Tag Archives: Stocks

CitiGroup – How I Love and Hate Thee

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I know this was so last week but CitiGroup is buying Wachovia’s banking business.  Whether or not its a smart move remains to be seen but things *might* be turning around for this bad boy.  Any glimmer of hope is welcome news to long term shareholders, like myself.  What’ll make me feel really good is if CitiGroup (C) can get back above the 50 WMA.  At least my $20 average cost positions would offset my $40 average cost positions.  :)

Update: I must be cursed.  Right after I posted this, news comes out that Wells Fargo wants to buy Wachovia in its entirety.  Ugh!

Going Off The Tracks With Greenbrier Company (GBX)

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A long time ago, as I was searching for some good long term infrastructure plays when I came across The Greenbrier Companies (GBX). Here’s what they do, from their company overview page:

The Greenbrier Companies, Inc. (Greenbrier) is engaged in designing, manufacturing and marketing of railroad freight car equipment in North America and Europe and a provider of railcar refurbishment and parts, leasing and other services to the railroad and related transportation industries in North America.

I work in the railroad business and I believe that railroads are going to be a big business in the next few years as we try to find more efficient ways of moving freight long distances. Depsite my rosy outlook for the industry, GBX’s stock chart stinks.

It looks like the stock has been in a downtrend and last week shares were down over 7% as Greenbrier (GBX) took a big tumble on news that Ichan ended discussions with GBX on a possible “business combination” with American Railcar Industries Inc (ARII).

After I read that tidbit of news I’m staying away from both companies. When Carl Ichan gets involved, you know that there are problems with the company! Carl is a smart guy but he’s out for himself.

PS: If you ask me, GBX is probably going to test the $16.03 low back on Jan 23, 2008!

Lehman Brothers Holdings (LEH) – The Other Shoe?

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Ever since the Fed bailed out Bear Stearns a few months ago, I began to wonder who’d be the next investment bank to fold. It’s looking like the other shoe has dropped and the mystery bank is Lehman Brothers (LEH).

Now I don’t know if LEH will implode like Bear Stearns did, its desperately trying to avoid that and by selling assets to cover its write-downs, but I suspect that LEH will come out this situation extremely bloodied. Still though, Bear Stearns thought it would survive too.

No matter what happens to LEH, its a pretty forgone conclusion that a test of the low ($20.25) on March 17th is coming!

Any breaks below that low and its over Johnny.

A Review of Emcor Group Inc (EME)

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I posted my stock analysis of Emcor Group Inc (EME) on February 2/25/06 right before I went long at $24.83. It promptly decided to fill the gap and head lower but I still held on because I like the long term infrastructure play. What can I say? I’m a die hard Civil Engineer!

Well after holding on through the next 4 months, I’m sitting on a small gain of 13.8%. Nice! I goes to show you that this isn’t a stock market but a market of stocks, the trick is to select the right ones.

Citigroup Inc (C) – I Hate Myself For Buying It!

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I’m either stupid or a glutton for punishment but I bought 10 additional shares of Citigroup (C) yesterday for my Roth IRA account. I figured that C was at its bottom and wouldn’t go lower than $20 because my recent modeling is showing a strong pull toward a higher price, but it didn’t listen to me! I went long at $20.15 and it closed at $19.60. Sheesh!

I’m still long C in my long term holdings and loving hating it! :) For what its worth, here are some price targets for Citigroup (C) I developed using Riskamp.

Upside Price Targets: $22, $27

Downside Price Targets: $17, $12

Apple Inc, (AAPL) Neural Net Model

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I built a quick neural net model for Apple Inc (AAPL) and found it to be a pretty good at predicting price direction. Reserving 15 days for testing, and testing the signals for the past 30 days, the model had a 22.47% rate of return (gross).

Right now the model has issued a SELL signal for last Friday’s open and remains short.

I hope that my readers have downloaded the 14 day trail version of this software and are testing it out for themselves. Check out my videos on how to use this program and create your very own stock neural net models in minutes.

Time To Buy The Malaysia iShares?

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Actually its a time to SELL any positions you have in the Malaysia iShares (EWM). My neural net model issued a SELL signal for today’s open. Your estimated gross return for the most recent position is about 1.6% (not incl fees and commissions) based on yesterday’s close.

I really like EWM and have traded her several times in the past and I’m looking for the next BUY signal from the neural net model to go long. The trick I learned to trading EWM successfully is to always use stops and trailing stops, because EWM can change in an instant!

I hope that my readers have downloaded the 14 day trail version of this software and are testing it out for themselves. Check out my videos on how to use this program and create your very own stock neural net models in minutes.

