The new guy

[LemonButt]

Hello all,

I just signed up for this forum and it looks like a fruitful place to visit. I did a lot of trading back in 2005 or so and then life just got busy. Now things are a bit calmer, I've put some money back into the market since the timing couldn't be better.

I'm currently LONG on PSEC (http://research.scottrade.com/public/stocks/snapshot/snapshot.asp?symbol=psec) It's a small cap with a 6.7 P/E ratio and strong revenue growth, high amounts of insider buying, and a very generous dividend (15%). It's currently at $10.48 (I got in at $10.14 on Friday) and is down from a 52-week high of $16 and has been trading up on high volume. Earnings will be announced after the close on Monday, May 11th and I'm expecting the stock to bounce like all the bank stocks have been lately after earnings are announced. I plan on holding it for a few months, most likely until July when the next dividend payment (~40 cents/share) is issued and expect it to be well over $12 by July.

Hope this helps and I look forward to getting filthy stinking rich with you all :)

[IIC]

Welcome...Doug

[Odysseus]

Aye, welcome Lemon !

Good luck on the earnings call, I've had good and bad luck with them ;)

[mrmarket]

Parktwain noted PSEC back in Dec 2006.

[skiracer]

Hello all,

I just signed up for this forum and it looks like a fruitful place to visit. I did a lot of trading back in 2005 or so and then life just got busy. Now things are a bit calmer, I've put some money back into the market since the timing couldn't be better.

I'm currently LONG on PSEC (http://research.scottrade.com/public/stocks/snapshot/snapshot.asp?symbol=psec) It's a small cap with a 6.7 P/E ratio and strong revenue growth, high amounts of insider buying, and a very generous dividend (15%). It's currently at $10.48 (I got in at $10.14 on Friday) and is down from a 52-week high of $16 and has been trading up on high volume. Earnings will be announced after the close on Monday, May 11th and I'm expecting the stock to bounce like all the bank stocks have been lately after earnings are announced. I plan on holding it for a few months, most likely until July when the next dividend payment (~40 cents/share) is issued and expect it to be well over $12 by July.

Hope this helps and I look forward to getting filthy stinking rich with you all :)

nice looking stock for your first post. i was impressed with the insider buying going on. chart looks pretty good to me.

[LemonButt]

Here is a good writeup on PSEC for those who are interested in more information. I guess you could consider it a value stock as well since it's trading ~$10/share and they have assets of $14/share.

http://www.violentcapitalist.com/2009/05/prospect-capital-relatively-safe-17.html

[skiracer]

Here is a good writeup on PSEC for those who are interested in more information. I guess you could consider it a value stock as well since it's trading ~$10/share and they have assets of $14/share.

http://www.violentcapitalist.com/2009/05/prospect-capital-relatively-safe-17.html

i bought 1000 shares of psec at 10.34 in front of the earnings report and held thru this morning but exited the trade at 10.09 this morning for a loss of -$270.00. i still like the stock, the chart, and the fundamentals and will be looking for another entry if it falls below $10 somewhere tomorrow.

[LemonButt]

If you look at the chart, it closed just below the MA(200) line today, but on relatively low volume compared to the past week of trading. If your a Bollinger band guy, you can see it's riding the top band and actually broke through the other day when it hit $10.50. The whole market was stalled today as well and the rise in oil prices can only help. I'm probably going to buy more before the week is over to average down. See you at the top :)

[IIC]

Parktwain noted PSEC back in Dec 2006.

What the heck ever happened to him anyway???...We are going to Vegas over M-Day

[LemonButt]

I bought another 600 shares today at $9.60 to average down to $9.88. Down again on relatively low volume today. No worries :)

[skiracer]

I bought another 600 shares today at $9.60 to average down to $9.88. Down again on relatively low volume today. No worries :)

my first trade was at 10.34 which i exited at 10.09. i bought back in today at 9.51. markets are correcting now. nice entry here. expect it to go back to 12 or higher. need the markets to trend up though.

