Trading update

Couldn't max out of EBAY. Got into FUEL. My problem is that my conviction with FUEL doesn't allow me to trade it which makes it a frustrating proposition.

Got out of FUEL as the ticker looked really bad. I am out till 180 days after IPO (March 25th). Then on any crazy down swing this might become a good buy but frankly I am surprised the market is not seeing the potential on this one.

Bought PLUG and it was probably the most profitable 2 and half hours I've ever had trading. This stuff may have great long term potential but is a complete crazy people stock right now. That said, I went in for all the right trading reasons yesterday and got really lucky.

Okay Also went big in on RUSL (3X Bull Russia) today. It's at 3 year lows and I think this is a real opportunity. Russia is the cheapest emerging market. Ukraine is blown out of proportion and the 3X can easily double and give more if valuations catch up. Emerging markets are slowly moving back up.

Lost some money on IBM calls that I sold in order to get into RUSL. I manage poor timing every once in a while. Just perfectly poor timing.

Updates: TCS, EBAY and FUEL

TCS: The container store. This had an analyst creating a crazy report basically worshipping the company's culture, the executives and how this is a once a lifetime opportunity. I went through their financials and they've been single digit grower of revenue and still not profitable or barely so. Shorted it in the 45 / 46's. Played the other side of the trade to make it safe (it was a mistake). Made the right call, made money but didn't maximize profits. These are all option trades of course.

EBAY: Shitty earnings. I can trade this stock now that I am not with the company any more. Same story as above. Shorted at the right time but the Icahn trade put a limit on how low this can go. Could have executed the trade better but it was still highly profitable.

Finally, Rocket FUEL: Okay this one has given me a lot of grief. After the secondary the stock crashed from 60's to 48 in a rising market. I just don't get this one. All 7 analysts covering it, rate it a Buy or Strong Buy. It has smashed revenue targets. A ton of stock has come on the market after the secondary and some guys shorting the extra float that they couldn't short before seems to be the only logical explanation. Other than that, this company has just taken a huge beating. Insiders sold 2 million shares and they diluted another 3 million at 61, which has freaked some people out. I think this company will do great in the long run (double). Just got my brother to buy this one too. They are the closest to a 'winner' in the programmatic space and I am optimistic. Of course, falling in love with one stock in the past has hurt me and I feel a bit like history is repeating. There is value in the age old adage, don't bet against the ticker. I don't have a lot of patience left on this one unfortunately. Average price 59 and on margin so losses have added up. This week is critical, what with earnings and all.

AOL and FUEL thriving

AOL is up 52% since I recommended in November.

FUEL is up 61% since I recommended it. FUEL can double from here.

Some risky bets and some good trades

Okay writing after a month.

Lots a bunch on money on the TWTR short initially but then took a risky bet by buying near term puts when it was around 70 and sold the same day for a big gain. After that I've just been selling calls as they are really expensive and then if it moves in the right direction, I sell puts to continue selling premium. It backfired slightly one time when TWTR went all the way to 56 but has been a good strategy for the most part. TWTR in the 60's doesn't make sense.

I'll wait for earnings and if they climb after earnings, I plan to again sell calls at some point. A small amount of shares come to the market in Feb and a much larger amount in May. If this stock is above 50, I am surely shorting it in some form before May. Mostly sell June calls.

The container store (TCS). Another great short candidate. I did some digging, looked at the valuations and then looked at the growth. Bottom line, the company is just not growing like Michael Kors. 6% growth doesn't deserve such a high multiple, especially considering they aren't even profitable. New IPO's are just getting bid up without any good justification. Shorted TCS @46 using puts and closing tomorrow.

JCP, now this is a risky one, but today was a good day to buy based on how the stock ended the day. My average price is 7.01 but I am more exposed than I'd like. I think this can see a quick bounce to the 8's. but can go way higher if earning show they are losing less money. Today's day started with the stock going almost 9% down because they shut stores. 'Huh', that's a reason for it to go up not down. They are shutting 33 out of a 1000+ stores because they want to get rid of the ones with low profitability. That's a good sign. Profitability is all that matters at JCP. Their revenue numbers are 'retail big' anyway. Of course there is a really good chance that they had a bad December and are having an even worse January. This is the risk. They should show that they are working really hard to get to profitability, else this stock is in trouble.

