Stock 1
Alright, so there was a quite nice week for this one. I am very well on target with a good rise just as I had on my mind. I will continue to hold for several reasons. One is the ongoing undervaluation and another is the commodity cycle. As the underlying commodity might soon to be scarce, the spot and futures began to rise sharply. That leads to higher sales of this company, which will result in a higher stock price. Even the Friday rise by ~8% is not nearly enough, if material is less available because miners got shut down in China. Its a quite complicated bet, but if one studies enough, money is on the street. See the 4 hours chart. The blue line is the buy-in (1,26$).
Stock 2
This stock keeps to be a heavy mind tester. It is massively overbought, overvalued and I am hard to keep my estimate about where the price belongs, while the trend goes to the upside, not down. It went to the “wrong” direction and a negative number in the balance is very annoying to see. But I need to be strong here and keep sticking to my plan and “dumb” estimate about the fundamentals of the stock. These fundamentals are devastating. It is a 300 Billion $ software company that is worth maybe 6 or 10 Billion $. It reminds me of Nokia in the dot.com bubble. But this one seems to be even less based. Sure they have a nice software now, but what about the future? I assume people don’t understand the software, the financials or the purpose of the company at all. The most foolish are buying here. So I added another short bet and related to my account size, I am heavy in negative numbers. The mean buy-in price is now 139 $ while the current price is 153 $ with a top around 155 $. But as seen around the end of June there was a heavy downturn and that could happen again. I am betting on it.
Numbers
So here are the numbers of week 02. I am still going with no stops or limits. Maybe that was a mistake for stock 2, but for now I stick with my decision as the valuation of the company is around 5000% wrong. It is very hard for me to believe that this trend is going much further.
The profit is now at 37,4%. Let’s see what the next week will bring.