[LemonButt]

I'm hoping to unload my PSEC temporarily next week sometime for a decent gain. TNK is giving a 59 cent dividend next Friday (22nd) that will be dispersed on the 29th. TNK has been volatile enough that I'm hoping to make a quick gain off of it in addition to the dividend. We'll see how it goes..

[LemonButt]

I sold my PSEC this morning. It's up on low volume, which means its time to take some profits. I made a small profit and took some of the proceeds and bought STAR at $18.11 this morning when it was down, up to $18.35 as I write this. Will be looking to buy some TNK for the dividend on Friday (59 cents) if I can get it cheap.

The chart on PSEC looks like its starting to form a flag pattern. I think once we see a day with a low spread on some decent volume, we'll see it breakout to the upside.

[skiracer]

I'm hoping to unload my PSEC temporarily next week sometime for a decent gain. TNK is giving a 59 cent dividend next Friday (22nd) that will be dispersed on the 29th. TNK has been volatile enough that I'm hoping to make a quick gain off of it in addition to the dividend. We'll see how it goes..

im also holding OCN from 11. it is definitely worth a look right here. still plenty of gas left in this one. im expecting it to go 3-4 points higher over the near term. PSEC is looking good. im going to wait a bit and place a stop to protect what i have. i'll be bringing the stop up and along if it continues to move up further. thanks for bringing it to our attention.

[skiracer]

I sold my PSEC this morning. It's up on low volume, which means its time to take some profits. I made a small profit and took some of the proceeds and bought STAR at $18.11 this morning when it was down, up to $18.35 as I write this. Will be looking to buy some TNK for the dividend on Friday (59 cents) if I can get it cheap.

The chart on PSEC looks like its starting to form a flag pattern. I think once we see a day with a low spread on some decent volume, we'll see it breakout to the upside.

premature exitation new guy. lots of gas left in the tank. insiders are buying rampantly. you surprised me on this exit.

[LemonButt]

premature exitation new guy. lots of gas left in the tank. insiders are buying rampantly. you surprised me on this exit.

I sold at $9.95 and it closed at $9.90. I put the proceeds into STAR at $18.11 and sold at $18.90 before the close for decent gains on both positions. I'm 100% cash right now and I expect most stocks to retreat tomorrow since the only news pushing the market today was India's elections and Lowe's raising it's outlook--should be some good bargains tomorrow and I should be able to buy my PSEC back for less than I sold it for.

[yoyomama]

and I expect most stocks to retreat tomorrow since the only news pushing the market today was India's elections and Lowe's raising it's outlook

I know this is crazy & you guys certainly know your stuff, no denying that & I appreciate the knowledge for sure...that said - you might be right but I'm still not convinced that at least half the time there is no reason why stocks go up & down. The rationalizations by the talking heads are made afterwards to fit.

[LemonButt]

I know this is crazy & you guys certainly know your stuff, no denying that & I appreciate the knowledge for sure...that said - you might be right but I'm still not convinced that at least half the time there is no reason why stocks go up & down. The rationalizations by the talking heads are made afterwards to fit.

I sold PSEC when I did because it was up on low volume. Low volume means that there isn't powerful news to drive it either way and the lows/highs experienced are just short term for now. When I sold, PSEC was on pace to have daily volume of less than half it's average. If you look at the volume with the chart, the bulk of the volume didn't come until after 3pm to end the day with average volume. If a stock goes up because 5 people are buying, it's usually only a temporary gain. If a stock goes up because 500 people are buying, odds are it's going to stay up.

Stock prices are only the result of supply/demand for the moment. PSEC as a company for instance is worth the same amount it was yesterday but had a gain of a few percent when it was all said and done.

[stockman09]

Nice stock to trade that PSEC.

[yoyomama]

Nice stock to trade that PSEC.

Just as long as you didn't buy it yesterday & hold overnight.