TSLA and TWTR

Nice run up on TSLA. Missed this one by a few points.

TWTR is now in insane valuation category. I shorted at 56.25. 40 day quiet period ends tomorrow. We'll see if it still stays at these valuations. Underwriters are expected to upgrade the stock with big price targets tomorrow. IMHO this will be a sell the news type of event. I will increase positions if the stock goes to lower mid sixties.

Position update

Position updates.

1. TSLA is playing out as I expected. 
2. VJET was a great short except I tried multiple times and never got into it.
3. FUEL gave me a lot of heartache after pulling back almost all the way. Latest short ratio has just been released. FUEL short shares have more than doubled from 1.27 million to 2.67 million which is almost 23.5% of the float. I am still bullish on this one and still think it is a 2.5X from these levels.
4. Covered the TWTR and LNKD short. Calls worked well for me. These companies stay short plays and you need to go in an out of your positions.
5. Sold JCP. It did great for me. 

Tesla Fire - part 2

Per my comments in the past on how to approach the TSLA stock based on the fire news, the inquiry is open now and the stock may pull back further. The hard thing about this is, that the news seems to be leaking. Yesterday TSLA was down 14 bucks on no news and today the news is that there will be an official inquiry. At this point I would buy a small position at the 200 DMA around 107. The build from there based on news. Remember, a full recall is the worst scenario but if some research can explain what the expense of a full recall would be, then there is some way to value the stock. Since it has to do with the base structure of the car that should protect the battery, it doesn't sound like an inexpensive recall.

This morning: Short LNKD at 230, TWTR at 43.54

LNKD is a fundamental short based on how big the market really is and how much more LNKD can possibly go before having to go into adjacent markets.

TWTR is a valuation short but I'll cover if I get a good price.

FUEL thriving; Glad I couldn't short VJET

FUEL is up almost 50% this week. How about that! If they can keep their story intact, they are on track for a 5 to 6 Billion market cap.

I am lucky, I couldn't short VJET at 51. Stock is at 59 today. I still think it is over valued. So we'll see how it plays out.

Why I bought FUEL?

Why did I buy FUEL? Here are the reasons.

1. The internet advertising and branding (rapidly growing) marketplace is HUGE. So there is enough opportunity. Programmatic ad buying is the future (do you own DD on this). Others like Tremor are losing market share.
2. Some numbers: Only 4 million shares were sold during the IPO. 11.3 Million float, 32.9 million outstanding and 31% owned by insiders. So a very small float. Run ups can be very quick on low volume.
3. 132% growth YOY this quarter. Okay, so this is probably the most important statistic. They are growing across all segments of their business.
4. Sell off after earnings report. The stock had a 20% sell off after earnings report that seemed to be more closely tied to the video ad tech companies such as TRMR and other video ad tech companies that have bombed in the market. The company came in with a slightly higher loss. Well, given where the market is in it's evolutionary cycle today, it is supposed to reward growth and shouldn't care if a company lost an extra 2 million. This was a great buying opportunity.
5. Valuation: We will not look at EPS but instead price to sales ratios. The company expects 2014 revenue of 426Million and market cap is 1.56B (@47.5). That's trading at about 3.5 times next years sales. YELP trades at 12.4 times sales, although this stock has higher growth and higher revenues. One reason is that Yelp is expected to be the winner in their business area but the market for video ad tech is still up in the air. Investors don't understand this business. If you are betting your money, you are betting on FUEL winning and FUEL's ad tech being better than everyone else. If this business becomes clearer and Rocket Fuel continues to win, this stock will trade higher than the YELPs and LinkedIn's of the world.

This stock can go up 4 times or so from it's current price (target 200). This can be a 6 - 7 billion dollar market cap given the above points in the next year.