Exxon Mobil Gives A Buy Signal

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Exxon Mobil Corporation (XOM) has been thrashing around for the past few weeks on some high volatility. One moment the price of oil is at $90, the next its at $111, and now its around $100. Although XOM is mostly a refiner, the price of oil affects its profit margins and in turn the expectations of investors/traders.

SNM-XOM-032508Loading up my Exxon Mobil neural net model this morning I find that its giving us a BUY signal for this morning’s open. This neural net model has been pretty profitable over the last 60 bars, its up over 11% (not including commissions/fees).

I’ve been using Stock NeuroMaster since the beginning of the year and have been very happy with it.  I owe my readers a tips and tricks post on how I use it generate these BUY and SELL signals.  If I have time I’ll write up the post over lunch!

GE Finally Moves

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GE-032408I’ve been riding General Electric (GE) up and down for the past year and it looks like it might finally be heading back up. My GE neural net model gave a solid BUY signal on 3/17/08 for the following open and a HOLD signal at yesterday’s close. This will work out nicely if a market bottom was put in place on 3/17. If.

Now I have to check my EME, C, XOM, and NE models!

My Trading and Investment Strategy

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Bull.jpgYesterday I got a great email from Digital Dude who asked me why I didn’t use a stop when I went long Citigroup @ $42/share and does buying more, now, make it right? I responded by saying that my strategy for long term is different than my short term one. Soon after I posted my reply I realized that my answer wasn’t very clear to Digital Dude and my readers.

Simply put, my strategy in my 401k and IRA accounts is vastly different than my trading accounts, both for stocks and Forex. For my retirement accounts I like to market time the markets (buy in panics, take profits during euphoria), establish long term positions (5 years or more) in specific stocks like XOM, GE, and yes C! I choose these stocks on fundamentals and sentiment mostly and because I believe they’re going to be winners 5 years from now.  Just like on my mutual funds, I don’t use stops when entering these positions because I expect to be in them for a long time.  I’m always net long in my 401k and IRA accounts.

Sometimes this strategy backfires on me, like it did on Citigroup (C). So why buy more? My long term outlook for C still stands, I think its a great company despite its bad decision with its subprime investments. Now that the sentiment is even worse, rumors of another $18 Billion write down are floating around and fundamentally its become more attractive, I’m looking to add a few more shares to my 401k account. My exit strategy for these stocks will probably be bequeathing them to my grandchildren upon my death.

My trading strategy is entirely different. I use my neural nets to determine Forex trends or potential breakout stocks, I swing or position trade them, and I use stops! I typically place these stops using my Monte Carlo simulations. This works extremely well in the Forex markets I found out. My exit strategy on these are within a few days and occasionally weeks.

question.JPGJust a word of caution, my trading and investment strategies work for me but they may not be right for you. I’ve learned the hard way over my trading and investing life what works for me and what doesn’t. You’ll have to find your own strategies.

The Boeing Company (BA) – Flying High or Crashing?

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The Boeing Company (BA) was flying high for a while but recently has been dragged down through this market correction. BA is generally a popular stock and its even been showcased on Wallstrip last week, right before they lost a $40 billion dollar contract to their rival Northrop Grumman. This is a slap in the face for Boeing because Northrop will be using the Airbus’s (their main rival) plane design to replace the Air Force’s aging in-flight fueling planes.

Fundamental Analysis

S&P currently rates BA as a 4 star company and was downgraded from 5 stars at the end of last year. BA pays a $0.40 dividend, its gross margin is 16.1%, net profit is 6.1%, and its PE ratio of 15.8. It has an ROA of 7.3%, an astounding 73% ROE, and a ROI of 16.4%. BA’s earnings grew over 83% for the past year with last year’s earnings being $5.26. Analysts expect BA’s earnings to grow to $5.98 in 2008 and $7.15 in 2009! So far BA looks pretty good and with its recent price pull back, but is it a BUY?

Technical Analysis

The technical picture for BA is so-so on the weekly charts. After peaking around $105, BA has pulled back to the $80 level and below its 50 WMA. It’s looking short term Bearish to me but long term it’s still Bullish for one simple fact, in my mind, it’s above the 200 WMA. But is it a Buy?

BA-022908

Neural Net Signal

SNM-BA-022908My BA neural net model issued a SELL signal on 2/26/08 to open a short position and it remains short going into today’s open. According to the neural net, it’s not a BUY but a SELL!

 

Price Targets

My Monte Carlo simulation indicates a downward bias for BA at this moment. That’s probably why the BA neural net model is short! The short term downside targets are: $78, then $71, and then $64. The most likely objective is the $71 level. Short term upside targets are $85 and $92.

Bottom line

I like BA for my 401k as a long term play but I’d wait to see if BA keeps selling off as indicated by my neural net model and my Monte Carlo sim. If it does and reaches the price objective of $71, I’d look to BUY for my 401k but in the meantime, do nothing.

Disclosure: No positions