After Hours...Down 50

My method might not have been scientific, but it worked. I sold out of all my shares of GOOG at noon today and I must say I have never felt so smart. While I know if was basically pure luck, it doesn't matter at this point. Either way, if you have a long term frame of mind tomorrow may be a good time to initiate a position. The open should be rough tomorrow for the whole market, it may present a buying opportunity.

GOOG Earnings

This is my thought process for GOOG. Today a few minutes before the close I am going to look at GOOG. I currently own the stock. Now if GOOG is up I will sell my stock. If it is down I will hold it. While this may not make sense as a logical decision making tool, it is often a good indicator. Not 100% accurate by any means; however, I do not have a significant edge of GOOG's earnings release today and I do not want to place myself at risk. I have no problem buying the stock up 20 if it beats, I do have a problem holding it if it drops 50.

Not Bad For 3 Months Work

Exxon Mobil's Q4 Profit: $10.7 Bil

Soaring energy prices fueled the biggest profit for a U.S. company ever, a politically touchy issue. Exxon (XOM) earned $1.65 a share ex items, up 27% vs. a year ago and beating views of $1.44. Revenue rose 20% to $99.66 bil. Profit and sales growth actually were the slowest since Q1 '04. New projects' output helped exploration and production results. Exxon rose 3% to 63.11, the best since Oct. 3.

-credit Investors Business Daily for this blurb.

I must say that is alot of money. Do I agree with people bitching about how much that company makes and how its wrong - NO! They sell what people need. Come up with a better idea, come up with an alternative solution, put XOM out of business with your idea. Until then, pay up, because they have what you need and there is no way around it. Maybe you should just buy stock in an oil company and make money when they do...just a thought.

Updated Link

I updated the links. Alot of these sites have some good information. Enjoy.

Ford...Looks Like Desperation

http://money.cnn.com/2006/01/27/news/companies/ford_parkinglot/index.htm

Ohh come on now. Get real. I couldn't even imagine how pissed I would be to work at that company right now. Is that what these companies have to resort to now. Typically you would like to see a company have a product that people want to buy. Not that they are forced to buy. I have to say that is a horrible idea. Sure it build loyalty, but at the same time it fosters resentment. Maybe the employess want a car with better than 20 MPG's? Maybe they like the way a Toyota drives? Who knows. Either way, this is not the way you buld with your relationship with your employees. Maybe Ford should try to just make everyone drive their cars? Maybe Bill Ford should go knocking on doors (with a gun, of course) and threaten peoples lives if they don't buy his cars? Brilliant! Keep it up guys.

Chipotle

Wow, opened up at $45.00 a share, over 100% above the initial projections of $22 per share. If you own it sell it. If you want to buy it wait. Think about it, would you ever buy a stock that was up 100% in a day. NO! I love the restaurant, and will probably own the stock some day, but as for today, it is not for me. Although I am eating lunch there in celebration.

Enough

I will stop with the constant GM posts after tomorrow moring. I am even getting tired of reading them. So it was Kirk pushing the stock up the whole time. You know, nothing would make me happier than watching this stock crash tomorrow right in his face. I actually don't think that will happen but it would be sweet. This stock will go down as one of my worst ideas ever. Actually I will put it right up there with URBN. Either way I have 4 stocks reporting tomorrow so I will either be extremely happy or very upset, probably going to be a big swing in the account tomorrow. I hope its to the upside, but I have no idea, actually tomorrow I feel like im going to Vegas and spinning the roulette wheel. Not a good feeling. We shall see.


A note: I need a new stock, I am looking at the following: CVGI, HXM*, XRTX, NETL*, GFIG, SCHK, BECN, NUCO, UPFC, BGC, LMS, SAM.

I know there are alot there but if anyone has any ideas on any of them shoot me an email. Thanks.

GM

The stock has to be sold short right here right now at $24.00, too big of a run for them as of late. Risk reward is in your favor.

It happened again!

What is going on out there in this world?

