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Robert Weinstein

 
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  • Netflix: Short the Stock, Hedge Your Timing to Avoid Getting Squeezed [View article]
    Thanks for the kind words.

    I do agree NFLX is a good company (but I would have a difficult time agreeing the stock is a great stock). I think the bonds are a good buy as well.

    I too will look for NFLX to buy if the price continues to go down and the earnings rise enough to bring down the PE.

    Best

    Robert
    Mar 9 11:21 AM | Likes Like |Link to Comment
  • Apple May Become Sirius Radio's Next Biggest Threat [View article]
    Lots of replies. Wow. Some less than what I would consider "professional" while at the same time even accusing me of the same.

    TripleG is in part at the heart of my argument. He is simply wrong and yes you can have internet in your vehicle. More importantly I believe it can be done at a lower cost than $SIRI and that spells trouble for SIRI.

    I recently took a trip for about 100 miles. I subscribe to SIRI and I have a portable radio that works in my car or home. I had the choice without any cost to use the SIRI radio on the way up or plug in my Sprint Evo phone that gets Pandora through 3G. While not everyone would pick Pandora I picked it because I like it better. I simply plugged the jack from my phone into the jack into the radio.

    If $AAPL enters into the monthly subscription plan for all the music you want some will decide that they will give up SIRI and go with the AAPL plan. Since SIRI largely has fixed costs this pretty much goes right to the bottom line.

    If AAPL gets a deal you can consider it likely that others will too. Add in Pandora and others that are free and you have "headwind" against SIRI

    I think it is safe to say that smart phones are becoming more popular making the process of using your phone as the receiver for your vehicle's radio more common.

    Next point, I think TripleG has it wrong about cars. I believe we are a very short time away from seeing internet enabled cars on the road for navigation, radio etc.... If my pocket phone can do it I am sure adding the feature will not be "mission impossible"

    Next point, I recall reading in the WSJ a few months ago about Howard Stern renewal with SIRI. My thought was there was little competition with SIRI if Mr. Stern wanted to avoid filters. Wtih internet radio you don't have the FCC breathing down your back like you do with FM.
    Once you accept that it will be easy for people to add internet radio to their phones which can connect to their vehicles (or vehicles by themselves) it is easy to imagine that internet radio stations offering premium content will become more popular and create competition for SIRI. If AAPL starts to offer a subscription service how hard is it going to be for them to start offering other premium content?

    How much will SIRI make this year? two cents, three cents maybe and that is if things go well. You can bury your head in the sand if you like but internet radio is on the way.

    No need to kill the messenger for figuring out what appears to be a giant leap of understanding for many.

    I have no position in SIRI or AAPL
    Mar 8 05:02 PM | 1 Like Like |Link to Comment
  • Vertex Is Not Cheap Medicine [View article]
    Just a quick follow up. I covered the call options today.

    I hope those of you that are long see the price of the stock rise from here.

    Best

    Robert
    Mar 8 01:10 PM | Likes Like |Link to Comment
  • Asking Sirius Questions [View article]
    Hello Jeffrey,

    "MBA from Columbia University", that is impressive no doubt. I have had a few MBAs work for me so I believe I understand what it takes to get one. I myself do not have anywhere near your or Rocco's academic credentials so maybe I am not smart enough to understand why you would attack him personally. Why not just argue what is wrong about what he has to say? Would that not be of more use?

    How about if you share your last five year time weighted average return of your investments? Again, I don't have the schooling you do but I am under the impression that performance is what matters when investing. I could be wrong....

    Lastly, I don't agree with Rocco about being long this stock. I think SIRI is bad for investors for many reasons. Including the reason that pump and dumpers will more easily give people hope with their damn penny stock email pumps. SIRI PE is North of 100, APPL may enter the space, Pandora is growing and other players are going to be putting headwinds on SIRI. It "WAS" a great investment for those that bought the lotto ticket but going forward I believe the end of the song may be near

    Best

    Robert
    Mar 7 09:26 AM | 4 Likes Like |Link to Comment
  • Vertex Is Not Cheap Medicine [View article]
    Hello Puddenhead,

    Thank you for reading my article. Thank you also for giving me the honor of being the only post worthy of your time to make a comment. I consider it especially flattering when someone views my article as the most important use of their time by returning their thoughts.

