Well the indices had an ugly day today, with all of them being down over 1%. I started the day off okay and FRX was helping my portfolio. Then the nose-dive happened and next came the losses. During days like these it makes me want to diversify with some microcaps. One blogger with a good track record (the majority of his stocks are under $10) is the Stockcoach. His past record is pretty damn good, and I enjoy reading this blog everyday.
When I look at stock graphs, one of the things I keep my eye out for is a stock that is trending down fairly fast without any incredibly bad news. I especially notice if this is with a slow growing "boring" company that generates a good amount of free cash flow. When I see this type of graph, I wait for things to level out before I take a position. The trend is your friend.
I don't always take positions, and this has caused me to lose out on some profits- but I can't change anything about the past. Off the top of my head I've thought of three examples.
Aeropostale: check out the three month chart. I know I mentioned ARO earlier when it was dropping down to the $27 level. I didn't buy any, but I should have. The thing that caught my eye is the steep downtrend from March to mid-May. This one really didn't level out, but started a sharp upward trend to $33.
ARO is a growth company, but Ennis is more of a boring slow growth company (and growth through acquisitions). This is a 6 month chart. It's a slow growth company that you would expect to stay in a tight range of its historical ratios (of course, unless bad news comes out).
The downward trend from $20 to $16. I bought in a little too early when I thought it leveled off around the $17 range. It did drop a little more before starting to head back up but what I figured is this: it's a boring company generating a lot of free cash flow with a nice (sustainable) yield. That provided me a floor.
Last is a stock that I've been meaning to check out for awhile, but haven't. The company is Journal Register and they publish newspapers. Definitely not glamorous.
Here's a 6 month chart. It trended down fairly fast from the $19 range to the $16 range. It came out with good news so now it's starting to trend upwards. Here's a comparison of JRC with the S&P and the Dow.
Just to note: when I see these types of formations and after reviewing the company, I'm not looking for a long-term investment.
I interviewed today for a finance/operations assistant position for a hedge fund. I interviewed with the CFO and one of the main portfolio managers and I thought the interview went very well. I would be doing a lot of operations stuff and it sounded interesting. I think I impressed them with my internship background and that I managed to do those jobs while finishing two degrees. The portfolio manager asked if I've read any finance books outside of class and I think I made a good impression by listing off many of the books I've read.
The drawback: there isn't one. I'm fairly sure if I was offered a job at this place I would take it.
They said they would let me know about a second interview in one to two weeks and the entire process should take no longer than one month.
The one thing that might hinder my chances is that they could tell I had a strong interest in stocks and research, but the job was more operations. I explained that was great, because I do want to work at a hedge fund. They did clarify that the chance of doing research is small, but can be in the future. I hope they give me a chance.
Tomorrow I'm interviewing for a Game Associate position. Here are the details I do know: it would be working nights and weekends and I think it's full-time (but possibly only part-time).
In California many of the Vegas style games are illegal. The indian casinos can have these games, but the card rooms can't. So if you play blackjack in a card room you are not trying to beat the dealer's hand. One person (not the dealer) is designated as the bank/banker, and you want to try to beat his hand. In this position I will be trained to play as the banker.
That's all I know so far, it seems interesting. I'll get paid to play blackjack!
More on this later.