Yeah, the price is nose diving for reasons you can look up. But the question a value investor has to answer is, “How much lower will it go?”
Suggestion: open a position, but keep the bet small for now.
Standard Disclaimers: I got in just now at $3.92 and have been in and out of this stock lots of times in past years, because I like trading under-the-radar ADRs.
Follow-up on TKC (originally tipped Weds, May 24th, at $3.92).
TKC gapped up Friday, May 26, and held at $4.15 for reasons that can only be gussed at. But a two-day gain of 5.9% is decent money. (Thank you, Market Goddess!)
In other posts, I also mentioned getting into JOAN and POWW, So let’s look at the the score card for those three (of the 100 or so other stock and ETFs positions I’m carrying, most of which are small, but not as small as these three).
Ticker, Size (in shares), Unit Cost, Total Cost, Present Price, Value, Gain/Loss, P/L
TKC 1 $3.92 $3.92 $4.15 $4.15 $0.23 +5.87%
JOAN 3 $1.60 $4.80 $1.54 $4.62 ($0.18) (-3.75%)
POWW 3 $1.61 $4.83 $1.73 $5.19 $0.36 7.45%
Totals $13.55 $13.96 $0.41 3.03%
Further Comment. My preference is to size positions equally relative to their risk tranche and my purpose for putting on a position, which is a carry-over from my bond investing days (and a post for another time). Thus, the three trade are speculative, $5 dollar bets that are meant to test a trading system I’m experimenting with. If the system proves viable across a hundred trades or so, then I’ll scale it up. But there’s no need to do so now.
Second comment. A gain of 3% is tiny money. But the gain was achieved in a couple of days. If the rate of gain could be sustained for a full year of trading, the project would be very worthwhile. But that’s the uncertainty and the unknown. My bet is the US eceonomy is in serious trouble and that markets are going to crash. In that case, survival will be my chief concern, not making money. That means I need to put together a sell-short campaign, and my guess is it will be needed to be up and running by Labor Day.
What software/web site are you using for those charts?
BarChart. Accounts are free and permit saving five chart templates, plus five watchlists.
POWW made a nice move up…doc
Doc,
I hate to see those kind of out-of-the blue jumps, because they could just as easily --and inexplicably-- have gone the other direction.
Right now, I’ve pretty much decided to do the 'Sell-in May-and-Go-Away" thing, because the fundamentals don’t make much sense, and trying to trade the short term moves doesn’t make much sense, either.
If you want to see a price jump, take a look at what uranium has done in the last three days or ENPH in the last seven.
OTOH, TSLY is doing as well, a position I put on May 19 because the chart looked good as did their investing thesis. In fact, I own dozen such funds that make use of options.
