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Mr. Martket:

I'm interested in your sell strategy. For DHOM, do you put the sell on as a limit sell, or do you wait for the stock to hit your sell point and then sell with a market order, or do you issue a stop loss at the sell point to see if the stock continues up?

Just curious.

DB
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Thank you MM! I sold DHOM today at 17.68 for a tidy 15% gain. This is my second trip to te momentum well. The first was DFXI.

I use limit orders to sell stock since I am not always around to monitor my stock's intra-day performance.

I think beef tenderloin in port wine sauce is in order. After all, you deserve the finest meats (and cheeses).

Steve
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A wonderful primerib would be in order for me. At a very fine resturant.

Snip beginning
I think beef tenderloin in port wine sauce is in order. After all, you
deserve the finest meats (and cheeses).
Snip end

Getting back to the seriousness of investing. There was a member here that did some analysis of his quantative method. The member backtested his method with information provided by MrMarket. The test did NOT include any trades from about Feb. 00 to June 01. That is a gap of about 18 months. MrMarkets history does not indicate he stays out of the market completley for this long of a period. He had several trades in 99, a few in January 00, and several after June 01.

I am somewhat a curious individual. What happened in that gap?
Does anyone, particularly MrMarket, want to explain.

I do think MrMarket is a great person, and a huge person, but he seems like he is hyping himself to be greater than he is. I suspect he suffered huge losses during this time and is not disclosing these losses. Granted, he can do anything he wants and he certainly does not want folks using his method alone. But his credibilty is at stake here.

Would like to hear from others, as well as MrMarket about the gap between Feb 00 and June 01.

For now just bring on the meats and cheeses and perhaps a great glass of wine. Primerib to follow.

Beth
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Yup, DHOM won for me too, in my watch account that is. I didn't have the money to invest. :-(

But anyway, I would prefer to learn his method rather than just copy his picks. I am going to study his website real good.

I am curious too why MrMarket was absent from his board. But do I want to know what he did? Not really. If I get his results from that time, they will do me no good. I did the backtest based on the info he posted on this board, because that info is time stamped.

BTW, I am sorry to say that when the Fool starts to ask money for the use of these boards, I'll be off. I am not mad at the Fool, I'm just a miser. I need to.

Time to start learning!

Hey, MrMarket! Youre HUGE!

Karel
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Thank you Mr Market
I have just made a nice profit with DHOM.
It was quite a wrench to sell it but seeing I am starting to apply the method I forced myself. I eagerly await your next buy.

I am also rather reluctant to pay for fool boards but if it serves as a site on which Ernie will continue to post and others to discuss, it is probably worth the fee. This is rather ironic given the fools previous persecution of Mr Market (ie that Ernies method and style might directly fill the fools coffers).

In reply to Qarel's previous comments that Ernie should post his recommendations prior to buying, I feel that this is an imposition. I really dont think that these tips influence the share price much, but if they did it would be unfair to expect him to wait until they were in the public domain before buying himself.
Incidently, I also dont think that there has been any true ramping of these stocks on this board. I have not seen any examples of alleged inside information, rumour or innuendo (which sometimes goes unnoticed and unpunished on share specific boards). Just enthusiastic recommendation with concise justification.

By the way, as a UK dweller, does anyone know if IBD is available in any form in the UK.

Regards
Philip Kaye
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Philip Kaye: In reply to Qarel's previous comments that Ernie should post his recommendations prior to buying, I feel that this is an imposition. I really dont think that these tips influence the share price much, but if they did it would be unfair to expect him to wait until they were in the public domain before buying himself.

Well, I didn't say should. It was a suggestion. What made it easy to make the suggestion was that his recommendations made no impression on the great investors and the great investing public. (But then, they are not HUGE, like MrMarket is.) So if he publishes his picks before he buys, supererogatory as that would be, he seems to be able to afford it. But he doesn't have to do it; I am already convinced.

