Seeking Alpha

Pitbull Trading's  Instablog

Pitbull Trading
Send Message
Currently up 23 percent YTD. Positive equity trading results in 15 of the last 18 Months. Former Hedge fund trader, Professional Equity Researcher, Paid Blogger, Bitcoin Specialist/ Trader, Entrepreneur, Venture Capitalist. Typical Equity Trading focus on High-Yielding equities and/or... More
My company:
Williams Equity Management
My blog:
pitbulltrading.blogs...
View Pitbull Trading's Instablogs on:
  • Why Google is becoming a Value Play
     

    It is time to consider buying a blue chip company that is becoming a value play in this current market. I am talking about Google, a strong business that is poised for solid future growth is being currently discounted by Mr. Market. There is no reason for GOOG to have a forward P/E of 15. This represents a very attractive level for  Google, whose android platform and the exponential increase in smart phone usage for everyday life will drive earnings higher in the future. Not to mention the domination of search and online advertising that only a fool would think they stand to lose market share in. 

     

    People who are infatuated with Apple or RIMM are not seeing the future clearly, these 'closed' platforms are too limited and their individual companies pride will not allow them to turn things around in time to stem the android tsunami. Take a look at the disaster that RIMM has become for an example, I personally do not think Apple can keep their brain-washed, money-wasting followers happy with continued mediocrity such as the Iphone 4 either. The competition is catching up and hardware is not the place you want to be when that happens (think Dell 10 years ago). The long-term gold to be had in this whole smart phone revolution lies in the software, and that is where Google has decided to lay it's chips. Android will no doubt power a similar percentage of smartphone devices as their search engine currently dominates it's market. Google will cleverly figure out ways to profit from ads and mobile search ability (think walking down a local street and searching 'pizza' on google maps). They have the best talent, minds, and creativity in the world, as well as the strongest brand name that ever existed. That my friend is what Warren Buffet would call a 'sustainable competitive advantage'. Not to mention Google has 30 billion in cash and no debt on the balance sheet, and the fact that they were hiring last quarter shows me the makings of a company that is not afraid to invest in growth. I disagree with the analysts who derided their decision to not be misers with their cash, after all I invest in Google because it is a growth stock, not some waste of time like Microsoft. 

     

    In essence, At below $500, Google represents a very fairly valued company with plenty of upside in a high growth potential sector: Technology. They are the best of the best and have proven since their IPO that they know how to manage a business for the long-term, and not quarter to quarter with tricks to appease the analysts. I would put my trust in management to reward shareholders who are willing to stick it out and let their creative intelligence bring in the cash flow. I personally recommend buying 33-50% of your position here and be willing to buy the rest if Google for any blessed reason spikes down closer to the $450 area anytime in the near future. 

     


    Disclosure: Long Google
    Tags: GOOG
    Aug 11 11:15 PM | Link | Comment!
  • 07/08/2010 - Trade Alerts
    If you can recall the stress tests our banks here in the United States endured and the resulting share price rally then you may want to take a look at some European banks. We are seeing a re-run of our own governments' clever move to instill confidence in the market with a silly bank "stress test" that we all know the banks will 'magically' pass. This instills confidence in the markets and the speculators leave their bunkers and come out to buy bank shares hand-over-fist. 

    I am not stating that I know or think any of these banks will be worth anything in the long-run, but I do think if you buy IRE and AIB at these levels, you can make a quick 20-50% profit in maybe 3-6 months time, or sooner. It is an easy trade that you want to be involved with when the sheeple pile in. I would also consider RBS, LYG, and BCS for some pin-action possibly. 

    Some Chinese Small Caps that are undervalued and worth purchasing: CSR, CHNG, CCM, ZSTN, HOGS.

    Also GOOG, DSX, GST, SSLTY, EROC are a good value at current levels. 

    Don't you guys love free money?


    Disclosure: Long every stock mentioned.
    Jul 09 12:59 AM | Link | Comment!
  • No one ever went broke taking profits

    I think the old market adage, "Nobody ever went broke taking profits" is a market truism that helps remind investors of the number one reason for being in the market: to MAKE MONEY. It is impossible to truly make any profit in the market unless you pull the trigger and sell some of your gains at some point. This of course leads to the problem of trying to 'time' or 'predict' the market, or making up an arbitrary profit target such as 25%. This is one of the first things my mentor told me when I 'chumped'(sold too early) a trade and took my gains way too soon. It has taken me years of trading to understand the importance of locking in gains on your profitable trades and on the flip side, cutting your losers short when they turn sour.

    My personal style of trading involves targeting undervalued companies at a price target and I scale into my position when the stock reaches that price target. I typically buy in 3-4 separate purchases, ensuring a good overall price. I typically sell in at least 2 different orders as well, to try and get a good average price exit. The counter argument to my style is that you should just buy once and sell once at the best prices, but in my experience this is much easier said than done and I have had better results with using my scaling technique. I think it is too hard to time the market anywhere near perfectly, and using my technique will allow you more leeway to maximize your profits and limit your losses.

    Another tactic I have been using more recently is to leave my profits in a winning trade in that stock. For example, If I decided to trade Google, and I was up 25% in three months time, I would sell my original investment and leave my 25% profits as Google stock. This does a few things for my porftolio and overall strategic allocation. Now I have shares of a company that I never plan on selling to add diversification and potential growth to my portfolio. For every successful trade I complete using this strategy I add more diversification and another potential long-term winner to my portfolio of stocks. One of my favorite types of investments to employ this strategy on are dividend payers that have a strong business model, which then provides you with a lifetime income stream to invest as you see fit. If you have a long investment horizon, then I believe this strategy would help you become very diversified across many sectors, industries, countries, etc as you reach closer to your retirement age. This would help you weather severe downturns and abrupt changes in any individual markets.

    In addition, there is nothing saying you can't revisit a trade you have already successfully made, and currently hold "profit shares" of. If the price reaches an undervalued level again, you can re-enter that trade and attempt to 'capture' more shares. One of the side-benefits of this strategy is that you keep your eye on many different equities and investments that you at one time thought were a good buy, prompting you to at least do some homework on them if you see a future opportunity in that issue. An obvious side-effect of this strategy is that you are going to cash out your gains(hopefully) when the underlying stock/sector are hot, and leave your "profit shares" to potentially languish or even lose value as you look towards the next opportunity. This helps to act as a hedge over time and help discourage you from "putting all your eggs into one basket" and risk too much of your net worth in a single hot investment.

     As a disclaimer, this is a strategy that I have found to be worth employing in certain instances and may not be right for everyone. Individuals have their own risk tolerances and trading styles that they need to find in order to be a consistently successful trader. I wish only to offer strategies and ideas to stimulate investors thought process and point them in directions that may be beneficial to them.

    One last quick note on something I have found to be a solid market wisdom. When in doubt of whether or not to take profits, sell half of your position, and be patient. You can always put on the trade again if the market tells you to or if something fundamentally changes in the stock.



    Disclosure: No positions
    Apr 02 2:13 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

  • $XONE will explode here pretty soon... 36% of the Float is Sold Short. Only 7 days to cover. Everyone knows $XONE Will Beat on Earnings! $$$
    May 6, 2014
  • The Tide has Finally Turned. The rally is upon us. Get ready for Helicopter Ben to Ride Again! RHP LONG $GST. Undervalued by 50% at LEAST
    Jun 13, 2012
  • $AAPL Now up 45% YTD, Can't wait to watch the upcoming Train Wreck!!! Will be UGLY bc there is no fear of downside. #SorryBagHolders
    Mar 14, 2012
More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.