GM
GENERAL MOTORS
23.05
+1.20
+5.49%
F
FORD MOTOR
8.40
+0.08
+0.96%
DCX
DAIMLER CHRYSLER
54.84
+2.60
+4.98%


Thats right back to back it beats out the competitors who have made moves to improve themselves. I honestly have no idea what is going on out there. From the outside I have to say that the expectations being built into GM are becoming increasingly optimistic. It is killing me staying in this position. But I honestly can't bring myself to believe that GM will do anything to improve themselves in the meantime. I may bail tomorrow to be honest though. I've got no idea on this one.

UNH is going to be down tomorrow off a weak WLP report. Happens everytime.

Check out REDF, Cramer got this stock moving after hours. Up 20%. Seems like an interesting idea though.

GYI report on the 26th. I did everything I could do to make heads or tails of this stock. I have to say I don't like it. I feel like it could miss on its revenue number. It will make EPS though because it is able to manage its earnings fairly well. It uses lower tax rates, draws on reserves, and is suffering from slowing organic earnings growth. I don't know if I have it in me to short it though. I will entertain any questions on this stock, I feel like I know it fairly well. randommarketthoughts@gmail.com.

How Does This Make Sense?

F= + 0.42 (5.32%)
Gm= +1.80 (8.98%)

How does that make sense? For those of you keeping score, Ford today announced job cuts that will take place before 2012. 2012!!!!!! Maybe if they were going to do something relatively soon it would matter, but 2012 does not matter. And why did GM go up more than F? They did nothing! Nothing! I'm sure its due to expectations that they will do something when they report, but as of yet we have done nothing. I am halfway tempted to double down on them, betting that they will continue to do nothing and based on the hype from today, it might be a favorable risk reward. Either way, when the company that announces the changes can't out do the company that does nothing, it is a very negative sign. Think of it as a higher place on the cliff for them to jump off of!

Weekend Clean Up

Yeah so today was a little rough out there. My account took a bit of a hit but honestly if you made money this week I would like to shake your hand. All the indexes sold off pretty substantially. The dow is down for the year. Next week should be just as volatile. I am going to do some shifting in the portfolio this week, and possibly some earnings trades. I will let you all know ahead of time. I think if GOOG sells off again on Monday (highly unlikely) I will move into some February calls somewhat out of the money for a trade. Hey whats wrong with leverage? That's it I'm done.

Are you seeing this?

GOOG is down around $400. Its down $30 today alone. Why is that you ask? Because YHOO missed and panic has ensued. I feel really good about selling some at $460, kinda wish I had sold more but hey look at it now: it is a buy again. This is a huge over reaction to what I perceive as GOOG taking market share away from YHOO. The amount of fear in this stock right now is amazing. How can you take a stock down $60 based purely on YHOO. I am going to throw it out there that GOOG is going to beat in a week and for that I am entering a BUY order right after I type this...

Random Thoughts

If you own BSX stock, slap yourself, and then slap the management of that company. They are idiots. How badly do they need to pay for this growth? Pending the news flow tomorrow, that stock should be a candidate to short.

YHOO & INTC got whacked after hours. For the first time I am slightly happy I sold some GOOG. The market will open up very down tomorrow especially if Oil continues to go higher. Keep raising the rates FED!

Finished my work on GYI finally. Will let you know the findings later.

General Rule

I received an email from someone the other day asking about a company called Sunlink Health (SSY). Its a small thinly traded hospital company that not long ago received an offer at $11 per share. The emailer was concerned that the offer was too low and that management has hired a bank to "explore alternatives". According to his due diligence (he seemed well informed) he pegged the value of the company at around $15 per share. If this is in fact the case he and any other investors would have a big hit on their hands and I commend them for holding on and doing the work to maximize their investment.

I on the other hand looked at this situation for a grand total of 5 minutes and I run the risk of being very wrong here but here are my two cents. I never looked at the specifics of this situation as I have a very general rule regarding acquisitions. I am not an arbitrager. I don't try to make the spread between the current price and the offer price even in this case in which the investor perceives the value being much higher. When I am holding a company that is going to be acquired I will sell it and move on. I feel like often times I do not have the advantage over the people who are doing the bidding and they may value the company correctly. Furthermore, if the market perceives a disconnect between the bid and the value, the stock will often trade higher than the bid. This is not the case in SSV's case. The stock is currently at around 10.17. This does not give me any confidence in holding my position as there are often far smarter individuals out there trading in stocks than I, and often times no matter how right I think I am the stock will go the other way.

