investing

I'm not at all unhappy with what I'm doing right now, but I was looking at the stock I bought the other day and thinking "OK, what am I looking for, here?" and the answer was, in a way, not that much. I mean, it's looking very good, so I still expect a little, and there's strong evidence it will do a little more, too, without too much delay, but I know. I know about this kind of stock. It's precarious, capricious, improbable, and unlikely. It's not the first time I've thought I shouldn't be messing with this kind of thing. What is it they do again?

Messy! Wildcatting! I mean, sort of impressive, on the face of it, but ... how real is this, after all? I've seen other examples. It's just a business, and sort of a sketchy one, at that, is my assessment.

Well, I'm biased, that's true. And I can see the appeal. If this were a really great company and selling at a ridiculously low price, I'd be kind of enthusiastic. I mean, I don't want to say they're a bad company. I just guess I'm not sure there's enough there to support the shares.

I guess I'm coming around to looking for a moderate gain at the earliest opportunity.

But here's an interesting challenge for you: can you look at charts and pick great companies?

I'm very lucky, I feel, to have access to a tool that lets me look at a lot of charts. It will let me look, as a kind of default, at charts for the whole market. I mean, I can only look at a very small part of the market at once, but let's say I look at thirty companies, at a chart for each company. I'm seeing ones that look interesting, somewhat, slightly, at least, but the more interesting they  look, the more dodgy they look, and then I'm seeing lots that just look boring. It's gotten to the point where I just pass them over. Oh, let's see, let's see. You know, I'll take a look at this one. It's the kind of thing I would normally ... be reluctant to consider ... but ... it is a giant wedge. I mean, it's a pretty classic pattern, just bigger. Let's see, when it rallied late last year, how big of a rally was that? Wow, it was not a small rally. I'm not looking at the chart now, but it tripled or something.

So, what do the financials look like? And what do they do? Well, they're All American Supply, and they are a somewhat big deal, and it's stuff for farmers, and certain other people. LOL. There's a Buffett story about this kind of business! (All American Supply is a name I made up for them. One way to find stocks to look into is to look up nonsense names like that. You do not know what you are going to find.) Fantastic!!!

Not that I'm saying this is the world's greatest company, or anything like that. You look at the financials, and there's gaps, and eccentricities, although it looks stable and has tended to be profitable. It's not the most romantic business, but, then again, it's basic industry. There is an element of romance in that. I mean, I like it. But what about the monthly chart. Oh, yeah. I like it a lot. This is the bet everyone says is crazy, that I place.

A moth got stuck in my keyboard, I closed the lid, and it left a patch of red blue and green jewels on my screen.

Well, I've been doing decent. Pretty much one a day I come up with an actually interesting company to invest in. First there was the Chinese drug company. It had its negatives. It is, for one thing, a drug company. But as I recall it had its positives, too, to the point where I kind of liked it. I found it by looking at a whole bunch of drug companies, by the way. It wasn't that I set out to do that, I just ran a technical scan and it was all drug companies. Well, next to the lot of them this one actually stands out as being a solid company! And I do have a thing for Chinese medicine. It's a very perfect investment for me. I'm going to be a Chinese Medicine Tycoon.

Of course there was Sky People, which I already wrote about. Gotta love it. But what was that other one? Oh, BREW. Oh. That's so, so good. It's official. I'm in the Craft Brew Business ... and not in a small way!


Here's the thing, though. BREW is going to go sideways for some months, it's got to. Aoxing, on the other hand, is going to head out, pronto. The monthly chart on boring old LXU is awesome.


Let it be known that I am carefully logging all these observations. If I talk about a chart, I can show you that chart, or look at it myself again, and I will be able to do so into the future, at least up to a point, and I look at these stocks absolutely every day. A scan you should look at every day is stocks up 15% on the day, not because most of them are likely to be good investments - quite the opposite - but because you are likely to see certain things, among all those sketchy charts, that are incredible. I happened to do this yesterday - I haven't done it today and I'm not sure I will - and one of the 15 or so stocks was doing something really amazing. What's more, I kind of like the company. Heck, I want to be in the cellular equipment business. Seems to me they run a tight ship, that's the impression I got, too. A very small boat, but still, well run. I mean, this stock is seriously down, and just went down more ... but, what a pattern it's making! I checked it again this afternoon, and the fantastic, incredible pattern has become even more fantastic and incredible. It's incredibly incredible!







If you could reliably produce a ten percent gain in a day, buy choosing, every day, the right stock, you could start with 100 dollars and be a millionaire in a year ... i guess.

