Bottom Fishing is a Fools Game.

[NQscalper]

Quote from Landis82:

Just an FYI . . .

When listening to Mr. Aaron Copland please keep in mind that he would describe the current market action as "trend-less" . . . with no clear cut direction as he claimed in this earlier post today:


03-14-08 09:58 AM

We have been in a range all year no clear direction. Their are land mines around every curve it seems.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=121101

I feel like I'm pointing out the obvious but he's 100% right. We had that one big drop and have been sitting in this tight range ever since. It definitely been violent within this range but its really not gone anywhere in 2 months.

 

[Hook N. Sinker]

I remember reading a book written by J. Paul Getty yesterday. J. Paul Getty was Forbes Magazine's richest man in the world about year 1962. In the chapter on investing Mr. Getty describes a bottom fishing investing approach that reminds me of Warren Buffet's bottom picking approach and Benjamin Graham's bottom picking approach. Or maybe they don't pick bottoms, they just buy at low prices during greatly oversold markets and hold for many years. This morning I recall reading that Warren Buffett is now the richest man in the world.

 

[bdon]

I like the phrase "picking bottoms is a dirty business" better.

 

[HedgefundTrader2]

Quote from DataCruncher:

what kind of evidence do you have to back that up? and why the 50 day moving average? why not some other number?

Look at the daily charts of BIDU and APPL.

Bidu sold off hard in a steep sell off. Spent 6 weeks forming a cup shaped base than broke out above its 28 day and 200 day moving averages. Its hitting its 50 day now and with good volume up day it will move up and out. Same with AAPL, its still forming a cup shaped round base and one of these days it will break out to 140.

 

[HedgefundTrader2]

Quote from Hook N. Sinker:

I remember reading a book written by J. Paul Getty yesterday. J. Paul Getty was Forbes Magazine's richest man in the world about year 1962. In the chapter on investing Mr. Getty describes a bottom fishing investing approach that reminds me of Warren Buffet's bottom picking approach and Benjamin Graham's bottom picking approach. Or maybe they don't pick bottoms, they just buy at low prices during greatly oversold markets and hold for many years. This morning I recall reading that Warren Buffett is now the richest man in the world.

Some of these bottom fishing last puff businesses also go out of business, Warren Buffet is no exception.

Its better to make money in good businesses and lot less riskier ways and quicker ways.

Read William O Neils books they are available on Amazon website.

 

[stock_trad3r]

Quote from HedgefundTrader2:

Look at the daily charts of BIDU and APPL.

Bidu sold off hard in a steep sell off. Spent 6 weeks forming a cup shaped base than broke out above its 28 day and 200 day moving averages. Its hitting its 50 day now and with good volume up day it will move up and out. Same with AAPL, its still forming a cup shaped round base and one of these days it will break out to 140.

Agree. Bidu will easily retest 400 within a year which is why I haven't sold any shares. There is a second dotcom boom in the silicon valley and a global economic boom. BIDU is the GOOGLE of china.

As for AAPL, it isn't as good as MOS or POT or BIDU. Good fundamentals, but doesn't go up enough. Not enough upside compared to other growth stocks.

 

[HedgefundTrader2]

Quote from stock_trad3r:

Agree. Bidu will easily retest 400 within a year which is why I haven't sold any shares. There is a second dotcom boom in the silicon valley and a global economic boom. BIDU is the GOOGLE of china.

As for AAPL, it isn't as good as MOS or POT or BIDU. Good fundamentals, but doesn't go up enough. Not enough upside compared to other growth stocks.

Thank you stock Trader. You seem to be the most intelligent poster here among these people I see here. I think I like the way you think.

I bought BIDU around 240 when it was completing its cup shaped base and it exploded upside to 280 last week. Thats a 40 point move ! Than it dipped on Thursday and I bought it again at 257 and sold it at 275. Thats another solid 18 point move. Trading Bidu is extremely powerful. I traded 58 points last week.

Now I have shorted April AAPL 120 puts. Taking in time decay while it muddles around. My theta is $100/ day...If you look at the charts it does not goes down below 120 . Thats a strategy you can also put on with very little risk to the downside.

Its working on the right side of the base wedging higher against its 28 day and will explode to 140 area where it will meet 50 day and 200 moving averages.

AAPL will go back to 160 -180 easily if the markets are bullish.

 

[HedgefundTrader2]

Quote from stock_trad3r:

Agree. Bidu will easily retest 400 within a year which is why I haven't sold any shares. There is a second dotcom boom in the silicon valley and a global economic boom. BIDU is the GOOGLE of china.

As for AAPL, it isn't as good as MOS or POT or BIDU. Good fundamentals, but doesn't go up enough. Not enough upside compared to other growth stocks.

Keep selling OTM calls against BIDU stock they are very rich in premiums since average volatilty is around 64 %. It will give you nice income streams while it works on the base to the right side.