Peanut's Potent Plethora of Profit

[mrmarket]

Our young grasshopper carves out a quantitative market niche with some heavy duty power screens and cutting wit......

[peanuts]

My MOMO Portfolio:

CURRENT MOMO PORTFOLIO:

12/20/06 UA - $51.00
07/11/07 CNS - $38.05
07/23/07 SYNL - $26.65

(portfolio is 50% invested)

Why do I call this "MOMO" when some of these stocks are not exhibiting any rapid increase in price and volume? Why do I hold some of these for a while? The answer is simple and complex at the same time. The stocks in the portfolio are poised to appreciate rapidly from some event in the future. This event can be anything from finding support on the chart to reporting record quarterly and yearly results, or releasing news of a new product. The key here, is that good things are on the horizons. But this is usually not enough for rapid price appreciation.

Some characteristics to consider in the stock's underlying fundamentals:

1. Stocks that have market caps below 500 million when they are first purchased.
2. Shares outstanding should be low compared to the rest of the market. I like to use about 25 million shares outstanding as the limit. Anything higher than that, and there is too much stock out there to really move the price.
3. Concurrently with shares outstanding, I like stocks with ultra low shares on the float. The lower, the better. Below 6 million is great.
4. Most of these stocks should already be profitable companies that are increasing their yearly earnings, or companies which look to be improving their botom line significantly. The higher the increase in earnings, the better.
5. I like these stocks to have relatively low average daily volume. When looking at the chart, I like to see days of 3 times average volume in the near past. If these come on days when the price appreciates, it is a good indication of larger money having interest in the stock. Volume is used by me to help with an entry point.

Finding these kinds of companies is very easy. You can get free screeners from Yahoo! and some others, and you can begin making whetever screens you want. This will give a wide range of stocks which meet the above criteria, but that is just the beginning. Picking the entry price is the most important element to using these stocks as money makers. How I determine the entry point is complex and not really worth discussing here, but I urge you to ask me questions when I post a new stock in the portfolio regarding my entry price.

This portfolio has statistically done extremely well. Since I began posting about my MOMO plays, I have had 4 stocks with returns greater than 27%, 2 stocks with returns greater than 40%, and few losses. Prior to posting the results of my MOMO portfolio, I have had returns averaging 13-17%, with the usual statistical outliers.

For a reference of the past picks, please visit this thread There is better tracking of the portfolio at the end.

Below are the trading results from Aug 2006 to date (all prices are avg):
JST: Aug 18- buy $11.19, Aug 30- sell 100% $11.48, 2.59% in 6 trading days
LOGC: Aug 8&9- buy $1.974, Sept 15- sell 33% $2.70, 36.78% in 27 trading days
LOGC: Aug 8&9- buy $1.974, Sept 26&27- sell remaining 67% 2.83 to 2.73, 41.34% in 35 trading days
CADA: July 19- buy $19.90, Sept 27- sell 100% $19.70 to $19.90, -0.3% in 49 trading days
ASVI: Sept 29- buy $14.70, Oct 16- sell 100% $16.55, 12.5% in 11 trading days
USLM: June&July- buy avg $29.8961, Nov 27- sell 100% $32.00, 7.04% gain in 5 months
TIII: July 25- buy $3.08, Nov 27- sell 100% $2.30, 25.32% loss in 4 months
TGE: Oct 20- buy $9.40, Nov 27- sell 100% $8.0342, 14.53% loss in 25 trading days
AOS: Oct 31- buy $35.12, Nov 27- sell 100% $35.80, 1.94% gain in 25 trading days
CAS: Dec 20- buy $25.85, Feb 26- sell 100% $30.40, 17.6% gain in 42 trading days
USLM: Dec 20- buy $33.00, May 23- sell 100% $35.47, 7.48% gain in approx. 100 trading days
DMH: May 31- buy $20.00, June 27- sell 100% $23.00, 15.00% gain in 19 trading days

Any posts regarding the MOMO Portfolio will be marked with a big grin green smiley,

[peanuts]

The IBD Screen:

update Mar 12, 2007

Send me a private message with your email address if you would like to be included in the weekly email

Investors Business Daily is widely used by all types of investors. It was founded by William O'Neil and many of the philosophies and the stock rankings of IBD are directly from him or his results of decades of market research. IBD has been able to pick out the big stocks of our day, often before they make some of their largest gains.