Another important factor with this stock is that it is so illiquid if you have a large position the euphoria surrounding an acquisition often provides an optimal time to exit a position without sacrificing too much on the bid ask.

Im sorry I can be of more help on this issue for I would have done it far different; however I must say that individuals will do far better research than anyone working on Wall-St. and if you have done your due diligence stick with it for you will be rewarded in the end.

General Rule: Unless you run an arbitrage fund sell your stocks when an acquisition is announced. Do not wait for the transaction to complete, far too much can go wrong in the meantime that can cause you to lose out (Ie Guidant (GDT)). Plus the return you will garner from holding on is often times trumped by better opportunities in the market.

Good luck trading this week and email me with any further questions at randommarketthought@gmail.com

Quite a Year so Far

Well it has been quite a year so far. Judging by the action in the market, it does not want to go down. I would be net long next week. There isn't enough negative to drive the market lower (save for Iran). I will be looking to pick up another long position sometime next week although as of yet nothing on my shopping list looks attractive. So I sit and wait. I dodged a bullet this week with GM (or at least I percieved it that way). My thinking behind that is I am both long puts and short the common, ideally I would like to sell my puts prior to earnings and ride the common out through the release. There is alot of risk around GM press releases. Picked up some UNH. Net return this week 1.5% versus a down week for SP 500 and flat Nas. That all I've got for now.

Relief

Impressive, they managed to accomplish nothing with their conference. It makes me so happy to see inept management at its finest. Next worry date is earnings, I believe that is on Jan 26 along with about a thousand other companies. We shall see. I surely hope the stock trades down every day until then. (this post is in reference to GM for those who didn't read the post below it)

Cringing

So I have a feeling I am going to have a very tough time tommorow. GM is presenting at an analyst day in the early AM. My screen is going to be bleeding red, while the stock is streaming green. I truly hope I am wrong, although I seriously doubt it. Well all I can do is hope they do more of the nothing they have been doing for so long, otherwise, adios says my money...

Google

I hate to acknowledge that I am even considering this; but today Oppenheimer initiated coverage on GOOG with a Buy and the stock didn't move an inch. Does that mean that maybe all good news is priced into the stock? Hell I own 20% of the number of shares as I did a year ago, but I am starting to think maybe that 20% is a little much. Tough to sell even tougher to short but sometimes EXTREME contrarianism can pay off. All I am basing this on is the action in the stock. But do I have what it takes to short this thing? Not now, not now...maybe someday though...

I dont know what to say really...

So yeah, didn't even have time to post today because I can not figure out what to do. I have made a few impulse buys in the last few days as well as some impulse shorts (and long puts) which needless to say are not all that profitable...Anyway all I want the market to do is sell off strong. And I mean strong! Its not going to happen but I have an idea of when it will here we go: The stock market is going to perform well to reasonably well for the next few months. The third FED meeting though is going to be a glorious day for the shorts. Let me tell you why. People are idiots. Yes its true people are dumb. You hear one thing enough so you assume hey its gotta be true right. So yeah here is my thought. The FED will not stop raising rates with two and done like everyone thinks, because everyone is always WRONG! On that third rate hike the risk reward to shorting the market will be so one sided I would consider betting up to 150% of my portfolio on it, or at least thats how I feel today. Who knows if it will happen but if it does at least I wrote this down so I can prove that I had the idea way back in January.


But right now, it is too tough to short. Although we may be due for a pullback gaming that will be extremely tough, and there is too much to gain on the long side. That is all for now.

The Award Goes To:

AA & MEE

For the two worst companies is a rising comodity cost environment. You should be making money as Cramer puts it "Hand over Fist" however, you're ability to screw up constantly is a tribute to truly horrific management and a complete and utter inability to execute. Way to go! How these people have jobs managing companies is beyond me...

When You Have Nothing Better Going On...

