Weekly thought on $AEMD, $IBIO, $KNDI, $LRAD, $NIO

Before you read on, please be aware that the analysis below is my opinion only and may include flawed assumptions and inaccuracy of logic; therefore, caveat emptor applies here.  Furthermore, all emphasis (color-coded, boldness, and underlined) on the excerpts are my own.

The bull took a little time-out this week. SP-500_weeklyI guess it’s going to continue higher next week.

Let’s cut to the chase, the big elephant in the room is that I missed the $AMRN bet. A bet that would have given me a big win if I had taken it. But I didn’t. Nevertheless, hindsight has a way to make a fool out of us. I bowed out at the end because I let doubt ruled over my instinct. Instinct told me to keep the bet, but my analytical mind said “get out” because I had doubt in my mind about the effectiveness of Vascepa. With doubt, the whole bet became a casino bet. Black or Red? A number on the roulette table?  In any event, my doubt removed the leap of faith I needed to jump in front of a binary outcome- success or failure.  Therefore, I congratulate those investors who had committed to holding $AMRN for years waiting for the Reduce-it trial result. They deserved to win big.

How do we become doubtful?  The chat rooms are full of doubtful people. Almost all active stocks in chatrooms have doubters.  Doubt is our self-defensive mechanism dealing with uncertainty.  Too much doubt and you will end up going nowhere. Too little doubt and you may fall into potholes from time to time.  Per my 2 cents, doubt comes from our inability to connect the dots based on our perception of current incomplete data. Sometimes, even a staunch believer can turn into a doubter after getting burned from chasing the stock.  “This POS is not going anywhere!”  I call this group of doubters the “emotional” doubters.  Other doubters love to regurgitate the company ugly past performances regardless of the positive development in the current time. “Do you know they lost money for years and had to dilute a year ago?”  I call these doubters the “rear-mirror” doubters.  Then, there are the “analytical” doubters.  These are the doubters I paid attention to. These doubters have sharp questions regarding the technologies, the operational issues, and management issues of the companies.  “Where can I find the so-called Russian trial’s result that supposed to support the current trial here?  I can’t find it anywhere?” And thanks to these doubters, I saved myself from some severe damages.  The worse doubter, the one I detested the most, is the one who would lie or distort the truth to scare investors. “This company is going to file bankruptcy soon!”  is their common battle cry even though the company’s loan balance is significantly less than their cash balance. I call these doubters the “desperate short-seller” doubters.

Although I watched and traded $AMRN over the years, I did not have a strong connection to the science behind Vascepa. Even though I’ve been taking Vascepa for years, I also changed my diet to control my high blood pressure.  It was this little piece of information, improving my own diet to manage high blood pressure, that threw me and created doubt in my perception of Vascepa’s efficacy.  I became an analytical doubter asking, “What happened if the patient population did not change the diet that caused their heart condition?”  By asking this question, I created self-doubt which caused my perception of the bet to morph into a more dangerous one- the casino bet.  Hence, the exit of my position before the result announcement. In essence, I simply followed the time-honor trading wisdom, “when in doubt, get out.”  While the miss left a sting in the back of my mind, I take comfort that there are still plenty of other fishes to catch in the ocean.

If there is a lesson in this missed opportunity, it is that I must add more weight to my instinct when evaluating a trade.  If I had done that, perhaps I would wager a smaller bet so that I wouldn’t be entirely out.  The good news is that the $AMRN success, even though I didn’t partake on it, validated my instinct.  So, I’m satisfied that my other open positions have a good chance to follow the path of  $AMRN success.

I added $NIO this week to take advantage of the drop. NIO_dailyBecause $NIO is now trading near the Fib 78.6% retracement, I decided to buy some to test the support.  I’m expecting a bounce next week since price formed a doji bar on Friday next to the Fib support.

Fundamentally speaking, I’m impressed with their futuristic design of the future NIO EVE as well as their EP9 racing car.  Their current production run of ES8 is quite an elegant SUV.  I see $NIO as a  supplement to my $KNDI holding to cover the whole spectrum of EV buyers.

The question now will be how well the ES8 is being received in China?  Because the company failed to raise the total cash it needed from the IPO, the demand for the ES8 is the only metric that matter now regardless of how fancy their futuristic cars look like. Based on recent Seeking Alpha article, “Earnings Preview: NIO To Show Strong Order Growth?”  NIO’s ES8 has strong orders (aka unfulfilled registration) but slow delivery time.  Once NIO gets their production streamlined, the money will start to flow.

I’ll be watching $NIO closely.

$KNDI took a healthy correction this week after two strong weeks of upward momentum. kndi_weeklyAlthough a red bar for the week, it’s still one with a higher high and a higher low.

The reason I like $KNDI now is that of their recent introduction of EX3 which is an EV version of the popular Geely Vision X3 gasoline model (made by their JV partner Geely).  I see EX3 as an affordable subcompact SUV for the mass.  The price for the EV is in the lower range of all available BEV out there.  At this affordable price point, I don’t think buyers are going to complain about the speed performance of the EV; otherwise, they can always pony up the extra bucks to buy the more expensive BEV with the performance they wanted.  But for the mass, all they want is an affordable and appealing looking SUV to drive to work and around town.  That’s my bet.

$LRAD held well above $3 and the week ended with a higher high and a higher low compared to last week. LRAD_weeklyTechnically, there is strong support at $3.

What I like about LRAD is that it is not a biotech company and I don’t have to deal with standing in front of a binary outcome from future clinical trials.  Thus, I will never have to make a tough decision like I did with Amarin.  All I need to do is to sit tight and wait for the fundamental to develop.  My instinct told me that the technology behind LRAD is becoming more relevant in today climate.  So, I’m going to sit tight and expect to see a slow climb from here to double-digit.

Per my 2 cents, the acceptance of LRAD’s superior mass notification systems will be the catalyst for double-digit pricing of the stock.  And I’m patiently waiting for the announcement of a “city” to order the mass notification systems.  Once the mass notification systems are gaining traction by cities around the globe, then all I’ve to do is to sit tight on the stock. That’s my bet.

$IBIO held its ground this week. IBIO_weeklyTo me, it’s just a matter of time before some catalysts shake up the world of $IBIO.  With only 17.44 million shares outstanding and Eastern Capital owning 48% of the company, this tiny float of 9.07 million shares (17.44 x 52%) is going to be the driving force behind a parabolic run that will shock even the seasoned traders.  For those who have been waiting for years on this gem, just take a look at Amarin’s long-term investors who recently got their reward.  Amarin Reduce-it trial started on November 2011 and completed on September 2018.  That was almost seven years of waiting! Guess what?  Our time with $IBIO will come.  You can bet on the fact that I’m NOT going to make the same mistake I did with $AMRN. $IBIO at triple-digit is not impossible if their lead therapeutic candidate IBIO-CFB03 for the treatment of systemic scleroderma, idiopathic pulmonary fibrosis, and other fibrotic diseases proves to be effective and can REVERSE the fibrosis. I think my $AMRN miss is an education to myself so that I don’t mess around with $IBIO when it is developing since the profit potential is many many times larger than Amarin’s potential giving my relative position size.

$AEMD held well for the week without giving back gain from last week. AEMD_WeeklyViruses and exosomes removal using its hemopurifier to treat infected and cancer patients respectively are where the future money is. It’s a buy, hold, and forget.

Due to drawdown from KNDI and some poorly timed day trades, my port gave back some for the week.

Current positions (in alphabet order):

AEMD  IBIO  KNDI  LRAD  NIO & cash (up 29.3% YTD)

My 2 cents

From my camera:

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

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