[LemonButt]

I figured I should probably use this thread to post my trades since everyone else seems to have one. Hopefully this helps some of the newbies also since I'm not trading 10 at a time due to my relatively small account balance (I've got about $12.6k in buying power with margin). I put $6k in the market about 2 weeks ago for the first time since 2005 and I'm up about 5% now. Not bad considering I put my entire savings account into the stock market (my wife trusts me more than you can imagine) and instead of getting 0.5% APR in our savings account, I'm at 711% annualized right now. Here is what I've done recently:

5/18 - bought 200 STAR @ $18.12 (in the morning)
5/18 - sold 200 STAR @ $18.90 (in the afternoon)
quick 78 cent gain * 200 shares = $156 - commissions

5/19 - sold short 200 LG @ $30.70, 175 LG @ $30.80 ($30.75 avg)
I sold short all the shares Scottrade had available at the time. LG was pointed out in another thread and has a beautiful chart and has been pushed down consistently. It has been the only stock on the NYSE to hit 12 month lows for several days in a row. It's currently at $30.32 as I type this for a 1 day gain of $198 (not including commissions). I had a trailing stop in for 2 points to cover my ass if anything happened. I've since lowered that to 0.30 which is set to trigger at $30.62 right now. My plan is to unload it tomorrow and buy TNK for the dividend on Friday (59 cents). I'm hoping to get a full 1000 shares if the price stays down (it's getting hit today) and will subsequently sell it early next week for even more gains hopefully. If I buy TNK for 12.50 and sell it for 11.91, I'll break even when the dividend is calculated in. 59 cents * 1000 shares = $590 which will be dispersed next Friday for shareholders on record this Friday.

If any newbies want to ask questions etc, please do so. I'm no expert, but I've lost enough money in the market in the past to know what not to do :) I work full time and do the stocks on the side (I'm at work as I write this) and my goal is to grow my wealth as quickly as possible with the least amount of risk. I'm still a young guy and can afford to take big risks and lose a lot, but I am playing with my savings account here, so my trades are going to be relatively conservative :)

[LemonButt]

5/19 bought to cover 200 LG @ 30.00

Put in an order to sell on a dip (been hovering at $30.20-30 all day) and it got filled. LG went down to 12.95 and popped back up to $30.15 as I write this. $30.75 - $30.00 = $0.75 * 375 = $295 - commissions

I'm putting in an order for TNK to buy low (at $12.04 right now, will see if 1000 shares @ $11.85 gets filled before day's end) and hold through Monday for that dividend. Currently have $12.8k buying power.

[LemonButt]

5/19 bought 1000 TNK @ 12.05

Looks like it's not going to get pushed down to much further today, so I raised my order. I expect oil prices to jump (which should help a tanker company) for Memorial Day and buyers to snatch TNK up for the dividend Friday as well. Should see decent gains by Tuesday.

[steelman]

5/19 bought 1000 TNK @ 12.05

Looks like it's not going to get pushed down to much further today, so I raised my order. I expect oil prices to jump (which should help a tanker company) for Memorial Day and buyers to snatch TNK up for the dividend Friday as well. Should see decent gains by Tuesday.

Lemon,
For your style of trading which time frame do you use when looking at charts?

Thanks, Steelman

[LemonButt]

I guess I was wrong about TNK. It went below 11.85 before it closed and there was some decent selling action in the last hour. I am familiar with almost all the technical indicators, but take them with a grain of salt. Stockta.com is a good site that uses a combination of a bunch of technical indicators on a stock that I cross reference my picks with after screening etc. When I look at charts, I'm looking at volume and price movement. I'm knowledgable of most of the patterns like flags, head & shoulders, etc. I also check fundamentals and make sure a stock isn't fundamentally too high, which strengthens the pick. As far as timeframe, when things went the market "crashed" a few months ago, that is a starting point. I acknowledge what a stock was trading prior to the collapse as well. TNK for instance was over $20/share and now it's ~$12, and operations are relatively status quo over the past few years. I'm a lot more comfortable seeing losses on a position when I have strong convictions with a stock pick through technical analysis and fundamentals. I'm down almost $200 on TNK right now for instance, but I have no worries because I know the company's fundamentals are strong and the technical indicators all point up, plus the dividends are strong. Win-win-win :)

