Update: See the latest posts about stocks to buy from BloggingStocks.After nailing the top in Apple (NASDAQ: AAPL) and warning investors this would be a painful year, I've been getting hundreds of emails from people asking me what to do next? As if suddenly after two correct predictions, I'm Nostradamus or David Blaine!
Make no mistake, I'm neither a forecaster nor a magician, I'm just a trader who bases his decisions around these key elements: a distrust of everyone and every company on Wall Street (made easier by the likes of MBIA (NYSE: MBI), E*Trade (NASDAQ: ETFC) and Countrywide Financial (NYSE: CFC); a respect, bordering on religion, for charts and a quick trigger finger if the charts turn against me. I know people want longer term predictions, but I believe those to be 100% guessing games and potentially hazard to your investment health. Pregnant women should avoid them at all costs. Just kidding, it's fine for some people, but I like to make my predictions and cash out, so I can enjoy stress-free weekends if you catch my drift.
So, here's what I see right now: two weeks in and we're already halfway to my 10%-down market prediction, and Apple is down 15% (take that you stereotypical cheerleaders, go date some football players)! The markets are definitely rolling over, and while it's usually a long, drawn-out process, the charts seem to have little concern for what's normal as all the major indices have formed perfect head-and-shoulders patterns (a very bearish sign) and investors are rightfully freaking out.
Maybe this environment will better help you to understand that short selling is as important an investment strategy as a backhand is in tennis. I'm a small-cap trader by profession and disposition, so lately, I've had success shorting into strength, stocks like Akeena Solar (NASDAQ: AKNS), Solarfun (NASDAQ: SOLF) and DayStar Technologies (NASDAQ: DSTI).
The financials are definitely a mess. I love how the value folks are enduring the pain by rationalizing that stocks like Morgan Stanley (NYSE: MS), Merrill Lynch (NYSE: MER), Citigroup (NYSE: C) are "becoming better values." Do they not see these stocks just broke through massive support levels? Sure, it's tough to keep shorting here because you risk getting caught by a squeeze orchestrated by some desperate finance types who go out of business in markets like these, but that doesn't mean you have to keep buying yourself into oblivion!
Instead, I'm considering buying small-cap companies like Sigma Designs (NASDAQ: SIGM), Taleo Corp. (NASDAQ: TLEO), Concur Technologies (NASDAQ: CNQR), BE Aerospace (NASDAQ: BEAV), Nvidia (NASDAQ: NVDA), Vistaprint (NASDAQ: VPRT), Lululemon Athletica (NASDAQ: LULU), EMS Technologies (NASDAQ: ELMG), T Rowe Price (NASDAQ: TROW) and Dynamic Materials (NASDAQ: BOOM) because their only sin was overvaluation due to solid business growth. But before I buy, I'd like to see some more panic or basing, because as the yesterday's market proved, early morning and mid-day strength does not an up day make. And, if and when I buy, I won't hesitate to sell, if the charts continue their free fall, as false bottoms are aplenty.
DISCLOSURE: No positions as of yet.
Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund.











Reader Comments (Page 1 of 1)
2-01-2008 @ 12:47PM
john murphy said...
another stock that will be having trouble in the near future is stage stores, as a protest outside there 3 GA. stores is being planned by several sub contractors who cannot get paid.
1-09-2008 @ 12:35PM
lil said...
VistaPrint should not be invested in. I just found numerous complaints on consumer affairs about the company's unethical habit of unauthorized charging and sharing of its customers' private information with third parties. You can read more about it here: http://www.consumeraffairs.com/online/vistaprint.html. In reality, any ethical investor should not put money into VistaPrint, but rather should pull his/her money out of it and find a better stock.
1-09-2008 @ 12:39PM
tim said...
LOL, you're looking for ethics on Wall Street? Yeah right! C'mon, I say the more unethical a company, the more long-term short sellers like you will be in the stock, thus leaving it wide open for short squeezes and bounces. Thanks for replying, you just moved it up one notch on my to buy list!
Tim
http://www.timothysykes.com
1-10-2008 @ 7:56AM
nikolatroev said...
This guy is total joke. A few months ago I heard an interview with him and noticed how nervous he got when he started making things, his voice going pitch high. However, he has the the luck to keep talking at increadible speed, sellling,selling, making up,promoting just like Cramer. What he did in this article is run a Worden Softtware with the highest growing stocks >30% EPS and hands it to you. All the rest of his gibberish is made up:
1.the hundreds of investors that asked me what's next (never mind that his style is completely unclear and for all we know he inherited some money)
2. Now we know he is making this $2 mill by selling you books and overhyping his "increadible trades".
3."But before I buy, I'd like to see some more panic or basing" Ok, so later you will tell us you bought and how will we ever know if you really did.