Ruth's Chris Steak House (RUTH) sent out a round of press releases to those of us luck enough to be a part of their listserv today. Ordinarily They send out meaningful or semi meaningful press releases such as RUTH reported earnings or RUTH opened a new restaurant. Today was different. Today I go this Press Release:

Ruth's Chris Steak House has added a news release to its InvestorRelationswebsite.Title: Ruth's Chris Features Fried Oysters on Seasonal MenuDate: 1/9/2006 4:00:00 PMFor a complete listing of our News Releases, visit: http://phoenix.corporate-ir.net/phoenix.zhtml?c=190038&p=IROL-news

Yes that's right Ladies and Gentleman Fried Oysters for all!!

I first looked into this company in hopes of investing in it. After reading through its filings, I realized it wasn't for me (mainly because it went public to pay off a private equity firm instead of grow the business) and decided to move on to something new. However I remained signed up for the press releases and today I was lucky enough to learn that now Fried Oysters are a RUTH. What a waste...

The Train

Do I want to step in front of the URBN train today. No not really, but payback will come all in due time for the name. Weakness could hit the company as it approaches its 50 day MA. Action tommorow will be telling. Patience...

Two Things

GM is up right in a resistance area, probably will have difficultly breaking though, I say profit from the fall.

ALNY nice run today on a press release. No surprise there, just maybe take a little off the table and buy it back later on. You know how it trades, take advantage of it.

Alnylam Pharmaceuticals Inc. (ALNY)

Current Price: $13.02

Without going into a lot of detail about what this company does I recommend that you read the first half of the company’s 10-K. But I must say the idea behind this company is extremely, extremely cool. The only problem is they don’t exactly have a working drug, they only have potential. The potential is immense. Now, I could not evaluate this company according to traditional metrics because well, they don’t make any money, they have no cash flow, no real financials that matter. My expertise lies more within identifying how a company may manipulate earnings but I will give this company review a shot. Would I invest in this company? No. I am more conservative and like to buy good companies who grow tremendously and generate significant cash flow and growth rates. I hesitate to say that this company is the next big thing; however, if they were to harness this technology, this company would be worth at least 10X what it is today. They recently began their first trials on humans for RSV (respiratory syncytial virus), and a positive outcome from this could spell $$$ for investors. They are currently looking for solutions to diseases such as Macular Degeneration, Parkinsons, Spinal Cord Injuries ( to prevent paralysis) and Cystic Fibrosis. They have a partnership with MRK that extends until September 2008, one would assume that if they don’t have a viable product by then that relationship could be at risk although right now they have suspended their relationship for Macular Degeneration. The partnership with Medtronic could be worth $21 million for the company, although it could also be worth 0 if MDT does not like the outcome. They have a strange Isis investment: the way it reads is that they paid Isis $5.5 million for $10 million, how this makes sense I will never know. The two main competitors in ALNY’s specific space are Sirna Therapeutics Inc. (RNAI) and Acuity Pharmaceuticals. This company will not make any money for a very long time barring a miracle. Revenue for 2004 was around $4 mil, while the net loss was around $32 mil.

As of the most recent quarter there has been a large uptick in R&D spending which is to be expected. In 2006 I would expect that this company will increase R&D a tremendous amount in FY2006. As a product nears viability this company’s R&D will shoot through the roof and losses will pile up, luckily that is not what this company is valued on, its all about the future for these guys. Novartis taking a 19.9% stake in this company is a good sign. But it is currently reflected in the price. I would also predict that this company will miss expected EPS loss projections this year. They are going to lose far more money that analysts estimate due to their increased focus on coming up with a drug for avian flu and the RSV potential.

How I would trade this stock: Well if I had to own this stock this is how I would play it, first, this stock should not constitute more than 5% of your overall portfolio. That is a given. It is highly speculative. Although in the context of an overall diversified portfolio this company could yield a nice return. Over the coming year my gut feeling on the stock is that it will trade higher. This stock could take an impressive trip up if the Avian Flu is discovered in the US. Not because they have a viable alternative that could help, but on anticipation that they could one day come up with something. It’s basically a hope stock, with really amazing ideas underlying it. What I would do if I owned it is build a core position as the stock trades down, and then on days that the company issues worthwhile press releases (they issue countless PR’s, in fact its unnecessary to issue this many, in general companies that issue excessive PR’s are not good companies) and the stock trades up 20-50% take some off the table. Then buy it back when the stock comes back down and people realize that “hey you know what they still don’t have a viable product”. It is essentially trading around a core position. Personally, I would miss the run up in this stock while it continues to lose money as I am just too conservative to own a speculative stock such as this, I much prefer to speculate in stocks that at a minimum make money, but to each his own. This is a very interesting play, and I must say from what I have seen I do like this company and what it potentially could one day offer.


