Trade like NPH: Latest positions (with a new ratings system)

You mock my pain. – Buttercup

Life is pain, Highness. Anyone who says differently is selling something. — Man in Black

Well, the UNM Alumni Board meetings on Friday turned out to be rather intense (fun too) and I’m now back from ABQ and hitting the pavement full speed today.

It’s S’s over N’s this morning (trader-speak meaning that the tech-heavy Nasdaq is weaker than the S&P 500) and while I always remind you guys that it’s not wise to read too much into any single day’s action in any market or any single stock, the bull market we’ve been riding since the bottom of 2008 and also the bull market rally we’ve been riding this winter have both been led with the Nasdaq stocks. So if we start to see a S’s over N’s pattern just as we’ve seen the markets try to act toppy here, that would be bearish. One day of that is meaningless. For now. At least.

All that said, feet to fire swamp (ha! See The Princess Bride movie and that’s a funny joke, I assure you), I’d still much rather be long than short this market at this time.

Last week’s positions update was incomplete on two accounts. I still have those Amazon I’d bought as noted (see http://tradingwithcody.com/2012/01/31/another-very-high-risk-earnings-trade/). This is an updated list in order of today’s latest notional sizes by largest to smallest. I’m also adding a new feature to the “Latest Positions” posts like these, where I give each stock a current rating from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment” (there will never be a 10 rating, because there is no such thing as a perfect investment, of course):

Longs –

• Apple (9)
• Cisco (7)
• F5 (8)
• Google (8)
• Fusion-IO (8)
• Microsoft (6)
• Seagate (7)
• Sandisk (7)
• Amazon (7)
• Juniper (5)
• Nuance (6)
• Cypress (5)
• Autodesk (6)
• VIX (2 as a net position, but since this is a hedge against our longs, I’d rate it a 6 as a hedge right now)
• Riverbed (7)
• Visteon (5)
• DBA (6)

Shorts –

• LPS (6)
• Apollo (8)
• PNC (6)
• Wells Fargo (5)
• Live Nation (6)
• SLV (5)

The “Trader’s Thought of the Day” comes from a classic movie starring that kid from The Wonder Years, The Princess Bride:

Princess Bride Hill Scene

Now that I type that, I’m pretty sure I remember Neil Patrick Harris lamenting that he didn’t get that role back in the day. Hmm, that takes me to another trader’s thought of the day. Selling short that kid from the Wonder Years a year after that series ended and buying NPH stock a year after Doogie Houser ended would have been a wildly winning pair trade. Neil, like a great stock and company, has had many ups and downs over the years, but he’s been of the steadiest, hardest working people I’ve ever known (Neil was my best friend throughout childhood and he was an original investor in my hedge fund and he’s still a great friend to this day) and he’s got a product (his talent) that’s top notch and seemingly still improving with age. Think about the concepts of investing in your own career like that too. What does the stock chart of your career look like?  Buy the dips, sell the rallies?

Anyway, back to you with more in a bit.