So, with that out of the way:
It was quite a wrench to sell it but seeing I am starting to apply the method I forced myself.

You could consider a trailing stop at, say, 5% under the highest high after the buy. You start the stop when the stock hits +15%, and place it at a profit of 10%. Update the stop every week, day, hour or moment you would like to update it. Just an idea. Or you could place a GTC order. It is much easier to make the decision to sell at +15%, than to make it after the stock has made that +15% :-)

Regards,

Karel
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Qarel:"You could consider a trailing stop at, say, 5% under the highest high after the buy. You start the stop when the stock hits +15%, and place it at a profit of 10%. Update the stop every week, day, hour or moment you would like to update it. Just an idea. Or you could place a GTC order. It is much easier to make the decision to sell at +15%, than to make it after the stock has made that +15% :-)"

I thought long and hard about putting in a stop limit but it is my impression that the brokers/market makers make sure that there is enough volatility in the share price that such limit orders invariably get filled. The result is you actually end up selling for less than you could have. I dont know if this is really happening, but the couple of times I have tried this, it does seem to have happened like that.

regards
Philip

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make it a mental stop and you wont have to worry about getting knocked out on intraday spikes down at least, but then you have to have the discipline to bail if your mental stop is hit on a closing basis, not always so easy.

ns2
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On Jan. 8, the total volume of shares of DHOM traded was 2,000. Assuming you bought all of them, at $15.30/share you invested $30,600.

On Jan. 30th, if you sold 2,000 shares at $17.7525, your receipts would be $35,505. Subtracting the $30,600 initial investment, and assuming you paid no brokerage fees, your absolute maximum gain would be $4,905.

Now, Mr. Market, I've come to respect your ability to make some pretty doggone decent stock picks, but I doubt even you, as huge as you are, could buy two color printers, a scanner, a new PC and a new car for forty-nine hundred bucks!

Okay, okay, so you didn't say you would buy all that stuff with just your gains on DHOM. I just wanted to rattle your cage a little.

Mr. Market, what is your opinion of ATAC? I'd like to know.

—Rob
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The more I look at ATAC, the more I like it.

Check it out, GE owns more than $41 million worth, almost three times as much as the number two institutional owner.

http://biz.yahoo.com/hd/a/atac.html

And as of most recent report, there are only 67 institutional owners of this one. Lots of room for more investors.

P/E is only 14.15; R.O.E. is a very healthy 31.49.

When they report earnings in 2 weeks, if they meet the estimates of $.46/share the P/E based on Friday's closing price will be 13.07.

Debt/Equity ratio is 2.33, which is a little higher than I like to see, but I believe this one may well be a winner at least in the short term.

—Rob
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Rob

Can't for the life of me see what you see in ATAC. Maybe I'm missing something. This is basicly a glorified junk dealer. Although its chart has run up well over the past 6 months, it looks like its run out of gas lately to me. And what about this stock will take it higher?

Neither its gross income nor its net income has risen much over the past year. Gross income is up only 1.4% over the previous quarter, although net income is up 12% over the previous quarter. I just don't see this stock moving much from here.

I've been searching through IBD ratings lately and found some great ratings for homebuilders. Thats how I found Mr Market. He's Hugh. I was searching The Fool for OHB and found a discussion on the Mr Market board.

The homebuilding industry is red hot these days. It has excellerated at an unbelivible pace during the last two quarters of 2001, mainly due to a 40 year low in mortgage interest rates. Look at the charts for all the homebuilders and you'll faint. In fact several of them show up in Mr Market's chart of 15% winners over the pasr year: WLS, OHB, RYL, CTX, BZH, RH, NHCH, DHI PHI, PHM, LEN MDC,DOHM.

All these stocks are experiencing explosive growth in revenues and EPS. Most are in double diget EPS growth. WLS is up 54% in Q3 01 over Q3 00. OHB is up 63%. BZH is way up. And on and on. Any of these are far superior to ATAC IMHO. But don't take my word for it. Go check them out yoursrlf. Mull over their 10Q statements.