*If anyone has any thoughts on how to value this stock email me @ randommarketthoughts@gmail.com
The only thing I can think of is a multiple on their revenue.

**This stock has at least 4 years before it may achieve an y semblance of financial success so as long as its backers are with it I would stay with it, if they bail so should you.

***This stock will probably move significantly on Jan 11th, more than likely to the north as the present at a JP Morgan Conference.

****Do not buy this stock if you are looking for an acquisition target, it is not one. They have controls in place to significantly deter that from taking place.

*****It is also not covered by many firms as this company grows and coverage is initiated it could get a boost from subsequent Buy ratings. It will be difficult to issue a sell on this company based on the probability of getting burned! FYI the earliest estimates for profitability at this company are in 2011, I think that may be optimistic.


ALNYLAM PHARMACEUTICALS, INC.
Alnylam Pharmaceuticals, Inc. is a biopharmaceutical company seeking to develop and commercialize new drugs that work through a recently discovered system in cells known as RNA interference, or RNAi. RNAi is a natural mechanism for selectively silencing genes. Genes provide cells with coded instructions for making proteins, and silencing a gene refers to stopping or reducing production of the protein specified, or encoded, by that gene. Using our intellectual property and the expertise we have built in RNAi, we are developing a set of biological and chemical methods and know-how that we expect to apply in a systematic way to develop RNAi therapeutics for a variety of diseases.

Check out the company website for more info:

http://phx.corporate-ir.net/phoenix.zhtml?c=148005&p=irol-IRHome

Next Expected Report Date: 02/13/06

The company's expertise in designing and optimizing RNAi therapeutics has enabled Alnylam to form major alliances with leading companies including Merck, Medtronic, and Novartis.

Background on RNA technology:

http://biology.plosjournals.org/perlserv/?request=get-document&doi=10.1371/journal.pbio.0020028

Filed on December 16, 2005 for a 75 mil secondary offering. The company is financed almost exclusively by selling equity stakes. The stock jumps when companies take additional stakes in the company. Very volatile.

Dec. 19, 2005--Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY - News), a leading RNAi therapeutics company, announced today that it has initiated a Phase I study in the U.S. to evaluate the human safety and pharmacology of ALN-RSV01, an RNAi therapeutic, in healthy volunteers.
RSV infection is a cause of serious disease and hospitalization in infants, the elderly, and others with compromised immune systems

NEW YORK, Dec 14 (Reuters) - Alnylam Pharmaceuticals Inc. said it received initial government funding to develop RNA interference therapy for pandemic influenza. The company said it expects to submit an investigational new drug application for RNAi therapy - used to "silence" disease-causing genes - for pandemic flu as early as the end of 2006.

9/7/2005 3:14 PM EDT
Shares of Alnylam Pharmaceuticals (ALNY:Nasdaq - commentary - research - Cramer's Take) were among the best-performing health-related stocks Wednesday, rising 43% after Novartis (NVS:NYSE - commentary - research - Cramer's Take) took a 19.9% stake in the company as part of a drug development collaboration.
Other interesting articles:

http://www.thestreet.com/_yahoo/stocks/robertsteyer/10212414.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA


http://newyorkmetro.com/lifestyle/sex/annual/2005/15061/index.html

Board of Directors: There is not a single independent member of the BOD at this company. They all have either ties with Biogen, venture capital firms, or work for ALNY. One of the founders is on the compensation committee. Not exactly what you want to see.

Alternative ways to play:
Nov. 14, 2005--Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY - News), a leading RNAi therapeutics company, announced today that it will be added to the NASDAQ Biotechnology Index effective with the U.S. market open on Monday, November 14, 2005.