[LemonButt]

I had a fed margin call this morning on my account and called the broker. Apparently I flubbed the whole dividend issue with TNK and I need to add some funds to my account. Will be looking to unload the TNK since the dividend is a non-factor now. I've got an order in to sell 1000 at $12.25 and see if I can get rid of it on a high. Looks to be moving upwards right now.

[GulfCoast]

Lemon .. Thanks for your posts. I am a relative newbie. I have had a brokerage account for a while, but have never "traded". I have had a few lucrative positions over the last several years, and I am up...but I could have been up alot more if I had not continued to hold my biggest position through all of 2008. My portfolio size, wife's trust, and my motivation all seem to be similar to what you said about yourself. IBD is my main source of info. With a full time job, I am leaning more towards swing trading ...holding stocks from a few days up to a few months. I did buy a small position in GMCR 2 days before it's last earnings were released and after about 3 weeks, I am up about 40%. I don't want to end up holding that until it dips down below my buy point, but I can't bring myself to sell right now, because I think it is going to continue to climb.
Anyway, I like your posts, and I appreciate that you are sharing information about your trades.

GC

[LemonButt]

The biggest downfall for new traders is looking back in hindsight and saying coulda shoulda woulda. If you sold your position and beat the market in your gains, there is nothing to regret. If you're up 40%, you should feel comfortable selling knowing you beat the market with a 40% gain. Alternatively, you could simply sell the principle you have in the stock and hang on to the "free" shares and no matter what happens you'll be in the green. I took a beating today with TNK. I moved my buy order up to $13.00 and will be looking to unload it in the next week or two since it didn't trigger today. 90% of stocks were down today, but oil stockpiles have been shrinking and OPEC is falling apart which will mean more oil production and more oil needing transport. TNK was a $20 stock before the collapse and may even bump my limit order up to $14-15 if there is a rally on the horizon.

[IIC]

Here is some sage advice...Never...Ever...Answer a margin call...Best, Doug

[LemonButt]

I've got a limit order for $12.49 good until the end of the day today which will give me a solid $400 gain. If the trading is similar to what we've seen the rest of the week, it should trigger to sell at a high point for today. I'm keeping my eye on ANAT if I can get it below $75 and sell it at $77 or better and cash in on the dividend on June 3rd. WRI also has a dividend ex-date for June 4th and I wouldn't mind cashing in on both dividends for a quick $400+ gain and hopefully get some gains on the actual shares in the process.

Beyond that, I'm going to be keeping my eye on TNK as well for short/long positions. I analyzed the historical prices and the average daily loss or gain is -4.15% and 4.38% respectively. The Bollinger Bands seem to be a good indicator of when to buy and when to sell TNK.

Looks like today should be a good day for the bulls :)

[LemonButt]

05/29 Sold 1000 TNK @ 12.27
Net profit: $206
Annualized YTD return: 435%

I switched my order to a trailing stop since the spread was tight and the stock was going green. Looks like there was a big selloff and it's dropping quickly as I speak (down to 12.04 from high of 12.45). I now have $13,216 in buying power. Looks like I missed the boat on STAR as it's about to hit Mr Market's target price of 21.05.

05/29 bought 1100 IGD @ $11.90

15.6 cent dividend on Monday = $171 in my pocket. Stock has been rallying as well with the rest of the market. Should be able to sell for a profit as well.

[LemonButt]

I've got a limit sell order in to dump my IGD at $12.00/share (dividend = 0.156, last close was $12.16 we should see a lower open at $12.00) This will translate to $171 gain in dividends and $96 in capital gains for a grand total of $267.

