Tuesday, May 5, 2009

Stock Pick 2009 05 05

Lucky or not, recent stock market's dead-cat-bounce is higher than expected, so high that the technical reading triggers the signal of end-of-bear-market, eventually made me changes my previous investment strategy, i.e. sell now instead of selling 3-5 years later.  In general this is an example of emotion overtake logic.

The emotion part is my belief that this is a dead-cat-bounce; the logic part is the clear technical signal of bear-end.  So sum all up, now even if the market goes crash, it would most probably be supported at 950.  Instead of the much lower level I expected earlier.

Although 70% profit within a month seems pretty good but almost any speculator for the past few weeks would most probably easily get that return rate and more.  Should I really keep for 3-5 years, 4x return isn't really that impossible.  To really feel the difference, try imagining earning $70,000 from $100,000 vs. the potential income of $400,000.  What can you do with an extra of $330,000?

Taking profit now actually allows me to rest for the year of 2009 (this year target achieved).  However, selling off everything I have now is a bad positioning move, so I will need to start working on 'what to buy now'.

So follow the same method to screen out stocks to be analyzed on, this time I am using these rules:

1) Volume higher than 15,000
2) Price between 0.30 and 0.50

This is the list I got;

AISB ANNJOO-WB BRDB-WA BURSA-CL DUTALND EDEN EQUINE GPHAROS HUAAN IJMLAND-WA INCKEN INSAS KEURO KHSB KUB KURASIA LBS LIONCOR LIONDIV MULPHA NTPM OILCORP PICORP POHKONG SALCON SANBUMI SCOMI TIMECOM WCT-WB

Screen through their finance data (ROE and EPS), these are the 3 stocks I am watching now.  More in depth study will be needed before taking any action but I have time for that (before end of 2009).

GPHAROS : EPS chart and trend line


INSAS : EPS chart and trend line

MULPHA : EPS chart and trend line

One exception during above exercise is NTPM.  It doesn't really fall under my worth buying now rules but it is the only pick that all its EPS stays positive during the whole period.  So I am keeping this on my watch list too.  I may not be able to earn 15% from this stock, but it will be a good safe and steady keeper which I will need should I be wrong in my dead-cat-bounce perception.

NTPM : EPS chart and trend line