NBR a buy now?
Hi Paul,
I have a few suggestions which might help your market timing.
I, too own NBR. Actually, I bought Dec 22 1/2 calls on the advice of my broker. About 850,000 shares of the stock had recently been purchased for the Third Avenue fund by Marty Whitman. Marty is well known for buying value, frequently as companies in bankruptcy. It's a value play, so I was told. Looks cheap at 24, with a target of upper 30's or higher. Had been up there before. Etc.
I probably got good advice on the value. It probably will go higher -- someday. But what about this year? You see, we really knew nothing about the supply and demand for this stock. And, if it's a good value at 24, it's even a better value at 20, 15, lower.
I suggest the following. Learn about point and figure charts, which keep track of supply and demand for stocks, groups, sectors and even market averages. Learn to buy only when everything looks favorable. That would be when the market looks safe, the sector, and the stock also show that demand is in control. Thus you will be buying rising stocks, not falling ones. Yes, you may buy on pullbacks, but only when the stock is in a bullish formation.
Tom Dorsey's book "Point and Figure Charting" is a good first read. You can get it at his web site: "dorseywright.com". While there, sign up for a free two-week trial to his individual service. Then check out all your favorite stocks. Be sure to check NBR and see just how bad our decisions were. I see you also like UIS. Check that one and compare to NBR. You don't need to be trained to see the difference.
Having done the above, you will likely want to learn much more about point and figure charting. So come on over to the "Point and Figure Charting" thread on SI. You'll be glad you did.
Good luck, and please let me hear from you.
Dennis Johnson |
