Well, its been quite a while since my last post, but I want to keep doing this so here it goes...I have closed all the previous positions I had (from previous posts), although I have been in and out of gold stocks PDG and GG. I'm currently long GG and plan on holding. I expect $525 gold (at least) in the next 9 months or so. I think the economy will continue to be held down by potential inflation, higher interest rates, and the energy cost Goliath. I have a feeling even a moderately cold winter will create havoc in the markets due to dramatically higher natural gas prices and energy prices in general. So I'd be long gold and short the dollar and be careful trading gas and oil. There's my macro analysis. And I'm pretty confident that those are safe positions to take and would limit your downside risk in a mediocre to down market.
From time to time, through reading and research I learn of potential risky plays. I like to play these somewhat carefully though. I look for small tech or drug stocks that have a lot of potential and I use technical analysis (MACD in particular assisted by RSI) to determine proper entry points. I always, always use protective stops set at 7% down. I like to take large positions so playing these and keeping my risk limited is essential. Some of my favorites to play (and I've been in and out of these two or three times during the past year) are CKCM and TKO. Currently I don't really see anything technically that I like but they are both in a spot where they could breakout technically at any point so I'll be keeping my eye on them for news and a breakout of the MACD. I've made a good deal of money in TKO trading using technical MACD breakouts. More interesting to me is the promise of a small biotech with a monster of a potential drug, Atherogenics (AGIX). This company has a plaque (as in the stuff that clogs arteries and is responsible for the number 1 and 3 killers in America today) busting drug in phase III trials. The drug will be a first-to-market drug of its kind if and when approved (anticipated to be mid 2006). The drug has already impressed in its phase II trials, showing large reductions in plaque buildup in major arteries. The stock is currently priced at quite a discount to its potential at $16. Some estimates say the drug could be a multi-billion dollar drug in the not-to-distant future. I really like this stock's potential and that coupled with some rumblings of a potential buyout by Merck should protect the stock's downside barring any unforeseen disappointments in the drug's trials. I plan on adding to this position considerably coming up.
My current weighting is about 80% risky (AGIX and potential plays with CKCM and TKO), 20% safe (GG and other plays discussed in the previous paragraph). I'll keep you up-to-date on these, although I plan on holding AGIX at least until a buyout or the drug completes phase III sometime next year.
Thumbs up - Colder weather. The summers here in Baltimore are getting to be too much.
Thumbs down - Rafael Palmeiro (as if cheating and lying weren't bad enough he had to sellout his teammate, Miguel Tejada. Good riddance.
Back soon hopefully.
