Tuesday, October 31, 2006

Latest on ASVI

This morning, before the market opens, ASVI is reporting it's earnings for the 3rd quarter of 2006. Disappointing numbers, lower than expected are taking the stock price way down in pre-market trading at this time... bad timing on my part, getting hit by unforeseeable negative news.

Too late for me to bail out, I am holding the long position and will reassess the longer term outlook in the next several days, after the dust settles.

The good news is that the company has authorized a $50 million buyback of its shares over the next 3 years, this action tells us that it has a more positive view for the future.

Wednesday, October 25, 2006


Last September 20th, I saw good possibilities for SIMPSON MFG CO INC (SSD), through it's subsidiaries, Simpson Strong-Tie Company, Inc. and Simpson Dura-Vent Company, Inc., operates in the building products industry.
Eventhough it has been hurt by the weakness in the housing and construction industry, we may have seen the bottom for this sector.
Selling at 27.07 on that date, today is trading at 26.67 still looks attractive, formed a nice base on the chart with support at 25.
Average volume is 446,000, earnings have increased continuously for the last 7 years, trailing P/E is at 12.
The stock is widely shorted, but that may change on a strong upturn. It could have a very nice upside move if, within the next 2 weeks or so, it closes convincingly above it's 50 day moving average of 27.
I'm keeping an eye on this one.

Thursday, October 19, 2006

Possible turn-around

With the markets at or near an all-time high, finding value stocks becomes a bit difficult.
One company appears to be trying to make an about face from a two year low. Eventhough it is heavily shorted, if it's present trend continues, we may see a short squeeze, thus sending the price up.
The company is A.S.V., Inc. (ASVI), selling today at 16.60, it is engaged in the design, manufacture, and sale of track-driven all-season vehicles.
Good chart with support at the mid 14's level, fair volume (400,000 avg), fair P/E at 15, about 1.5 points above the 50 DMA, earnings have increased over the last 5 years.
A stock worth looking at.

Wednesday, October 18, 2006

Ten Trading Rules

I believe that the "Ten Trading Rules" are valuable guidelines and worth applying in the present trading environment.

This list is an excerpt from a commentary written by Todd Harrison, investment advisor, founder and CEO of Minyanville:

1. Respect the price action but never defer to it. The action (or "eyes") is a valuable tool when trading but if you defer to the flickering ticks, stocks would be "better" up and "worse" down and that's a losing proposition. This is a particularly pertinent point as headlines of new highs serve as sexy sirens for those on the sidelines.

2. Discipline trumps conviction. No matter how strongly you feel on a given position, you must defer to the principles of discipline when trading. Always try to define your risk and, above all, never believe that you're smarter than the market.

3. Opportunities are made up easier than losses. It's not necessary to play every move, it's only necessary to have a high winning percentage on the trades you choose to make. Sometimes the ability not to trade is as important as trading ability.

4. Emotion is the enemy when trading. Emotional decisions always have a way of coming back to haunt you. If you're personally attached to a position, your decision making process will be flawed. It's that simple.

5. Zig when others zag. Sell hope, buy despair and take the other side of emotional disconnects
in the context of controlled risk. If you can't find the sheep in the herd, chances are that you're it.

6. Adapt your style to the market At various junctures, different investment approaches are warranted and applying the right methodology is half the battle. Identify your time horizon and employ a risk profile that allows the market to work for you.

7. Maximize your reward relative to your risk If you're patient and pick your spots, edges will emerge that provide an advantageous risk/reward. Proactive patience is a virtue.

8. Perception is reality in the marketplace. Identifying the prevalent psychology is a necessary process when trading. It's not "what is," it's what's perceived to be that dictates supply and demand.

9. When unsure, trade "in between" Your risk profile should always be an extension of your thought process. If you're unsure, trade smaller, or paper trade, until your identify your comfort zone. Trading "feel" is cyclical and any professional worth his or her salt must endure slumps.

10. Don't let your bad trades turn into investments. Rationalization has no place in trading. If you put a position on for a catalyst and it passes, take the risk off win or lose.

Sunday, October 15, 2006


Stay tuned, I'll back in the next few days with some comments and updates after I complete this week's research.