Jay Unni, M.D.'s  Instablog

Jay Unni, M.D.
Send Message
I'm currently a resident Psychiatrist in Houston, Tx. I previously worked as an analyst in Dallas. I keep a value portfolio and speculative portfolio. In my value investing work, I use a valuation framework influenced by Joel Greenblatt, Peter Lynch, and Ben Graham. In my speculative portfolio,... More
My blog:
  • The Twilight Zone Is Over For 3D Systems Corporation (DDD) 1 comment
    Jan 31, 2013 8:47 PM | about stocks: DDD

    Back in December, I hypothesized that 3D Systems Corporation(NYSE:DDD) was in a reflexive boom-bust sequence. I outlined the stages of such sequences, and argued that the stock was in the Stage 4 - when the upward motion of stock price and earnings were mutually reinforcing each other, so normal rules of stock analysis no longer applied. Accordingly, I went long, in a speculative position.

    On Monday, the tipping point was reached (Stage 5). Several articles came out in the past few weeks that argued that DDD was a bubble waiting to pop. It seems that this argument has convinced the market. The stock fell hard on Monday.

    This was followed by two-three days of a twilight period (Stage 6). I sold out of my long position, able to recover roughly 40% of the maximum profit from the speculation.

    As I argued on my blog, Stage 7, the massive sell-off, was delayed by short-sale restrictions that were put in place on Monday. Shorts could not enter new positions until Wednesday. Since that time-limit has been passed, we are now seeing the sell-off that would be expected from the "bust" part of the process. Accordingly, I have gone short, via put options.

    Let me be clear: I do believe the technology has immense potential. 3D printing will likely become a huge driver of manufacturing growth over the course of the next decade, with the biggest innovations coming from consumer-geared products. However, I am merely seeking to describe the course of events in the introduction of revolutionary technologies, especially those financed by equity leverage. Though I am sure 3D Systems Corporation will be a "buy" again someday, for now, it is a "sell."

    Disclosure: I am short DDD.

    Additional disclosure: Short via March and May $45 put options.

    Stocks: DDD
Back To Jay Unni, M.D.'s Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • Jay Unni, M.D.
    , contributor
    Comments (78) | Send Message
    Author’s reply » I was a little too eager to call an end to the twilight phase with this post. However, at the risk of sounding like the boy who cried wolf, I do think it has ended now. Here is an update on the trade: http://bit.ly/14WWU18
    15 Feb 2013, 01:23 PM Reply Like
Full index of posts »
Latest Followers


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.