Weekly thought on $AMRN, $CARA, $DUST, $IBIO, $LEU & a Year in Review

What a Year!  Despite my flipping between swinging for the fences and hoarding cash to play safe, I managed to gain 33% for the year.  Looking back at my trading activities for the 2016, I saw myself struggling between being a long-term holder or a swing trader. While my belief in the stock is solid (until new info tells me it isn’t), I’m constantly deciding whether to take profit, cut losses, or simply hold it. Thus, the decisions I made during the year were a mixed bag of successes and failures.  Since I’m ahead for the year, there were more successes than my fumbling errors.

Why don’t you just hold the stock if you believe in it?

Well, that is the hard part, buy and hold is really not that easy when I’m swinging for the fences. Once I caught the momentum going in, locking in gain would depend on my emotional tie to the stock at the time.  If I believe the stock could go much higher, I might end up holding far longer than the market was willing to give at the time. $DMRC and $SEED came into mind here. $DMRC gave me unrealized gain equivalent to 10%+ portfolio gain in early January and I didn’t take it ’cause I thought price could go higher.  It went back down instead.  With $SEED, I was also giving an equivalent 10%+ portfolio gain in late September for all of a few hours after the opening bell but gave it all back ’cause I did not believe the gain could evaporate in one day. It really didn’t matter whether the gains were there for a few hours or weeks, it was the decisions I made at the time that counted. Btw, for both positions, I held a swing-for-the-fences size which was the reason I could see the equivalency of 10%+ portfolio gain. I was greedy, it was that simple.

Will I make the same mistake again?  I thought I learned my lesson when I gave back the gain on $DMRC in January; but I made the same error in $SEED again.  So, I could only say that I need to remind myself again and again that there are ALWAYS traders out there who are taking profit while I’m dreaming about even more future gains.  Of course, these traders might as well be taking profits too soon ’cause price could just keep going up. But what is the odd of price going much higher after achieving 10% in portfolio gain based on price movement of one stock?  It all comes down to probability again. But greed can get in the way of this thinking easily.

Apart from giving back two major unrealized gains, I’ve also forsaken lost opportunities ’cause I played the safety route.  I bailed out of my swing-for-the-fences position size on $AMRN in late July when it was trading at $2.3x before the strong rally to over $3 bucks. I did that ’cause somebody dumped a huge amount of shares that day and tanked the price to low $2.1x.  Despite a strong bounce-back in price action, I took the safety way out by selling out my position after the bounce thinking I was lucky.  Talked about bad timing, price kicked off a strong rally for the next seven days after I got out.  If I’d held, that would have been another 10%+ in portfolio gain.  There were other similar misses but I guess there is no point in rehashing my misses.

However, there were good wins that included catching $GWPH at the low $40 before the trial result was announced.  Other big wins included $CARA (I traded it several times during the year when price dropped to $5.xx), $AMRN & $SEED (before the big misses mentioned above), and $MTCH.  Of course, these gains were reduced by losses from $AKER, $DMRC, $BIOC, and drawdown from $IBIO. As far as I’m concerned, every decisions I made, good or bad, always offered me some lessons.

So what are the lessons in 2016?

Here are my Top 5 lessons::

  1. Don’t take anything for granted
    1. Watch price action of following days after strong rally
    2. Learn to take partial profit
    3. Do not predict future price target after strong rally
    4. Watch price action after sudden drop
      1. See if price bounces back quickly
        1. If bounce back up quickly, probability of sustaining current trend is still good
        2. Failure to bounce back meant the price drop might be justified
      2. Watch for new info that causes the drop
  2. Stay focus on the financial, especially the companies’ cash position.
    1. My biggest mistake in $BIOC was that I failed to dig deeper into their cash situation. My failure to read the fine print of their financing term with Aspire Capital Fund costed me unnecessary losses due to my holding the position longer than I should have. I kept thinking that the science would prevail with a sudden avalanche of orders from doctors and hospitals with their announcement of increased insurance coverage.  Obviously, I was guilty of complacency in this one.
    2. My second mistake was in buying back $AKER after I sold the day before without digging deeper into their 3rd Qtr 10Q financial to analyze their cash situation.  If I had, I wouldn’t have bought back the shares and therefore avoided the unnecessary additional losses.
  3. Be mindful of traders taking profit
    1. Unless I’m committed to a buy and hold long-term strategy, I’m essentially a day-trader or a swing-trader; thus, I must be diligent in taking profits when I see them; even though by doing so, I may forsake further gain.
  4. Be mindful of short-sellers’ tactics
    1. If I suspect of short-sellers’ tactics, I must decide whether to flow with their action by taking profit earlier if I’ve them or stay away from the stock if I don’t have a position yet.
  5. Always be diligent in watching my own thought process
    1. Is my ego talking or the objective mind making an analysis?
      1. If in doubt, either get out or flow with the price action on the chart
    2. Is my emotion dictating my action?
      1. If yes, stay focus on the fundamental and the charts
      2. If no, is my action in sync with the price action on the chart?
        1. Is my action conforms with the technical analysis on the chart?