I will be looking to buy FGP on Monday/Tuesday for the dividend with ex-date on 6/3 (Wednesday). It looks good technically and fundamentally with $36/share in revenues versus the $17.22 share price which makes this a good stock to have with or without the dividend. Rising energy prices doesn't hurt either :)

The dividend amounts to $0.50/share and at $17.25 I'll be able to pick up 780 shares for $390 worth of dividends. When the IGD dividend pays out on 6/15 and the FGP dividend pays out on 6/12 and not including gains/losses on the actual sale of the FGP shares, I'll have $7416 in principle for a 24% gain in 25 trading days. Not a bad 5 weeks :)

[billyjoe]

Lemon,
Good numbers. Keep it up all year and you'll be in great shape.

---------billy

[Mud_Doctor]

Ok I have a question. for capital gains, what about taxes when trading and not holding for a year? are you making enough to not sweat the 25% tax or just sucking it up and paying uncle sam? or is it okay to sell all but a few shares so technically you are still long in the stock? about how much cash do you need to be playing with were the 25% isnt an issue? how are you guys doing this.

Thanks
Scott

[LemonButt]

Taxes are an afterthought. It's much better to have a tax problem than an income problem. My trades will be counted as ordinary income since they are considered short term and my wife and I fall in the 25% tax bracket and will be taxed accordingly. If you are a homeowner, you will have mortgage interest to deduct and most likely still get a refund at the end of the year and won't be subject to additional taxes.

If you are getting dividends, they are taxed as long term capital gains at 15% for myself, or if you are in the lowest brackets, 5%. I'd rather have $10,000 in capital gains and pay $9,000 in taxes than have $0 or even a loss. Don't worry about taxes (unless you've got stock you've had for 11 months or something about to cross over into long term gains territory), and just worry about realizing gains.

[skiracer]

Ok I have a question. for capital gains, what about taxes when trading and not holding for a year? are you making enough to not sweat the 25% tax or just sucking it up and paying uncle sam? or is it okay to sell all but a few shares so technically you are still long in the stock? about how much cash do you need to be playing with were the 25% isnt an issue? how are you guys doing this.

Thanks
Scott

if you are trading on a consistent basis and you have consistent gains you will be in a class above millions of others. make the gains first and then pay whatever the taxes are. its very hard to make consistent gains and there are not that many that do it consistently.

[Peter Hansen]

if you are trading on a consistent basis and you have consistent gains you will be in a class above millions of others. make the gains first and then pay whatever the taxes are. its very hard to make consistent gains and there are not that many that do it consistently.

I would URGE everyone to have their children place money into a ROTH IRA when they get their first job. As a parent you may wish to place some into it also . As they get older and their salaries increase.....they will be INELIGIBLE. Remember you can ALWAYS Take OUT what you put into a ROTH IRA ..because you already paid taxes on it. Of course you cannot touch any interest or profits it made until you reach 59.5 Years Of Age. All trading is TAX FREE NO Wash Rules and none of the other BS >>>>>>BEAUTIFUL! At the end when you retire ....and collect at 59.5 NOT ONE MORE DIME IN TAXES. If you do not get into one .....you must be mentally deranged LOL

[LemonButt]

I would URGE everyone to have their children place money into a ROTH IRA when they get their first job. As a parent you may wish to place some into it also . As they get older and their salaries increase.....they will be INELIGIBLE. Remember you can ALWAYS Take OUT what you put into a ROTH IRA ..because you already paid taxes on it. Of course you cannot touch any interest or profits it made until you reach 59.5 Years Of Age. All trading is TAX FREE NO Wash Rules and none of the other BS >>>>>>BEAUTIFUL! At the end when you retire ....and collect at 59.5 NOT ONE MORE DIME IN TAXES. If you do not get into one .....you must be mentally deranged LOL

