gains in oil prices over the past year. -
Gapping Up
MYG +23% (investor group to buy Maytag - WSJ; up in sympathy: WHR +5.9%), IPSU +26% (receives buyout offer), DEPO +14% (gets FDA approval for Proquin XR), AWA +10.2% (to merge with US Air; up in sympathy: DAL +4%, AAI +4%, AMR +3.5%, JBLU +1.8%), ABRX +9.3% (bounces after 75% drop yesterday), VC +6.5% (to sell plants to Ford - WSJ), JDAS +6.2% (UBS upgrade), DNDN +4%, ADSX +3.6% (started with a Buy at Kaufman; tgt $5), NTMD +2.7% (added to JP Morgan's Focus List) Gapping up on strong earnings/guidance: OPSW +10.6% (also JMP Sec upgrade), ADSK +1.2%... Stem cell stocks are strong on reports that Congress may have veto-proof support to fund research: ASTM +13%, VIAC +11% (see recent small cap profile), STEM +6.4%, GERN +2.4%.
Gapping Down
Gapping down on disappointing earnings/guidance: SHRP -19% (also JP Morgan downgrade), SYNC -18%, KMX -10%, SRNA -7.3%, BRCD -5.2%, TGAL -7.4%, FUEL -8.5%..... Other News: ELOS -5.7% (FDA requests additional info), AEOS -5% (Pru and Piper downgrades), PSUN -2.6% (Prudential downgrade), ANF -2.2% (Prudential downgrade), NFLX -1.7% (could still see Amazon enter the market -- CIBC), VARI -2.6%. -
JJC on täna Able Labs (ABRX)'i kommenteerimas. Põhimõtteliselt oli meil Arkoga ka samasugune vestlus täna hommikul. Tulemuseks oli täna hommikul poole positsiooni müümine.
Recall Able Labs If Generics Tempt
By James J. Cramer
You can go for months, years even, regretting that you didn't own one of these generic-drug makers. And then you'll get hit by an Able Labs (ABRX), where the facilities aren't what they are supposed to be and the CEO leaves abruptly, and you will remember the reasons you avoided these stocks in the first place.
Take a look at that chart. Here's a stock that was at $24 Thursday and is at $6 today. I don't care whether Able's a big or small part of your portfolio; few investors can survive that kind of hit.
Now, it is true that the declines in the Mercks (MRK) and the Pfizers (PFE) take your breath away, but I could argue that at least there's real value there. If you buy and wait around long enough with Pfizer, I believe you will be rewarded. If we somehow fix our judicial system, you could be rewarded with Merck, too -- not that I would count on that.
But Able? What is it? A bunch of plants? Some salespeople? A reputation now sullied in such a way that few will trust it? Frankly, there's no there there. One day, the company's making plenty of money off of knockoff drugs; the next it isn't making any.
All through my trading career, people have tried to get me to buy these generics. I remember all too well other times that people got Able'd because of manufacturing problems.
To me, the reward has never been worth the risk. So, think of Able next time you buy one of these stocks, and at least you will know why I didn't commend it to you.
sB -
Panin Able Lab (ABRX)'i teemal LHV Pro alla ühe analüüsi ka. Antud analüütik on firma suhtes mitte nii väga negatiivne.
sB -
LHV chatti on tehtud kolmas ruum veel juurde - kas rahvahorde üritate rohkemate tubade vahel ära jagada, et liiga palju rahvast muidu korraga ühes toas sees?:D
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See on LHV Tradingroom'i inimestele..
sB -
LHV Tradingroomis ei suhtle inimesed omavahel suuliselt?
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See siis LHV majas asuva LHV Tradingroomi klientidele. Kiireks suhtlemiseks ka LHV tiimiga.
