January Trading

So for those who didn’t know already, I started getting serious into the market this January, and let me say this: With practically no background or formal education in finance/economics, in the past month, boy have I learned a lot. Some lessons more costly than others.

My intentions to start were probably what any amateur would do and just start investing in things and try to gain as much as you can in the shortest time possible, then get out. My main areas of focus would be High Tech, Pharmaceuticals and Energy (Solar more specifically) and for the first week or two I was doing pretty decent. So well that in fact I broke my own rule and got greedy and undisciplined. I didn’t really set a line between what capital I was using for long term and day trading until it was already too late, and as a result, I have at this point a good majority of it tied up for long term investing.

In any case for those wondering, here is how January faired. I know I am posting this after 3 days of February trading, but I will only focus on January.

DDD: DDD (3D Systems) was the main bulk and heavy hitter in my portfolio. The debatable leader in the 3D printer manufacturing, it seems like a stable company given expectations of growth in the 3D Printer market this year. I had been eyeing this stock for a while and waiting to jump in when it dipped. I jumped in 100 shares back in mid-January when it dipped down to $91.95. A couple hours later it fell even further to $86.55 where I doubled down another 100 shares. The following day I was compelled to buy another 100 shares at $86.09 for a total average pps of $88.20. Here is where I screwed up. I had told myself that I would drop 100 shares once I had reached my break even at $88.20 and another 100 shares once I recouped top price at $92. On the 16th, price was stable around $93 with an upward trend, and human nature got the best of me and I got greedy. Held on to all 300 shares. As fitting as it would be, DDD and the rest of the 3D market started to fall and by the end of the month we are trading at $77.7. So instead of walking away with close to $18k cash with $7.8k in DDD for total position of nearly $26k if I had stuck with the plan, I’ve got $23k tied up waiting for DDD to rebound. Will talk about February when February is done.

SPWR: Sunpower was very good to me. One of the leading manufacturers of residential solar panels. Reputable Japanese company.  Same time I bought in to DDD I picked up 250 shares of SPWR at $31.27. I had a target price of $35 for a decent 10% gain and in two days, I stuck with the plan for a cool $950 profit.

XONE: eXOne was another 3D printer company I tried to get in on. It had been pretty stagnant at the start of the year, dipped and seemed like it would break out but never did. I went in 100 shares at $57.54. With a target price of $65 at the time. This is one where I should have cut early.

RSOL: Real Good Solar is the major Chinese manufacturer of residential solar panels. Recent news indicated that they bought out Mercury Energy in China and was rebranding to RGS. I jumped in prior to the buyout for 2000 shares at $4.40 with a target price of $5 for half and $7 for the other half. China jobs report put a wrench in that and I ended January with 2000 shares at $3.95. I still think that I will be able to reach my target prices after China comes back online from LNY. I may change my target price and hold on to 1000 shares in case it does break out.

SSYS: Stratasys, the other leading manufacturer of 3D Printers. I picked up 50 shares at $121.5 to try to offset losses taken by DDD the same time the valuations started to favor SSYS over DDD. Shortly after the entire 3D market got hit hard so I am stuck with these 50 shares for the time being. I may just leave them in my portfolio as their outlook for the next year or two seems promising.

ARIA: Ariad Pharmaceuticals: OK I screwed up here. So a good friend of mine told me to buy ARIA at around $7.30 the same day DDD took a big hit on the 23rd. I was skeptical since the trend for ARIA was fairly flat over the last couple weeks and surely a 1 day jump of 10% would indicate a slight pull back the following day, At least that’s what the historical trend was. I wake up the next morning and rumors of a buyout caused share price to surge. So impulsively on tilt I jumped in 400 shares at $8.57. It peaked close to $10 and closed a little over $9. Being on tilt, I didnt want to let go of the shares when rumors started coming out that the buy-out ruomors were false. So, the price came down and now I’m sitting on 400 shares at a little over a dollar loss per share.

Watchlist:

ZIOP: Zio Phameceuticals: This one is taken straight out of the JoeBao book. They make drugs that fight cancer! Melanoma to be more specific. I think a $5 price point is more than achievable based on historical data but with prices hovering around $4 and a half lately, not sure if there’s enough skin left.

*For more of JoeBao’s market thoughts his own blog is a pretty good read http://joebao.com/

SCTY: SolarCity: Another manufacturer of Solar panels. This one American and makes products for both Residential and Commercial. With tech sliding lately I will keep an eye on this and see if it is worth an investment as the solar market is slated to heat up.

GBX: Greenbrier Companies: So these guys make rail cars. The kind that you use to ship large amounts of goods across the country. Incidentally they are the leading manufacturer of liquid containment rail cars as well, like the ones that were set ablaze due to recent collisions and derailments. Well a report came out a couple weeks back that indicated the US rail fleet was using outdated cars and should be replaced with newer better designed carriers to prevent leaks and fires. Indications would be that GBX would get a majority of the contracts if the rail companies go through with this, but it is worth keeping keeping an eye on.

AMZN: Amazon: Who doesnt buy something on Amazon these days? With recent slide and correction in the tech sector if the price is right, you can bet I’ll play on this.

BBY: Best Buy: Here is a real doozy. First off, who buys stuff at a Best Buy anymore? Or even Radio Shack? Then again, if there were no more Best Buy, where (national brand store) would people go to buy consumer electronics in person. I know Frys is pretty big in Texas and California, but what about the other 40-some-odd states? Radio Shack is planning to shut down stores, Circuit City is gone. To me there’s still an advantage of being able to see the product in person rather than just blindly buying it online. Though you can argue that you go to the store to see it then buy it online anyway. If I can wrap my head around this conundrum with shares trading around $20 and news of new management, this may be a risky play I am willing to make.

Remarks and Goals: Over the course of January I’ve paid close to 10% for initiation into trading. A lot of lessons learned and definitely big mistakes made. My goals for February are simple: (1) Try to be more disciplined in trading; differentiate between long term investing and short term hit and run and for day trading, get out at the end of the day because after- and pre-market trading can and will kill you. (2) Get back to even for the year; this one will be a bit more difficult but I think I can get there.

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