Down goes Irish! (Thanks to NVDA)

Nvidia looked like it was approaching support about five trading days ago and I was looking for a speculative position to enter. After a daily drop, I picked up positions in Google, Garmin and Nvidia at the close of the market. About ten minutes later, the nice folks over at Nvidia decided send out a press release that basically stated they weren't going to make their numbers this quarter. NVDA fell about 25% in the after-market and by the time I could clear my position at the opening of the market the next morning, 85% of my option value was gone!

Jim Cramer once hosted a show that talked about the disastrous moves that some traders make and one of them was trading the earnings release of a company. I've done it many times myself, but it's a tough business. Apple usually kills when it comes to beating their numbers, but if they even hint about something bad in the future, the stock can still drop like a rock. If you're trading options, earnings occur after the close and there's no way out of the position until the market opens on the next business day. By that point, a good portion of your holding can already be gone. For reasons like this, it's a good idea to stay cool during earnings season. Even so, Nvidia wasn't even close to their report date, but I was still caught up in the fiasco.

Looking back, I still have good arguments for getting into the position, but there were risks that could have been averted with a more disciplined approach. With the markets in such turmoil lately, the fast-action trading approach is winning out over holding positions for any duration. With these conditions in play, it's hard to not get hit with a bad trade or two, but this particular trade was a perfect storm of bad timing and bad luck. Thankfully, Google and Garmin came in for me, but I'm still in a bit of a financial (and psychological) funk. Trading is fun!

Sell in May and Go Away

If the old Wall Street saying holds true, I'll be glad to now be all cash. It's been a tough week. Almost all of the eight stocks I watch have sell indicators. I was able to turn a 65% profit on my AAPL position (sold Tuesday). Since I sold it has gone down considerably. It's nice when the tools and strategies work. Buying again on a pullback before the iPhone launch is a gift. I hope to be back in AAPL again soon. Other than that I'm hoping stocks continue to slide so I can get a better discount on the companies I want to own. My small FCX gain (sold today) was a wash with my small COH loss (sold Wednesday). Enjoy the long weekend!

3G Time!

I began the week with three positions, Nvidia (NVDA), Coach (COH) and Freeport McMoran (FCX). At one point, I was up a little over 40% on the NVDA but I held on and lost the entire gain by yesterday. With oil over $130 a barrel, I shouldn't have expected strength on the buying side of the market. Today, I decided to clear the position with a 20% gain and I also sold off FCX for a 25% gain. I might miss out on some upside if oil falls, but I wanted to have some cash for... Apple!

Damon and I talked about Apple (APPL) yesterday and we both see it above $200 with the announcement of the next 3G iPhone due sometime in June. The phone is expected to fix some of the complaints about the first generation phone and it could include some features such as GPS that could really put some pressure on the consumer market for Garmin (GRMN). On Apple, I'm buying under the $180 side and selling above $200.

Higher Highs, Higher Lows

The major indexes are behaving more bullish lately. And so are some of my favorite stocks. Freeport-McMoRan Copper & Gold (FCX), NVDIA (NVDA), and Coach (COH) all had strong buy signals today. I picked up FCX contracts when the stock pulled back 2% at market close yesterday. I'll be patient until NVDA and COH come closer to their moving average before I consider entering a position.

Today there was big hype on Research in Motion's (RIMM) "TouchBerry", called Thunder. I'm not too worried about it being a threat to Apple because I think there is plenty of room in the high end phone market for both products. The Apple iPhone brand is too strong and they will be dropping prices considerably soon. RIMM is great, and so is AAPL.

Time for Garmin?

Last week, I ran a long/short on Coach and was able to take a profit on both sides, but it looked like the market was set for some downward action. With food costs and oil prices rising to new levels, I felt that inflation worries would take most of the stocks lower. I took a hit on Transocean (RIG) and Freeport-McMoRan (FCX,) but

While we did have a correction, just today inflation worries subsided and the market rose in early trading. I'm setting up on FCX, GOOG, and COH again on the upside, but I haven't entered a trade just yet.

The only contracts I'm holding right now are some Garmin (GRMN) calls that I picked up last week. GRMN has been beat down over the last six months. The trend is pretty ugly but I think we might see a short term bounce with tax rebate checks hitting consumers. Garmin is strong with high-end flight and naval equipment, but margins are being squeezed on the consumer side by several rivals. After the big fall over the last six months, it might just be time for a little upside.

Coconut Water and AAPL Juice

When Irish asked if I'd contribute to his new trading blog I warned him I might not always stay focused on stocks. I might just rant more about the best way to stay hydrated or the health benefits of delicious spices than I will talk about stocks. I'll try and stay focused.

I began following stocks about five years ago when I saw a maverick investor named Phil Town speak. Last year I read Phil's book titled Rule #1 which influenced me to establish a more simple and disciplined trading strategy. It follows what Warren Buffett, the richest man in the world, does. Buy strong, well managed companies (stocks) that are on sale at a 50% discount, sell them at full price, then repeat.

One of my favorite companies to own these days is Apple. Great products, brand, management, growth, revenue, stores, etc. It is also selling at a discount according to the valuation analysis. JAVA, not so much. It still has bruises on it from people touching it with 10 foot poles. I'm not going there.

In March I rolled my retirement mutual fund into a self directed IRA. After my precious nest egg got annihilated in early January I've grown much of it back in short time simply by trading that one great stock. Here's to you all buying an iPhone with your tax rebates.

Sun Goes Supernova!

Last year, Damon "Ducks" Rivera convinced me to start trading stock options. He's been doing it since he left Sun and I couldn't let him have all the fun, so I got back into the market after taking some years off.

Quite a few people have been asking how things are going and with real estate in the tank, I decided to change out my page to include a little investment blog action. I'm inviting big duck himself to co-author the blog, so he can ridicule my trades in companies like Sun.

Speaking of Sun, my employee stock purchase program reached a new low point as of today! After earnings last night, I got worked over the coals as payment for my years of loyalty and confidence in the company. Not only did JAVA not meet expectations, but it also lost 4 cents a share. Can you say 23% fall in stock price? Can you say %@#$?

Keep in mind that this wasn't one of my option trades. Damon talked me out of that one before earnings, so maybe I'll go easy on him in the next poker game.