    I get asked this type of question a lot so it appears it is a common misunderstanding with investors so it is good you brought this to light. I will be happy to explain it to you as I have with the following articles (you may want to read them as well so you can truly get the best complete understanding)
    seekingalpha.com/artic...

    seekingalpha.com/artic...

    seekingalpha.com/artic...

    These three are news based fast risers that are "going to the moon". There are many more that I have wrote about and you can read them also but these seem to illustrate the point well.

    Since you traded VRTX for many years you might as well learn how stocks are traded. What we have is an auction sale system where the parties are matched up when someone is willing to pay more than anyone else at a given time as well as when someone is willing to be the lowest seller of their stock at a given time. Since this process takes all day and is not a once a day type of activity and not done at one set price (like a MOC or a MOO) emotion plays a big part in what the current price of a stock is worth. The stock unlike the company can go up and down in value all day long. Because of this process stocks will very often have an imbalance of relative demand for the stock causing the price at times to go higher than the company is really worth or less than the company really is worth based on all available information.

    News and all other known variables are generally priced into a stock within minutes of being public. As such all events that are not brand new news are priced into the stock. A very quick and effective method of demonstrating a lack of the auction process is to bring up points about a company that is not "hot off the wire" as professionals will smile and say "good research" as they roll their eyes at the person who declares something that is already being discounted. The important thing to remember is the emotion part. Often in the auction sale process emotion takes hold (as it does in any auction live or online) and the correlation of the price of the stock moves what I consider to far away from the value of the company. VRTX stock in my opinion has moved to far to quickly combined with the higher IV of the options giving the current call premium a value higher than the fair value. The difference is the amount I expect to make by selling the calls.

    As written before but perhaps you missed,
    If you can explain why the price of the stock will rise faster than the option premium will decay you have something to say. Otherwise your demonstrating your emotional attachment to being right about this stock and not much else to me.

    You can buy the calls on Monday if you like and who knows, maybe you will be the lucky one and this will be the one out of 20+ that doesn't make money for me. It is not a big deal for me but perhaps for you it will be. I have the odds stacked in my favor (which is all I can ask for. I predict odds not the future) and you have what is likely to be my next example with the next stock I short and write about.

    Enjoy your weekend and best to you

    Robert
    Mar 5 07:33 PM | Likes Like |Link to Comment
  • Shorting Disney After It Beat the Estimates but Failed to Move [View article]
    Brightside,

    Well it has been about a month now. You can take a look and see how they both worked out.

    Best

    Robert
    Mar 5 06:47 PM | Likes Like |Link to Comment
  • Netflix: Short the Stock, Hedge Your Timing to Avoid Getting Squeezed [View article]
    Just a quick follow up.

    It does appear that we hit the top of the short term move. I am still bearish but at $30 less a share not nearly as much as I was. The price appears to have found support at the 60 day moving average and I would not be afraid to take some off the table if short and you rode it down this far.
    Mar 5 06:42 PM | Likes Like |Link to Comment
  • Vertex Is Not Cheap Medicine [View article]
    Golfing,

    With respect, it appears to me that your critiquing me for doing something that you yourself are not doing in regards to this article.
    From my article:
    "I use a proprietary mix of technical analysis, financial crowd behavior, and fundamentals in my short-term trades." Sir this may not be clear enough and I apologize but I am trying to say it is a blend of factors that brings it all together. I did not write 1k words about the technical aspects even though I could have. The same is true about the fundamentals. It is not necessary because more is not always better.

