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Trade Alert: Time to get a little more aggressive

May 11, 2012 by Cody Willard Leave a Comment

It’s fried-day and I sure know a lot of traders and investors who truly feel fried now. The markets are set up for another ugly open this morning and it looks like they’ll be opening at 3 month lows.

As you guys know I’ve been waiting to put much money back to work and I plan on putting some more orders in this morning, including getting more aggressive by using some call options in addition to stepping up the aggression in my common stock purchases too. To be sure, if you don’t want or know how to trade options, you can also just continue to scale into some more common stock but be a little more aggressive now than you have been in your scaling so far. If you were buying $10,000 of stock to tranche into it last week, maybe look at $15-20,000 in the trances you buy today. But again, we won’t nail the exact bottom and it’s a fool’s game to try, so stick with buying and selling in tranches (to further explain — a “tranche” in this sense means you were buying maybe 1/5 of how much you eventually want to own in each stock and since you’re looking to get more aggressive now as the sell off is giving your lower prices, you step it up to 1/3 of how much you eventually want to own).

Anyway, the point is that I am going to put some more money to work today. I’m going to start with buying some FFIV calls, dated out into January of 2013, with strike prices from $120 to $130 or so. I’m also going to add to my Nuance common stock this morning. The company reported earnings and guidance that were essentially in line to better than expected, and the most important element of last night’s report and guidance was the topline strength. I don’t care as much about earnings in an early-stage company at Nuance as we do at a later stage company like Google where you want to see the bottom line growing even faster than the topline. And I’m also buying some more ZNGA into the teeth of its continued sell off today. We’re down about a buck on the initial tranche we bought and I’m going to buy more now than I did then as part of the more aggressive stance I’m starting to make.

It sure feels panicky out there finally. Doesn’t mean the bottom is in. But you want to buy other people’s panic, just like we were selling other people’s greed back at the highs.

I’ll be back with at least three more posts today — headlines and latest positions and a summary of this week’s trades in later posts today.

 

 

 

 

 

 

Related posts:

Trade Alert - Buying a full-size tree tranche
Trade Alert - Like the Pink Panther, looking to sneak in (ahead of the Street) once again
Trimming Roku, Tough To Buy SpaceX, Amazon Lagging, Etc
How the Apple Watch changes everything (PLUS Trade Alert: BKS)
Speculative Idea: Immersed Virtual Reality
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Filed Under: Trade Alert

Disclosure: At the time of publication, the firm in which Willard is a partner and/or Mr. Willard had positions in some of the stocks mentioned above although positions can change at any time and without notice.

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This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or cryptocurrency or token any other product or service by Cody Willard or any other third party. Furthermore, nothing in this is intended to provide tax, legal, or investment advice and nothing in this should be construed as a recommendation to buy, sell, or hold any investment or security or cryptocurrency or token or to engage in any investment strategy or transaction. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.

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