Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The DD Maven -- Ignore unavailable to you. Want to Upgrade?

To: shortsinthesand who wrote (439)	12/2/2008 8:12:26 AM
From: rrufff	1 Recommendation Read Replies (1) \| Respond to of 736

Hi Shorts - I'd answer your question about my posts but you state you don't read substantive posts and I've already made my point quite well. But, as for your substantive questions about the market, I've been playing the volatility for the past 6 months or so. I've posted about FXP, which is a very high risk ETF, double short on Hong Kong. I've made money every month writing the options. I've been successful even though I've made mistakes in calling the daily turns in the market. The premiums are so high that it really is a play on the volatility. This is very high risk but that's why the premiums are so high, sometimes assuming 1000 point moves in the Dow. The market will continue to be a bear market with rallies, into which it's best to take profits, at least until the new administration starts bringing some real planning to fruition. As you have indicated, I've also been playing dividend stocks, high yielding big caps, such as XOM, even though I dislike the politics and policies of big oil. It's tough to argue against a company that should be successful no matter what direction our energy policy takes. Add the dividend to covered calls, and one can take advantage of volatility and create high yields. I still like to play the high risk penny stocks, with my eyes open but I don't think we'll see much of a recovery for 6 months. It takes longest for people to return to the riskiest areas of the market. I'm not buying many high risk plays here for that reason. I'm selective and the spreads have increased. There are a couple of plays from the Microcap Kitchen that I like and are very low, high risk but fully reporting - AMLJ and ORFR. Other than that, I basically take it day by day and see if there are bargains to buy and put away for awhile. In pinkies, I trade for fun and rarely keep stocks for long term due to the typical dilution. I still like LBWR, haven't been following it though and agree with the comments about delays hurting its credibility. I think the "scam" comments have been overdone and the stock price has been pretty stable. I think most longs see the one-line attackers/spammers for what they are. What's typical of high risk plays though is that it's best to buy when credibility is low as pinky buyers so rarely get what is promised. Accordingly, if a CEO actually comes through, people flock to the stock and a multi-bagger results. As you said, that's not to say that one should buy these plays and buyers should be prepared to lose all their money. I think most understand that even when it's not expressed. It's obvious. I'm not sure if you actually short stocks, but these websites have been lacking in good suggestions for overpriced stocks that can actually be traded by retail traders. For that reason, I think it's largely a waste of time bashing penny stocks. It's too expensive and time consuming to short them unless you're connected to a money pool, hedge fund or MM. Do you have any stocks that make sense to short? Given the market, shorting now is almost like buying at the top. That's why I play some ETF's, such as FXP. It gives a hedge opportunity, is cheap and easy to trade, and can be hedged again with options. In reviewing my overall portfolio, I made a surprising discovery though. I had decided to emphasize large caps more. They actually have underperformed and had much more volatility than microcaps that I like. I'm not sure what to make of that. I thought I was going the safer route, but I would have been better overall sticking to microcap plays. The current market makes me understand that the more I think I know, the less I know. I keep that in mind whenever I see a claim that someone is "always right." Anyway, time to try to make some moola, happy trading :-)