    "I believe the company and the company stock correlation have separated, thus leaving the stock to be over-priced relative to the performance of the company."
    AND
    "I want to sell options so that I may be able to capture time decay that writing options provides. The implied volatility was high enough to justify the limited reward if correct and risk if wrong for me."
    THIS MEANS that I believe the option premium will decay faster than the stock price will move higher.

    Now sir, if you can make a logical argument of why it is wrong to believe the the price will not move higher in the next month relative to the option premium than please do so. Otherwise your comments show me that you have not the first clue as to what this article is about. Here is a link to help you get started en.wikipedia.org/wiki/...

    After you have figured out mathematically that the probabilities favor a stock that exhibits the same price action that VRTX has shown there is an edge in buying the calls please come back and show your results in another comment. Also at that point if your confident is your findings I would imagine you will buy these "cheap" calls with the thought that they will make you money.

    As you hopefully can see by now you have been writing about something that really has little to do with what my article is about. If your unable to calculate the probabilities of the stock / options there is no shame in admitting it. You can push the "follow button" and if you read more of my articles (I write a lot on this theory) you may be able to add a valuable stock timing tool to your investing toolbox. Also since you appear to be so well versed on the sublevel details of big pharma I may tap into your knowledge and we both are better for it.

    As you can see in my profile page, I very strongly believe in "keizen"

    Re: Rocco. I know him from being in the same chat room. We sometimes agree and sometimes do not. I have written comments that oppose and favor his articles. Rocco appears to be a nice guy that is the real deal with his writing. While I think he could spend his whole day writing articles and make a living at it he invests in what he writes about which I find to be a lot more creditable than those that say one thing and often do nothing or even do the opposite. He is not my "buddy" and I have never met him. From what I know of him he would be someone I would like to be able to call my friend. I suggest you read his articles seekingalpha.com/autho.... He is a better writer than I am (currently...LOL) and like all the people in the chat room we tend to try to help each other.

    Best

    Robert
    Mar 5 10:24 AM | Likes Like |Link to Comment
  • Vertex Is Not Cheap Medicine [View article]
    Golfing,

    Thank you for reading my article.
    You may have a better understanding of the company than I do. At the same time your lack of understanding of how one can put capital to work without knowing a company does not mean it can not be done repeatedly with success.

    I fade stocks for a living and have done so for years. Often times I do not even know the name of the company much less what they do or what the numbers are. Normally when I do know more than the symbol it is because it is either a familiar name or I have traded it enough times to get to know it.

    Had you read my article and then went and spent the time understanding what type of money manager I am you would have quickly found out that I almost always make money with a success rate well over 95% of my allocations. Few can say that and I trade on any given day several stocks/options. I spend my time focused on learning chart patterns because they repeat over and over. The reason is simple, most people when given a stressful situation (making quick trading decisions) will act relatively in the same manner.

    I doubt any comment here has spent 20+ hours studying this stock but even so do you really think that a couple of days research is going to give you an edge that large money is giving up?

    Your talking about the company and I am talking about the stock. You may know the company better than I do and I will give you that but I know the stock better than you do and that is what determines who gets paid. As far as this stock goes it does not matter in the slightest if I make money on it or not. Statistically I have an edge and given enough trials I will make money. Its as simple as that. No emotion and pure math is what wins the day. For this stock to trade higher you will need someone to look at it and pay more than what it is at now with the thought that they will be able to find another person behind them that will also believe that they can buy it at the higher price and then in turn sell it to another......
    The game doesn't last typically very long when the lines on the chart are going straight up. Absent any more positive news the volume will dry up about 90 minutes after the open on Monday and the price will start to become weak. Stop losses will kick in to protect profits, shorts will build confidence which creates a feedback loop and the price stops moving higher. This happens like clockwork over and over. The stock had three up days in a row. It only takes two for your brain to believe there is a pattern that it will keep going. Today's up day just simply reinforced the incorrect belief and gave confidence at the worst possible time.

