Tuesday, November 29, 2005

Buying Opportunity?

One of our Bird Flu Basket holdings is Hemispherx Biopharma ("HEB"), courtesy of Ilene's research. Today HEB announced a Research Agreement with the Canadian Department of National Defence (their spelling, not ours). Although the stock is up 3% on the news, it may be that the news is worth a whole lot more then 3%. If so, it spells buying opportunity. I added to my position already and may add more after I post this. Good Luck.

A

7 comments:

Ronny said...

Hi Allan,I just received an e-mail solicitation for the newsletter titled
The Prudent Speculator.They are ranked #1 for the last 25 yrs. by the Hulbert service.Do you know if this newsletter has enough following that their picks pop short term?
Thanks,Ron

Allan said...

Hi Ron

I actually tried The Prudent Speculator about one year ago and dropped it after not being able to apply my scalping techniques to it's picks. Don't remember exactly what the problem was, but I do have notes somewhere that describes the experience. A lot of times a newsletter will change something as simple as posting times for new issues or e-mail alerts and one that didn't work suddenly becomes profitable. So I will often revisit sources a second time, take a short trial and see if I can make it work a second time. That's why the R&D in this type of trading is so important and labor intensive. But in the end, the payoff makes it all worthwhile. In any case, you're on the right track and if you have any more ideas, I'd love to hear about them.

A

Ronny said...

Allan,thanks for your response.I had an idea about trading companies that have just announced that they are repurchasing their own shares.I know that there is some evidence that this strategy is bullish,but like with most research done,they test on longer time frames than we are trying to exploit.Do you have any thoughts?
Ron

Allan said...

Ron, get a list of these announcements and track price and volume from five minutes before announcement to day after announcment. Let me know if anything tradable is there.

A

Ronny said...

Allan,I will start compiling a list today.
Ron

Allan said...

Ron, In reading over my earlier comment to you, it came off a little more cavalier then I meant it to be. [cav*a*lier: adjective, showing lack of proper concern] You do have an interesting idea, one that I haven't tested myself but would do so if time permitted. Much of my success the past two years comes from the direct result of extensive testing, just as I have suggested you do with your idea. If you're good with numbers and statistical analysis, you can assess the viability of any trading system before you risk a dime. Trading success is just one very long continuum of trial and error. Keep as many of the errors on paper instead of in your account and whats left is stuff that works. Really.

A

Ronny said...

Allan,I totally agree.In fact I did my own research on insider trading (following your lead) and came up with such good results that I have traded this strategy successfully for the last 10 weeks.
I also studied Jim Cramers stock picks off a website that tracks him.They have a list of how his picks have done from the days close of his reccomendation until the first Friday's close.I came up with 57 winners out of 100 with an average gain of 1.3%.This doesn't account for the gap opening,so I don't know if this is a strategy that can work.
Ron