You cannot trade on margin with a Roth IRA, which means you can't leverage your money. I'm still a young guy (25) and haven't setup a Roth IRA yet, but plan to in the next couple years. I'm in the 25% bracket, which means I can either make $1000 on a trade and pay zero taxes in a Roth IRA for a net of $1000, or I can make $2000 on the same trade using margin and pay 25% in taxes for a net of $1500. Being a young guy, my investment goals include growing my capital while I'm young to setup a strong base in 15-20 years when I realign my investments to more conservative vehicles. While having a Roth IRA isn't a bad thing, everyone should evaluate their investment goals before making the jump :)

[LemonButt]

6/1 Sold 1100 IGD @ 12.06

Net: +$162
Dividend: +$171
Total: +$333
YTD Annualized: +795%

Scottrade seemed to be having server issues this morning, but I managed to sell for a gain this morning.

6/1 Bought 300 FGP @ $17.87
6/1 Bought 290 CEL @ $27.75

I wanted to buy before the 10am report came out on manufacturing data as I expect things will only be going higher. FGP has a 50 cent dividend with ex-date of 6/3 and CEL has an 84 cent dividend with ex-date of 6/4. That will put $150 and $244 in my pocket, respectively, for a gain of $394 not including the actual gain/loss on the shares when I sell. I made it a point to buy these many days before the ex-date because I do believe the market is going to go nuts with all the optimism out there and think I have a better chance of realizing gains on the shares by getting in early. To make a gain on the shares (factoring in commissions and dividends), I'll need to sell FGP for $17.42 and CEL for $26.96 by the end of the week. I'll hopefully be able to unload on the ex-dates for a gain. Stay tuned..

[Peter Hansen]

You cannot trade on margin with a Roth IRA, which means you can't leverage your money. I'm still a young guy (25) and haven't setup a Roth IRA yet, but plan to in the next couple years. I'm in the 25% bracket, which means I can either make $1000 on a trade and pay zero taxes in a Roth IRA for a net of $1000, or I can make $2000 on the same trade using margin and pay 25% in taxes for a net of $1500. Being a young guy, my investment goals include growing my capital while I'm young to setup a strong base in 15-20 years when I realign my investments to more conservative vehicles. While having a Roth IRA isn't a bad thing, everyone should evaluate their investment goals before making the jump :)

Lemon who needs margin .....when you can use Pro Funds and other ETFS with double and triple betas!

[steelman]

You cannot trade on margin with a Roth IRA, which means you can't leverage your money. I'm still a young guy (25) and haven't setup a Roth IRA yet, but plan to in the next couple years. I'm in the 25% bracket, which means I can either make $1000 on a trade and pay zero taxes in a Roth IRA for a net of $1000, or I can make $2000 on the same trade using margin and pay 25% in taxes for a net of $1500. Being a young guy, my investment goals include growing my capital while I'm young to setup a strong base in 15-20 years when I realign my investments to more conservative vehicles. While having a Roth IRA isn't a bad thing, everyone should evaluate their investment goals before making the jump :)

Lemon,

If you are going to open a Roth in the next 2 or 3 years, just open one now. You can open them for as little as $50 a month with most mutual fund companies. I opened mine at 25 years old for $50 a month. As I grew older and made more money I put more into it. From 30-35 I was able to max out both of ours (my wife and I). Now at 36, I can't contribute because my wife and I are over the income limits. However, if we never contribute another dime and we get the 12% the average fund gets over the lifetime for the next 25 years, we will have a couple million in the Roths.

The point is, don't wait, at 25 time is on your side. With retirement accounts with mutual funds you want to be invested for as many years as possible in the market. I have clients that didn't open IRA's until they were in their 40's and the truth is, it's too late. They will never accumulate enough money to retire on. Even if they put in $5000(the max) a year at 12% over 15 years, its not even $200,000.

Personally, I don't have the time to to be on top of the market all day every day, so 12% average a year works for me with my hard earned income. My extra money is what I have invested in the individual picks with $$$MM$$$ and the gang, 15% every 4-6 weeks, 300% annualized gain!! You want both, to Trade stocks and a Roth. Good luck with your trades...make a ton of money.