Our XONE purchase from five days ago is up more than 10% as the stock is up another 6% today. I’m holding it steady as that purchase is part of my long-term 3-D Printing stock basket. Will have a final decision on what I’m going to do with my DDD part of that basket tomorrow. DDD’s up 25% since its lows the morning it preannounced ugly earnings and guidance in a hype-filled press release. That’s a classic example of why not to sell on emotion, as you know I was really angry at DDD’s management that morning. Emotions are the enemy of successful trading and investing. Now we can make our decision on DDD with a clearer head and more capital.
In other trading news, I’m considering buying some puts for a second go-round on $TSLA as its up to nearly $200 a share to new all-time highs. We made a killing in our last go-round with the $TSLA puts as the stock got hit big in a temporary high-flying stock deflation. I continue to think that at some point in a few years, this stock will be a small fraction of this current valuation, but the question is timing. That said, I think buying some puts when its spiking like this is a good strategy for hedging against another high-flying stock deflation, given all our longs and gains in our own high-flying stocks like Google $GOOG, Facebook $FB, Sandisk, etc.
I’ll probably wait for a pullback before trying to just time a top on $TSLA here and I’ll let you know when I make the move. Just giving you a heads-up.
A flat market for today and for the rest of the week would be about according to my expectations for a temporarily range-bound market as laid out for you last week. I’m in patience mode for now, letting my mostly long portfolio do its work for me and ready with cash if we get a pullback of another 5% or so from here. If you think you have an edge on a “better than” or “worse than” earnings report in the midst of this ongoing earnings season, this is a good environment for trying to game that for high-risk-tolerance traders. This is, if you think you know a company is about to report a FB-like or AKAM-like blowout earnings report, I’d look to use a tiny bit of capital in some near-term slightly out of the money call options that would pay off big if the trend of good reports spiking individual stocks continues. And vice versa, if you think you know a company is about to report a $TWTR-like or $DDD-like disappointing earnings report, I’d look to use a tiny bit of capital in some near-term slightly out of the money put options that would pay off big if the trend of bad reports crashing individual stocks continues. The markets don’t always react to earnings in this kind of way, but this earnings season has seen this trend play out rather clearly, as I’ve noted.
Now for some must-reads.
I was calling Blackberry’s platform “doomed” back when the stock was above $100 a share and long before it was cool to do so. My Trader’s Deep Thought of the Day is this: As outlined in last week’s “Why we own Facebook and not Twitter ,” Twitter’s platform is to Facebook’s platform as Google’s Android platform and Apple’s iOS platforms are to Blackberry’s platform. That is, Twitter’s lack of innovation and eventual loss of critical mass to more innovative platforms like Facebook’s and newer platforms like Scutify (Cody is the largest shareholder in Scutify‘s parent company, Wall Street All-Stars) makes “doom” a possibility for $TWTR the stock.
Zynga seals $527 million mobile game deal, axes jobs in revival drive – I liked $ZNGA a lot when it was closer to its cash balance (see: What you need to know about Zynga July 2, 2013, for example). That cash balance took a big hit when they spent all that cash making the purchase that sent the stock up like this over the last three days. As usual, I prefer to be at odds with conventional wisdom and this spike after that purchase is exactly that, I suppose. I’m likely to trim some down just a bit. $3.5 billion valuation for $ZNGA right now. We’d bought the stock under $3 as a “never-ending call option” on the company, and at $4.50 it’s still priced like a call option, I guess. Mobile gaming gonna be tough to make money on, I do think. Like I said above though, I own $ZNGA from below $3 as a never-ending call option on the company.
Flappy Bird and Facebook Paper Show Apple Still Dominates Google’s Android Where It Matters Most – 13 bids for a $TMUS $AAPL iPhone 5S with Flappy Birds installed. My wife has Flappy Birds on her iPhone 5S. Will be selling her iPhone today if these things are actually going for thousands of dollars. LOL
Terrific insights for traders and investors in his latest –@LunaticTrader “The 60% rule http://wp.me/pJ3wf-ql$SPY Why I am never more than 60% confident in any of my methods, cycles, indicators or forecasts…”
Bitcoin Flash Crashes, Drops By 80% In Seconds – I totally jinxed $BTC when I wrote “That $BTC bitcoin, a “too volatile a currency” sure has stabilized of late, eh?” More seriously though, remember when I told you guys that bitcoin would bounce between $500 and $800 or so for a while? As I’ve said before, with bitcoin up huge from my initial buys, my advice is that if you’re still wanting to buy bitcoins, I’d start with only a small fraction of a full position in bitcoin.