IBB – is the Biotech index, much safer than individual stocks such as ALNY.

Also TINY & ARWR are VC’s that invest in Biotech, they also carry less risk that a straight Biotech play.

I might also recommend a paired trade with ALNY and RNAI. They may trade together but the success of one should more than offset the failure from another.

That Hurts

Gotta say selling GOOG today hurt. Who knows if it will work out, but the fact that I really wanted to hold it may be some indication that it is done. I've learned any time I feel good about one of my positions they tend to go the other way. Lets see if it rings true here.

BTW: Short GM again.

Google

I love Google. It is an amazing company. It does amazing things and you know what it is killing me that I am considering selling the stock right now. I have paired back my position in it considerably and am considering doing it again into this strength. It is the only prudent thing to do. Will it hit $600 or $2000 according to this guy: http://www.thestreet.com/_mktw/tech/internet/10260522.html
I don't know. But I have to say to anyone who owns this stock and has a decent gain, take some profits. I promise, in the end you will thank me.

2000 hits

Sometime today this site will have its 2000th hit, I would just like to thank everyone who has read this site. I hope it has given you something of value, whatever it might be. Email any comments to randommarketthoughts@gmail.com

The Rant

Ok now first I have to tackle this question, who writes company press releases? I understand that the majority of press releases are meant to confuse investors and I know from experience that SHLD has some of the most confusing documents around but today's press release is just ridiculous:

Holdings currently expects that net income for its fourth quarter ending January 28, 2006 will be between $570 million and $635 million, or between $3.55 and $3.95 per fully diluted share. The results contemplate an estimated $15 million of pretax gains ($9 million after-tax) from the sale of assets during the quarter.....

Now I know there are a few definitions for the word contemplate dictionary.com gives three:

con·tem·plate (kntm-plt)v. con·tem·plat·ed, con·tem·plat·ing, con·tem·plates v. tr.

To look at attentively and thoughtfully. See Synonyms at see1.

To consider carefully and at length; meditate on or ponder: contemplated the problem from all sides; contemplated the mystery of God.

To have in mind as an intention or possibility: contemplate marriage; forced by the accident to contemplate retirement.

Now I know what they probably meant here, but honestly you don't need to right click everyword and use the synonyms function, but you know what sometimes you seem like kind of a moron when you do it. Or maybe SHLD is just thinking about including gain on sales in its results...who knows. Let me ponder for a moment how crappy this company is...-11.9% Sears comps, get real, this company sucks.

GM

I am thinking of shorting the ole GM again. I did it last year but bailed before the dividend and never got back in. After the past few days I am feeling like GM @15 isn't a difficult conclusion to draw. Actually GM in bankruptcy isn't too far fetched either.

Regrets

Well here it goes again, I thought my logic was sound, with the market rallying, betting on a stock to go down is tough, so i figured with a decent gain I would take the put option off the table. Then I sat by and watched the stock drop another dollar and a half and lose out on a sizable gain. (I am refering to UARM) So why did this happen? One theory is that people wanted to sell the loser to put more money into long positions...To be honest I am not all that upset with this trade, so I will drop the subject after this post but for a moment I have to think. Did I do the right thing today. I think yes. I dont really want to be short this market, I had a chance to take a sizable percentage gain in a three day time period, so I did. I could have doubled my investment, but it didn't happen, now I have to move on. Anyway "I wish" never works with the market.

UARM

What about reversing the trade? Maybe buy some UARM common... I was half tempted to do it today but got side tracked. It may need to go a little lower, but the stock is good, it has great growth, and valuation concerns are rarely long lived when the question is raised from Wall St. analysts.

UARM Update

Exited my UARM puts. Glad I got out of that one unscathed. Whew. 33.3% in 3 days, I like it. Leverage is quite the tool. SFCC is way up today, glad to see some execs stepping down there. Looking for a new idea now, I am thinking something in the GOLD arena. It could be the OIL of 2006. Or at least that's what I keep hearing. Normally when comments like that surface, it never happens. Buy who knows, there has to be one person on CNBC who doesn't have their head up their ass.