    Best of luck to you guys

    Robert
    Mar 4 10:26 PM | 2 Likes Like |Link to Comment
  • Vertex Is Not Cheap Medicine [View article]
    Hello Dean,

    Thank you for reading my article and your kind words. Congrats on being long VRTX. If you have been long for any real amount of time your doing very well.

    I did not add to the 50s today and my mark to market today is about down 75 cents. I did add the 55s today and they are down about 10 cents.

    Thanks for your concern about stepping in front of a freight train. I get that a lot. Some people get to know a stock (or small number of stocks) really well. I have studied just a few signals that are highly effective and provide a real edge. Shorting strong (often the strongest in the market) is what I do every single day. I usually do it more than once per day as well.

    I would argue that it is not the type of trading one does that can cause a trader to get "crushed" but rather a lack of knowledge in a type of trade. I trade overpriced and gaps very well and when I try to trade other types that others in my chat room trade I usually end up taking a loss. So you can see that I am very much in my comfort zone and I welcome anyone to take a look at my results and see that there is more than one way to catch a mouse.

    Best and have a great weekend

    Robert
    Mar 4 05:51 PM | Likes Like |Link to Comment
  • Vertex Is Not Cheap Medicine [View article]
    Thank you for reading my article and thank you for your comments.

    Just an update. I shorted the April 55 Calls into the close.

    Thanks and have a good weekend

    Best

    Robert
    Mar 4 04:16 PM | Likes Like |Link to Comment
  • Two Unloved Stocks Ready to Break Higher [View article]
    Thank you and yes, I actually talk about this issue on many of the stocks that I write articles about.

    What many do not understand (even some who you would think should) is that a stock and a company are not one in the same. They are talked about as if they are the same all the time and perhaps that creates much of the confusion. Stocks are only correlated to the company they represent. This correlation changes in various degrees depending on the company. For example GE which I have traded for years had a very high correlation between the stock and the company. Basically most stocks that are trading in a range for a long time can be assumed to have a high correlation. Than when the financial crisis took hold GE fell due to GE capital and ever since it have moved around based on any given days news. CLWR and COCO have a lot of emotion tied up into the stock. There is a lot of difference in opinion on the valuations and a lot of "weak hands" trading the stock. This can cause the correlation to become weak and regardless of what the company is worth the stock is going to move based on what the talking bobble heads have to say that day.
    Don't get me wrong I live and breath this because if the correlation was pure and no emotion was involved I would not be able to make a living trading. I would further argue that most investing is based on the belief that one can figure out better than another what the stock will do because of what the company will do.
    Mar 4 12:08 AM | Likes Like |Link to Comment
  • Two for Tuesday: Short Ideas [View article]
    Hello Carl,

    Thanks for your comment and reading my article.

    Even though we are on opposite sides of the fence I really think your comment is well thought out.

    CDE is a tricky stock to be shorting but I am pretty quick on my feet and shorting strong stocks is what I do for a living. So I am very comfortable in this space.

    It would appear that some shorts did get caught with their pants down as the stock was bid up in after hours in what appeared to be short covering. I added to my short in what I like to call "the second mouse gets the cheese". We will find out if that was the best choice or not soon enough. I would rather be selling option premium with CDE though and may just cover the stock and deploy the capital by writing front month calls.
    Mar 3 11:56 PM | Likes Like |Link to Comment
  • Two for Tuesday: Short Ideas [View article]
    Thanks,

    One sure could and limit the risk if price works against you.

    I shorted CDE into the close today for an overnight trade.
    Mar 3 04:10 PM | 1 Like Like |Link to Comment
  • Forget Pandora, Will Clear Channel Crush Sirius? [View article]
    Great Article Rocco,

    I just canceled my renewal with SIRI. Maybe it was my XM radio (only about two years old and the top end that they sold) but CNBC was delayed about 30 seconds give or take. I ended up subscribing to CNBC online.

    I use either FM or Pandora online radio now and never use XM anymore. I am going to sell my xm radio on ebay in the next few days.
    Mar 3 09:17 AM | 3 Likes Like |Link to Comment
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