Enough with your hype, why don't you analyse one stock coherently instead, and sell me something I have not seen before? Thanks.
1-10-2008 @ 8:07AM
tim said...
Cool, the last comment gives me a chance to teach a few more lessons:
1. I have a high pitched voice, deal with it.
2. Inherited my money? LOL, I inherited a few thousand, but it took hard work, dedication and thousands upon thousands of stock trades to turn that into millions of dollars-- read my book, it details my rise
3. I gave you two specific things that had to happen before I bought, neither of which occurred, so I haven't bought as of yet. Visit my blog and you'll see I detail ALL my trades.
Next time, do some research before you throw out some accusations
Tim
http://www.timothysykes.com
1-10-2008 @ 9:58AM
nikolatroev said...
I think you should " teach lessons" those like me who came here with $3000 and made it into $5 mill without beating the drumms and write a book about it. Because everyone that buys your book and attempts it will loose money. That book is garbage and you know it. In reality you are not making money with the strategy you are describing because it is not working. If you can analyze your methods, you will find out that you are making money with straight forward trend trading. However, you need to describe this strategy so all the suckers out there buy into it and since it doesn't really work (trust me I am no chicken in the market) noone seems to know how to ask questions. In fact, noone seems to tell you that you are total sellout and too lazy to get a real job. That said, combining Darvas, hedge fund and American Pie into a book is all about making "codewords" buzz and sorry but you are not "teaching" peoeple how to make money, but the poor guys will burn their cash following your made-up half-disclosed strategies that are mostly luck.
1-10-2008 @ 10:07AM
tim said...
LOL, I love how people rip on me writing a book since I "only made $2 million". What they don't understand is that I'm just trying to help people learn from my experiences, both good and bad, so what I lack in earnings, I make up in brutal honesty. And thanks to the success of the TV show I was in, I get bombarded with emails asking the same questions--the book just makes it easier for me to explain my methods.
As for my strategy not working, just visit my site and see I'm up 20%+ since November, I never use leverage or options, but, I'm also not a great timer and I make plenty of stupid mistakes. The key is that I detail ALL my trades for everyone to see, so you can learn. If you turned $3k into $5mil, I'd love to see your strategy too as I'm not only an author, but a publisher too, so while you might not have a TV show for exposure, your returns should make it quite an entertaining book. Email me tim@timothysykes.com, if you're interested!
Tim
http://www.timothysykes.com
1-10-2008 @ 1:07PM
nikolatroev said...
Interesting. I like that you are positive, but tell me, between being a publisher, a writing star, a movie star, a trader, a talker - when do you really have the time to trade? And if you want to help people, why bother when there are mutual fund managers that have outperformed the markets for a long period of time with consistently proven strategies.
Isn't the SEC after you for penny-pitching stories?
1-10-2008 @ 1:12PM
tim said...
I'm the hardest working guy you'll ever meet, I make the time to do everything. And, I've found the most success in my trading when I don't watch the markets every day tick by tick, instead, checking in every now and then, waiting for any worthy opportunities.
And, who cares about outperforming the market, I come from a school where I'm in this to get rich, not make 20%/year. Individual investors have been brainwashed into thinking they should manage their money like a $500 million fund and take 40+ positions.
Even if a mutual/hedge fund makes 50-200%/year, their investors don't learn because they don't disclose all their trades/mistakes/lessons. That's where my new fund, TIM, short for Transparent Investment Management, comes in. I believe the stock market is great not just because of the great wealth it's able to great, but for the lessons it teaches, as that is the main point of my book because I value my losses even moreso than my gains because they have taught me much more than my gains ever have
Tim
http://www.timothysykes.com
1-10-2008 @ 4:36PM
nikolatroev said...
Thanks for the interview. By the way you are somewhat different then these other kids - like Cramer, Rob Wallaston , Bo Yodder, - all you kids are nuts, but as long as you are looking for ways to grow - "a flower is a flower and does not need to tell the world that it is beatiful"
1-17-2008 @ 1:52AM
carlo said...
cpkpy , hokcy, ahony, eric, f, gm, buybuybuy
1-17-2008 @ 1:40AM
carlo said...
naps