To increase $100 10% you need a stock that will go up 20%. That gets easier as your trades get bigger, but think of it as a base line.

Well, it's not actually hard to find examples of stocks going up 20% in a day. It might be futility, but we can do it and study the examples.




This is a key point, and I don't know how to explain it well: it's probably as easy to find stocks that will go up 100% and more, all the way to 1000% and more, if not in a day, even, then in days, literally days.



Of course it should be and probably is easier still to find stocks of the latter type that will go up like that in weeks, and months, and certainly in years.

ec

Warren Buffett says he doesn't care if he buys a stock and then it doesn't trade for ten years.

Warren Buffet says he can't predict the market and he doesn't know when a stock is going to go up or come down.

Warren Buffett says "our favorite holding period is forever."

Warren Buffett says "one good investment can make you rich."

Warren Buffett says "if our stocks go down, we're ecstatic, because then we can buy more."

Warren Buffett says the way to succeed in investing is the way Benjamin Graham taught, which is Financial Analysis.

Financial Analysis as taught by Graham is surprisingly easy, at least, if it means you can do some easy things and you see things that are pretty interesting ... like ... thousands upon thousands of companies ... and ... looking at some of them ... a great great many that seem to be on precarious financial footings ... and some that seem to be on very sound footings.

Can it ... be easy?

I went, thinking freely, to the longest list of companies I could find, and looked at charts, starting on page 300. Then I looked at page 301. One year charts. That's what the system gives me. And, I thought, what am I looking for. There was one that looked cheap, but precarious. Still, I logged it. And then there was one that had done something cool, and I logged that. I thought I'd do one more, and started making snap decisions, asking myself "that one? that one? what am I looking for." Then, well, it was a giant peak. My kind of thing ... and in spades. Not so cheap as all that ... trading above $7 ... it was Sky People Fruit Juice! So now I'm gonna own a Chinese fruit juice company because ... it's Chinese Fruit Juice! But what were the ... other ... fundamentals on this one? As is my habit, now, with one click I went to the beautiful financials.

Good, they have revenues, are small but not teeny tiny, at the upper end of teeny tiny, and consistently so, four years slightly declining, and we take the averages over years if we can get them, as Graham taught us, because of cyclicality, but what's down here? Lot's of black, and all looking very spare and orderly, and a solid black earnings line! At the very bottom, it's earnings per share, and you average that out and you get, and then you check that against the price, and the ratio is something like 3, which is a ton of earnings per dollar!

Well, what's the balance sheet like. Get that current assets line, and then get that total liabilities line ... and there's a slight current asset surplus. Hmm, I wonder what the average looks like. But, that's for another time. By this measure they're a little expensive, but not astronomically.

A little puzzled, and a little wary, I decided to look at the details and see if I could glean anything from them. Very businesslike looking wherever I look, for sure. What about this balance sheet? Why isn't that stronger?

Down towards the bottom there's a line I hadn't noticed, Retained Earnings. It's sort of a big number. How does it work, though. I try but can't quite remember. What's this next line? Equity. And below that is Equity and Liabilities. That's the value of the company! Equity, per share ... Earnings per share ... It works out to a four percent return on Equity. Hey, four percent isn't bad!

My chart reading turned up a gem!

I'm working my way towards a dozen like this. Investments. And it's also a thrill ride.

On the monthly chart it has a history of spiky candles. A spiky candle happens when a stock goes up a lot in the beginning of the (period) month, and then comes all the way back down, a lot of the way back down, by the end of the month. If this is up mid - month, I might sell it. Depends what kind of up.

So, what makes this an expert level stock. Well, it's Chinese, it's fruit juice, it's small. It's a great company, so it's likely to move, but the market won't believe. It'll drop again.

But what about Buffett's preference for holding forever? Selling at 40 or 60 will make me a few hundred dollars, but it's holding forever that makes you rich. And yet, from my perspective, it's entirely unjustifiable to hold this, if it rallies. How do I make sense of this? What kind of company would I buy now to hold forever? Anything? I can start to see that this is a reflection of my thinking on the market. I do think about the market, I mean, I do make predictions. Maybe you could call it analysis. I feel like it's still early in a  market cycle, not, like, really early, but not late. Still early, just by a bit. Also, I'm predicting a spectacular global economic boom for fifteen years. Once that really gets going it'll carry fruit juice and all other very good things with it to great heights, but at this early stage, things are still up and down ... which is good.

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