Look people, I love the challenge that has been thrown in front on me. If I tell you I like something you are going to keep me to my word when its down and probably not remind me when its up (Not all of you...thx for the personal emails about BNI, BBY, ADVS). But I like a good challenge so that is why I have set up my stock tracking tool. Now this tool is not the greatest because I can't always get the optimal price points that I recommend on here or actually buy in my personal portfolio.
If I tell the tool to buy a stock, say ADPT tomorrow, it will wait until the open...then because most websites (Yahoo, CNNfn,etc) are on a 20 minute delay it won't buy ADPT until 20 minutes after the market is open. This works well only if the stock isn't moving to the upside, or else the tool is tracking my recommendation at a higher price. I will work on fixing this problem...but until then pay attention to the PRICE POINTS that I list here at URBANOMICS. A quick refresher...PRICE POINTS give you an idea of when I think the stock is buy. If you are aware of any other sites that give you this in bold print please let me know.
Adaptec is a great example of one of those stocks. I highlight this stock because there is some serious action going on AFTER-HOURS with this stock. It looks to be up over 11% and will likely open tomorrow up at least this amount. NOW LISTEN UP...this is the second time that ADPT will give you short term players an opportunity to SELL. Read my post from Friday...ADPT was highlighted as a stock that we could have sold for a gain (around 10%) but you may not have done so...when it hit levels of 3.92 less than a month ago. And I noted as Jim Cramer has told us don't get greedy because Bears and Bulls make money...PIGS get slaughtered.
PRICE POINTS are designed to dollar cost average solid investments. So like one clever person pointed out that I had recommended ADPT at 4.05 at one point. That is a true statement, and even though you will notice that I did not actually purchase until months later (Search for ADPT and read my posts until you notice my disclosure on when I purchased), I have to honor the fact that I did post that price on my site. Now even though, I am one of the VERY FEW SITES to POST PRICE POINTS, you must continue to follow the way we invest here are URBANOMICS religiously. Back in June, I noticed and recommended ADPT at 4.05, however remeber these rules you must follow:
1. Buid a margin of safety (a steadfast Warren Buffen rule) to the inital recommendation price
2. Use multiple PRICE POINTS to accumulate a position in the stock:
- There will be a regular PRICE POINT (with a margin of safety built in)
- There will be a SUPERMAN PRICE POINT (a load up the bus, truck, trailer price)
3. Follow this post for stocks that you own:
If you read my later posts that include ADPT, you will notice 3.40 as another price point and in fact this price made my SUPERMAN that stock PRICE POINT. So at 3.40 you would have accumulated more stock, which reduces your original buy price down (dollar cost averaging). Further because this stock was rated SUPERMAN you must CRANK IT UP, BACK THE BUS UP!!!! That means accumulate as much of the stock as possible, up to twice your normal purchase amount.
4. Finally, review your stock periodically to ensure that the fundamentals have not changed with the stock. If they have soured, reduced your position. If the fundamentals are the same or improving, create new PRICE POINTS and continue to accumulate more stock, which reduces the average price at which you own the stock. Notice: In my post, on Friday October 26, I mentioned that ADPT's fundamentals are still on track and said to buy the stock again if it reaches under 3.40 and I gave a new SUPERMAN PRICE at 3.23 (the 52wk low). Well the stock was below 3.40 today.
So what does this mean in English...you would have probably done something like this is you followed ADPT on this site (using 1 shares as the standard buy):
Dollar Cost Average Example:
Buy 1 @ 4.05 (June) + Buy 2 @3.40 (Superman Price identified in Aug) + Buy 1 @ 3.40 (Oct 29 post price) = Dollar Cost Average Price of 3.56
I am telling you this because I believe that ADPT will be up big tomorrow which will give us the opportunity to SELL...for the short term traders. And some people may say how did you sell ADPT for a profit and this is how it happens. Need proof follow the stock Radisys (RSYS) and the posts that recommend multiple price points. That is why with Radisys we are up almost 30% in that stock.
BTW - Check out the recent news, was I right about my analysis back in June of this year about the Private Equity Firm, Steel Partners tightening the belt around ADPT, see the Article here: Adaptec in a War
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