FUEL: Couldn't find a good entry point but I am in

Out of YELP - Looking for an entry point in FUEL

YELP is too risky at these levels. Way too overvalued and technicals are breaking down. FUEL up big this morning on an upgrade. Need to find a good entry point here.

Entire 3D printing market space looks overvalued

DDD SSYS XONE PRLB and VJET: All these companies are in the 3D printing space. DDD has a short ratio of 28.9%. They've seen several recent IPO's. The entire market segment seems over valued at this point. 3D printing is suppose to be a super hot space but the trajectory of these stocks have been crazy. Some of these companies trade at 20 times sales. Reminds me of all the nano-technology stocks in 2004. Most of them went belly up in a couple of years.

Rocket Fuel has some juice

FUEL: Rocket fuel, recently IPO'd. They trade at 2 to 3 times future revenues barely make a loss and yet grow 130% yoy. Concerns over its profitability is overplayed. Great insider ownership, stock has dropped dramatically from recent highs. This could become a 5 to 10 bagger in my opinion.

Rocket fuel in interesting

Watch this blog for more details on Rocket Fuel

Tesla fire woes

There was a damning article this morning. Here is what it says. “It appears there’s inadequate shielding on the bottom of these vehicles,” the executive director of the Center for Auto Safety told the news service. “Road debris is a known hazard to the undercarriage of vehicles.” 

So in short, I am lucky to get out of TSLA yesterday as it continues to drop. Here are the possibilities for Tesla at this point. 
1. There might be a formal announcement of an investigation. 
2. If the investigation leads to a recall, then this can be a lot of trouble. 

Net-net: There are probably investors and hedge fund guys who are calculating all the risks for bad scenario as well as worse case scenario. What are the costs for #2. I am sure someone will be doing the math. I don't have the details on tesla shielding in the bottom of the vehicles, so I got to sit this one out. This does though have the opportunity of a buy like HP in the 11's. When HP finally took the loss for Autonomy, the stock took a big tumble that day. Tesla might have a similar day. Which means buy on the drop on the news event, as smart money has probably pulled out long before that. This is all considering there is a formal investigation in the first place. If that clears up, then there is some hope. That said I do think the stock has suffered technically and so a wait and watch strategy for now is probably right. This is a momentum stock in the end and so if the momentum is over, it won't give traders what they are looking for. 

It's a traders market

Okay. This looks like a traders market. Out of TSLA at 142.8. Trading YELP for an upside move. It seems to be at the bottom end of it's trading range. Bought at 62.17.

Bought Tesla (TSLA) at 138.29.

Wanted to short solar city but didn't. Couldn't finish my research in time. All momentum stocks are down today. I think all that money just moved to Twitter for the IPO. Too bad I couldn't short Twitter. It's current market cap is 32 billion. So for less than 1/10th FB revenues and a big loss making company, they are at 1/4th the valuation. There will be better entry points on this one.

JCP continues to look interesting to me but company's price action is strange. CEO came out and said October sales were higher yoy and that October gross margins were better than previous month. I am bullish on the stock.

Update on positions and new interests

Great spike on JCP. This stock has a high likelihood of being in the 9's (bought at 6.56). Continuing to hold. Might sell before earnings to protect gains.

JMI still a good dividend bet for the next 2 months.

AOL has moved nicely after I bought it under 34 but just bought some protection today. I am limiting upside but stock has had a really nice gain and is at the top end of it's trading range. I think this one can breakout and really is the stock to watch.

New stocks to watch: Bearish on LinkedIn. The simple reason is, it's current valuation account for the entire market space. For the stock to move higher, they need to get into new markets and win them. Either ways, growth will slow and stock will take a hit before we find out if they'll win new markets or create new ones. I'll short this above 230's.

In JCP @ 6.56. J C Penney is priced for bankruptcy. The bonds are placing chances of default at 65%. The company has secured it's cash position with an influx of 932 million (30% dilution @11). Buying right now gives you a price 40% below the last major equity infusion. The company is looking for 2 metrics to improve. Better traffic and better conversion September was better than previous months. I am in.