John Petersen's  Instablog

This post has 11 comments:

Register or Login to rate comments »

H. T. Love Comments (13217)
 
Oh that it were a price chart! >8-O

But it's coming, it's coming! When is the only real unknown I think.

HardToLove
1 May 2012, 07:25 AM Reply Like

John Petersen Comments (22476)
 
I've always tracked volume because of the ancient market wisdom that price follows volume. As long as the buy side is covered, the sell side has to run out of stock eventually. The thing I like best about the chart is the conviction that I know where most of the buying has come from.
1 May 2012, 07:49 AM Reply Like

Gary Jakacky Comments (1832)
 
John is that YOU out there buying all those millions of shares every month!? Save some for us poor proletarians. :)
1 May 2012, 10:36 AM Reply Like

John Petersen Comments (22476)
 
I haven't been buying or selling because it would take an immense pile of cash to make a real difference in my average purchase price. SA Users who read my work, on the other hand, have been stuffing shares into the sock drawer for a couple years now. Things should get very interesting when the willing sellers run out of stock.
1 May 2012, 10:44 AM Reply Like

481086 Comments (2607)
 
John, just curious... what would the chart above look like in total dollar volume, ie monthly share volume x avg price for that month? Would we see a similar ramp?
1 May 2012, 10:58 AM Reply Like

John Petersen Comments (22476)
 
The shape would be a combination between a volume chart that mounts steadily and a price that chart that bounces around like a ping-pong ball. The long term value ramp is impressive, but less so than the volume ramp.

For January 2008 the total value of shares traded was about $15,000. In April of this year it was $164,000. The all time peak was $630,000 in March of last year. I looked at my workbook to see if there was any easy way to create the data and unfortunately there isn't.
1 May 2012, 11:28 AM Reply Like

481086 Comments (2607)
 
"The long term value ramp is impressive, but less so than the volume ramp."

Still sounds like a good thing. Or as Martha would say, "a *very* good thing."
1 May 2012, 11:45 AM Reply Like

astroboy7 Comments (22)
 
John, you really have to be careful with fitting that exponential ramp to the data. See what happens when you just take data from Jan 11 to the present. I think that ramp will look a lot less impressive.

You have taught me much about finance, maybe I can teach you something about data analysis?
1 May 2012, 04:46 PM Reply Like

John Petersen Comments (22476)
 
I picked the starting point because I started blogging in July of 2008. I we went all the way back to 2004, the progression would have been:

2004 – 244,369
2005 – 326,500
2006 – 1,095,500
2007 – 833,300
2008 – 1,902,700
2009 – 7,176,200
2010 – 22,016,900
2011 – 77,691,400
2012 – 32,887,700 (to date)

After four years of 200%+ annual growth rates the volume ramp is starting to slow. That doesn't change the fact that the history over the last four years has been darned impressive.
1 May 2012, 05:05 PM Reply Like

colodude Comments (125)
 
A logistic fit would put a cap on mean trading volume at basically twice the height of the inflection point. Just gazing at the chart, it appears that 8-10 million shares will be the initial leveling point. Question is: What condition will change the equilibrium? More positive stories, of course, and fewer estate sales....two more good strategic stories of the Norfolk Southern type should raise the inflection point a couple more million per month. Price? 25%? All the SMA's are close and level. But then there's Greece and Spain....
12 May 2012, 11:31 PM Reply Like

John Petersen Comments (22476)
 
I've never watched a stock go through a beat-down and wallowing process for this long so it's real hard to pick an upside number, but I think it's way more than 25%. In December 2009 I viewed $1.15 as the floor because it was 2x the 2009 placement price. Adding valuation bumps for a disclosed relationship with NS in the summer of 2010 and a disclosed relationship with BMW in the fall of 2010 should have been good for a double, and then PJM demonstration and an NS buy decision should have been good for another bump.

A year ago January the stock started a run and went smoothly to $1.20 before three big holders started beating it down. This time I don't see any holders with enough weight to squash the run so I'm not sure how far it goes or how quickly it gets there.
13 May 2012, 12:20 AM Reply Like