IBD puts out various lists and has thier own criteria regarding the calculations for relative strength and other, more proprietary, ratings. They offer several services to subscribing wall street investors and cover options as well. The information is thoroughly researched and generates some of the finest investment ideas. Sometimes, all the information can be overwhelming to the average guy that just wants to look at a few good companies and make a simple, short-term, yes or no decision on a stock.

The problem that I see is the number of stocks that meet the criteria of their many lists. There are just too many stocks being thrown at you that it's tough picking out the few that are proven performers.

Two of the main lists which they put out are the IBD 100 and the CANSLIM Select. You must be a subscriber to receive these lists. Every Friday, they are regenerated. The closing price on Friday has a lot to do with the ranking system IBD employs. I use a combination of scans to arrive at a weekly watchlist which has been proving to be very successful. One of the criteria for the screen is that it contains stocks that are on these 2 IBD lists.

The purpose of the screen is to narrow down the few stocks which will move with the general market, but in weekly percentage moves greater than major indices. The criteria of the screen is important, but not necessary to explain in detail. What is important now, is that this screen has been producing the few stocks which are making big moves each week- usually in the same direction as the major indices.

So, this screen is good for going long, or going short- what you choose to do should depend on the overall market performance. Seems easy, right? Short these if the market goes down, buy these if the market is going up! However, I have not developed a good discipline to trade the watchlist. So far, this experiment is still in the data-gathering stages.

For past week's screen results and performance each week, see this thread

This thread details the net performance, over a 2 month time period, of the the results of one week's screen results: LINK

Just a kind reminder: Please keep comments regarding IBD and your personal views of such off of this thread. Let the results of this screen speak for itself. I encourage you to post your views of IBD on this thread: http://www.mrmarketishuge.com/showthread.php?t=1416

[peanuts]

Earnings Growth Screen:

A little background information on this screen:
This is for companies that have posted recent quarterly reports that show vast improvements from the previous quarter or year over year quarter. The screen aims to provide stock selections which are turnaround stories or high growth/low price stocks. The first criteria for the screen is that current earnings must have increased 35% or more from legitimate organic growth within the prior quarter. Companies that report 1 time gains that are the main contributing factor for their earnings increase are excluded. Companies that are just reducing their losses are not completely disregarded, but there is a preference to companies with a proven track record of making money.

Here's a quicklist of the stocks which have been screened and compared and which look to be the strongest of the strong, fundamentally. I call them "The Greenies":
AA AANB ABC AGP AHM AMR ANEN ATRI AVT B BRKS CCBL CCF CCRT CGX CI CITP CNA CPII CPO CRAY CREL CYNO DFZ DWSN ENPT FADV FRS FSTR GDI GDI GLYT GTIV HERO HP HURC IP JAH JOB KELYA LDL LPNT LTR LZ MERX MKSI MRVC MWRK NEWP NLS NOV NPO NSIT NVLS NWFI NYER ONNN PCU PD PENX POPEZ PSTA RDN RKT SIF SMTL SRR STA STFC SWK SWKS TAC TAP TDW TRCI TRH TRT TUP USAP USLM WCG WGOV WLT

Technical entries for the stocks can be discussed later, if there are any good possibilities.

Here's my top 6 for the current quarter:

MERX profile / chart / key statistics

PENX profile / chart / key statistics

SMTL profile / chart / key statistics

LZ profile / chart / key statistics

CCRT profile / chart / key statistics

NPO profile / chart / key statistics

Past Screens:

Q3 2006 final 5
Nov 5- AP B CKH RBC TWIN
The Greenies- ADM AGII AMD ANDE ANR AOS AP ASPV B BHE BRNC CAS CGX CIR CKH CLDN CNA CPSS CPX CRDN CSS D ENTG FO FSII GAIN GFIG GIFI GLBL GMRK GRC GSBC HMN HOS HS INTT KAI KAMN KTCC LDL LDSH LMIA LUFK MEA MOLX MYL N NC NCX NEXT NOV NPK NRG NTG NVLS ODP OIS OMG ONNN ORH OS PATK PCU PDC PDE PDS PGTI PH PLXS PNM PTEN RADS RBC RCII RDC RJET RLI RS RTEC RUTX SCRX SFY SHOO SM SMG SPTN STLD STTX TBWC TGI TRN TSTY TSYS TWGP TWIN TWPG UHCO UNP UNT USAP USLM VMI VSH WDC WFBC WHQ WLSC WLT WSCI WTS ZEUS

Q2 2006 final 5
Aug 5- GMRK LOGC NPK SPSX VVI
The Greenies- AB ANNI APC ASVI ATW BHI BRBI CCJ CNXT CPX CSAR EEP FKFS FRNT FSS FSTR GGC GMRK GRC HRZ IDXX INSU JOB KDN LOGC MFNC NPK ODP ORH OS PTIX RIC RIV SPSX SRI SRP TDS USLM VSE VVI

--Additions to this post or any comments regarding it will be marked with a lightbulb symbol

[peanuts]

My Weekly Watchlist

***this page is no longer updated***

March 12, 2007

If you are interested in knowing what I am trading, it would be best to contact me on Yahoo! Messenger, or send me a private message.