I particularly like OHB after researching most of them very carefully. Their EPS grew 19% in Q1 01, 44% in Q2 01 and a whopping 63% in Q3 01! Talk about excellerating growth. And even better yet, new orders are up 94% in Q3 01 and their backlog (houses in progress) is up 73%!

All the homebuilders who have reported Q4 01 earnings so far this year have turned in stellar results. Perhaps the biggest builder of them all, BZH (which by the way was a Mr Market 15% gain last year) reported record profits for Q4 01, reaching $9 a share for 2001, several years ahead of schedule. BZH stock took off after they reported these stellar earnings in mid-January. The same chart pattern has showed up after each homebuilder reports Q4 01 earnings. Look at the charts.

OHB reports its Q4 01 earnings on 2/11/02. What do you think is going to happen to its stock price during the later part of this month?

OHB is relatively cheep at $6.20, because their EPS for Q3 01 was quite a bit lower than WLS or BZH. But I expect their EPS to be quite a bit higher for Q4 01. Their P/E is 8.8, right in line with the rest of the industry. I wouldn't be surprised to see their stock price double in a month if their EPS comes in at what I think it just might.

I will be loading up on OHB this week as I liquidate other holdings. Come on along for the ride.

RS



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Sorry about that. It wasn't OHB that goy me into Mr Market's site, it was another IBD stock, FCN. Just wanted to correct that.

RS
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Sharpvt,

You are right. The home building industry has been red hot, and the charts are magnificent. It just seems like that momentum can't continue much longer. And to me homebuilding seems more dependent upon consumers' discretionary spending than does the auto and truck repair industry. I'm not arguing AGAINST homebuilding stocks mind you. (I had my eye on Toll Brothers (TOL) for a while and am now wishing I had snapped up some of it, especially since late November.) I'm just giving you my opinion on why ATAC looks good to me.

I like to find the traditional cup-with-handle chart formation where the volume in the handle dries up to nearly nothing. This is one of the bullish signs O'Neil identifies. And in looking through NASDAQ stocks in the news in IBD last week, I noticed ATAC's chart looking really good.

Today's IBD ratings are: EPS 83; RS 98; Grp RS B; SMR A; Acc/Dis B. It is rated best in group in each of the four categories: Overall, Technical, Fundamental, and Attractiveness.

For these reasons, in addition to those I already mentioned, I think ATAC has a realtively good potential for a strong move to the upside in the short term. Maybe it will be outpaced by some of the home builders you mentioned, but I think there's less chance of it falling significantly. As always, I could be wrong. That's what keeps life interesting.

—Rob
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Hi Rob

I wish I had found homebuilders in November, although I'm not sure this surge was that obvious then. But alas.

I don't think home sales depend on discretionary income. Everyone needs a home to live in and OHB builds very nice homes. I even checked out their web site and took a couple of virtual tours of their models. There is a great history of the Orleans family business there too.

Its no surprise that new home sales are way up with interest rates at 40 year lows. I'll jump on the tidal wave and surf it for a while. And of course you're right. Eventually the homebuilders will slow down and perhaps even crash as they did in the 80s when interest rates hit 20%. By that time I'll be long gone with a truckload of $$$. Hell, Mr Market only holds his selections 4 to 6 weeks! I think interest rates will remain at these historic lows for at least 6 months, maybe a year. Plenty of time to bail.

I see big gains in OHB in the very short term, for a month or so after they report earnings on 2/11/02. If their results for Q4 01 are good (like a double in EPS) I think this stock will pop just like BZH. WLS reports its Q4 results on 2/27/02 and it should follow the same patern. Hopefully I've made a truckload on OHB by 2/27/02 and then I can repeat this process with WLS in early March. At least thats the plan.

You go with ATAC and we'll see how we do. Should be interesting.

RS
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