I may need to come back to this post from time to time to refresh myself of the lessons learned. And now, on to the…

++++++++ Prosperous New Year ++++++++

And so we begin the new year in 2017

I’m excited about the prospect of my current positions in my main port for 2017:

Here are my logical deductions for my bets:

  1. AMRN
    1. Amarin’s Vacepa weekly script # breached 20K in December and is gaining market shares almost every week.  I expect to see script # continuing onward above 20K in 2017.
    2. There is going to be another interim data review in 2017 and this will probably be the deciding factor of whether Vacespa can reduce cardiovascular events while taking statin.  I expect price to climb upward in anticipating of good result. I’m seeing $5+ by end of first quarter if the general market remains healthy in its upward momentum.
  2. CARA
    1. Beginning 2017, every week is one week closer to trial results.  My 2 cents is that the ramification of successful trials is being understated at current price.  In time, market will eventually catch up with expected value of CR845.  If trial results prove positive, it is my 2 cents that the off-label use of CR845 may go thru the roof and possibly replace a lion’s share of the current addictive narcotic painkiller prescription.  This stock has the potential to see shock & awe price action with positive trial results.
  3. DUST
    1. Last week, I had the dimestore economic theory that inflation fear will drive gold price thru the roof.  Somehow, by Friday I changed my mind and believe that President-elect Trump’s stimulus package and interest rate increases from the Fed may drive demand for the U.S. dollar which makes gold bearish.
    2. Of course, $DUST being a 3x ETF, I’m fully aware of the violent price volatility; thus, this is only a standard size position and I’ll be mindful in taking quick profit if the economic wind shifts in mid-air.
  4. IBIO
    1. Plant-based technologies for economical production of vaccine and therapeutic drugs over the expensive traditional processes may become the new wave going into 2017.  Dr. Carol A. Feghali-Bostwick’s fibrosis treatment may also come into light this year.  I picked up more cheap shares under 40 cents in December. Thank you very much!  Watch the video again:
  5. LEU
    1. In the past, I’d traded USEC Inc which now becomes Centrus Energy Corp ($LEU).  I believe my past trading experience with USEC Inc prepared me for the $LEU bet in 2017.
    2. Here is my take of $LEU.  While it appears that President-elect Trump is in cordial term with Russia as opposed to current administration, I believe President-elect Trump is prepared to out-spend Russia in the military infrastructure.  Remember, President-elect Trump is a businessman who has successfully turned his father’s multi-million dollars business into multi-billion dollars businesses.  And most successful businessmen always maintain a cordial relationship (in public appearance) with their fierce competitors.  It is the behind-the-scene actions that ultimately dictates the winners.  I believe the time is ripe for $LEU to become relevant since it has the mean and capability to operate the country only uranium enrichment facility if President-elect Trump so orders it. Thus, I’m very bullish in $LEU.
    3. This FACT SHEET: National Security Importance of U.S. Enrichment Capability from Centrus Energy Corp is worth a read:
      1. http://www.centrusenergy.com/wp-content/uploads/2016/05/National-Security-Importance-of-US-Enrichment-Capability.pdf
    4. Last week, I stated that $LEU was a standard size position; after further digging, I upgraded my position size on $LEU to swing-for-the-fences.

In a nutshell, I’ve put up stakes in the above stocks and see where they will take me in 2017.  With so much catalysts that are happening in 2017 for these stocks, I may even resist trading them since it is easy to miss the boat once you hop back on land.  Before you can turn your head to see if the boat is still there, it’s likely not there anymore.

Current positions:

Main port (no margin): IBIO  CARA  LEU  AMRN  DUST and 25% cash. (up 33% in 2016)

Trading port (with margin): IBIO down 28% & MENXF down 31% on positions only and up 2016 on port. Holding GRWG to invest in the cannabis sector.

My 2 cents

From my camera:

034



Categories: Daily trading Journal, trading journal, Trading philosophies and thoughts

Tags: , , , , ,

2 replies

  1. Interesting comments on BIOC—–What did you find out about Aspire??? I was thinking about buying.

    • Hi adamr, The Aspire finance was an older financing arrangement which I believe is no longer relevant at this point. It has been awhile since I cut my losses in BIOC; therefore, I’ve no clue as to their current financial arrangement. You need to look at Biocept current cash situation and see if there is a need for further dilution.

      Z

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