[peanuts]

The secret to winning:

Memorize this:

[Lyehopper]

Just a kind reminder: Please keep comments regarding IBD and your personal views of such off of this thread. Let the results of this screen speak for itself. I encourage you to post your views of IBD on this thread: http://www.mrmarketishuge.com/showthread.php?t=1416

You are a thread Nazi dude.... Now, how boring would this forum be if Louetta had similar thread rules and regulations?

[peanuts]

You are a thread Nazi dude.... Now, how boring would this forum be if Louetta had similar thread rules and regulations?

Lyehopper, I will remove this message. But, the moment I begin to have a bunch of crap on here about IBD, I am going to revert all questions and comments directly to you. I just don't want to deal with the crap that some people feel is necessary to say about IBD, so that is my reason for being a "thread nazi"

Some people like their women to be dominant... And, if Louetta asked kindly to refrain from something with which she did not want to associate, I would respect her request. I hope she's reading...

[Lyehopper]

Lyehopper, I will remove this message. But, the moment I begin to have a bunch of crap on here about IBD, I am going to revert all questions and comments directly to you. I just don't want to deal with the crap that some people feel is necessary to say about IBD, so that is my reason for being a "thread nazi"

Some people like their women to be dominant... And, if Louetta asked kindly to refrain from something with which she did not want to associate, I would respect her request. I hope she's reading...

So if you don't want to "deal with it" just ignore it Peanuts. I can't remember any other member ever setting posting guidelines for a thread before that's all.... Well.... on this forum that is... The "Market Millionaire Forum" has the entire Gestapo over there.... But HEY!.... What ever makes you happy I guess.

btw.... Why would you remove your post anyway?

[peanuts]

So if you don't want to "deal with it" just ignore it Peanuts. I can't remember any other member ever setting posting guidelines for a thread before that's all.... Well.... on this forum that is... The "Market Millionaire Forum" has the entire Gestapo over there.... But HEY!.... What ever makes you happy I guess.

btw.... Why would you remove your post anyway?

Lye,

What's wrong with a little guidance? Those people over there at the "Market Millionaire Forum" are commies and censor each other. I don't want to be a commie. Do you want to tell me something about IBD?

I didn't mean that I was going to remove my post. I should have stated, "I am going to remove this message from future posts" I'm not going to remove them from the posts which already have that messsage, I just won't be including that message in any future posts.

[peanuts]

Insider Tips

If you ever get an insider tip, what should you do with it? What kind of legal implications are there to acting on a tip, if any?

[billyjoe]

Peanuts,
It depends upon whether or not you are friends with/ have contributed to a certain political party or not. In the case of Martha Stewart, a gain of say $30,000 could cost you a year in the big house. On the other hand Linda Lay profits 1.5 million and retires as a grieving widow with millions and the subject is dropped and don't worry, the unnamed politician will pretend he never knew you. A win/win situation.
-----------billyjoe

[IIC]

If you ever get an insider tip, what should you do with it? What kind of legal implications are there to acting on a tip, if any?

The consequences are worse than you want to deal with. Which begs the question...What constitutes insider info?

Let's say ABC company is having a secret board meeting where they are discussing plans for a hostile takeover of XYZ co. A woman from the executive kitchen enters the room to bring in some coffee and donuts. She overhears the plan.

She proceeds to mention what she heard to her sister who just happens to be your wife's best friend. The sister mentions it to your wife and your wife tells you.

The next day you back up the truck on XYZ co. A week later ABC announces they are taking over XYZ and XYZ shoots up 50%.

Are you guilty of insider trading?

...Doug(IIC)

[billyjoe]

Peanuts,
Did you see the "Monk" episode where the previously deaf guy was reading lips of the brokerage house ? I think people ended up dead.

------------billyjoe

[peanuts]

Are you guilty of insider trading?

...Doug(IIC)

No.

When does the chain end... with the kitchen staff, or with the person who buys a stock before the major announcement?