Megaphone Pattern: Volatility ahead

February 6, 2013 Leave a comment

A rare megaphone pattern is setting up in the S&P 500 Chart.  When stock prices make higher highs and lower lows, it generally signals that there is a great deal of uncertainty (and subsequent volatility) in the markets.  You usually want to look for a breach of the widening trend lines for a indicator for longer term direction.

S&P 500 30 min Chart, freestockcharts.com

S&P 500 30 min Chart, freestockcharts.com

The austerity crisis has been temporarily averted, and, as expected, the markets reacted accordingly by breaking through previous levels of resistance.

S&P 500 Daily Chart, freestockcharts.com

S&P 500 Daily Chart, freestockcharts.com

January saw multi-year highs being made and is currently at levels not seen since 2007 (!).   With all this seemingly good news with the Dow breaching 13,000, there have obviously been numerous headlines exclaiming now is the time to jump back into the markets.  Indeed, January saw a large influx of funds from retail investors.  Unfortunately, I just can’t see how it’s a good time to jump back into the market.

For the bulls, we’ll need to see a breach of resistance at $1514.96 to see highers highs be made since we failed to make higher highs on 2/5.  Just keep in mind to protect gains in case of a break of support at around $1493 means, which means we’re heading down for a retracement.

It should be noted that all transactions described on this blog were performed on the Investopedia Stock Simulator and not in the real stock market.  I have no actual positions in any stocks mentioned nor will I be initiating any actual positions in the next 6 months.  Furthermore, the information on this blog should not be considered financial advice.  The main purpose of the blog is to educate its readership, myself included, about concepts and ideas that were previously unknown to me.

Categories: Stock Market Analysis

Science, People, IP

January 26, 2013 Leave a comment

or What Qualities I Look For in a Company.

After experimenting with various trading styles, it seems as though I am most comfortable as a Growth Investor.  Of course, the type of trader/investor you are is dynamic and can change with every trade you perform.  I’d like to consider myself a Growth Investor, but I also look at technicals and consider a company’s value before I buy, does that make me a Value Investor or maybe even a Technical Trader?  At our core, however, we all have our favorite ways of trading.  And if you don’t right now, yours will develop as you learn more about the market and what types of companies to which you are drawn.  Are you drawn to companies whose share prices have plummeted due to panic-induced overselling, but are still fundamentally good companies?  You may have been drawn to NFLX or RIMM and caught their recent price pops because they still have valid business plans.

For me, I’m drawn to biotech because of my experience in the drug discovery industry.  I really enjoy researching companies in the sector, seeing what therapeutics they have in the pipeline, and trying to predict how their pipeline fit in with the market.  It also helps me better understand the broader pharmaceutical industry, so I can do my actual, real-life job better. I like picking biotechs that I think will be high growth in the medium to long term.  So the title refers specifically to biotech companies, but the concept can be applied to a company in any sector when analyzing a potential investment of a company.

First and foremost, what is their Science?  In other words, what is the fundamental core of the company’s platform?  In the case of NFLX, their “science” is the ability to stream (almost) any TV show or movie at the click of a button.  No more speeding to blockbuster to avoid a late fee, no more scratched DVDs, and soon say “so long” to the days of sitting on your couch to watch a movie.  You now have the ability to stream anywhere you want.  This is the science behind NFLX and it’s seems to be a good business model.  Of course, they are reliant upon obtaining licenses from the industry for their movies, which is the reason why your favorite movie might not be available to stream.

Second, who are the People who run the business?  What have they accomplished so far in their life prior to their position in the company?  If they are young (as is the case with many tech companies), are they high potential individuals who are knowledgeable enough to know how to solve the company’s problems as they scale?  Look at ALNY, for example.  I’m extremely bullish on them for a number of reasons, but their management team looks solid.  There are Harvard MBAs, MIT PhDs, and a number of notable scientists on the Scientific Advisory Board.  Clearly, some pretty prominent people are leading Alnylam and, as such, I would anticipate them to be able to solve many problems they come across.

Third, what kind of Intellectual Property does the company own?  This particular metric is the X-factor for the company and one often overlooked.  Because no other company or entity can use another company’s IP, a company’s IP can help differentiate it from other companies in the sector.

Solazyme (SZYM) is a company that I’ve had my eye on for some time now because, in my opinion, it fits all my criteria for a fundamentally solid company in which I should invest.  Their Science?  SZYM is developing renewable fuel.  Think about that for 5 seconds.  I like big ideas.  I like ideas that will disrupt common thought.  I like ideas that completely and positively change the way things are done.  To me, this is one of those ideas.

O.K., you say, so they have a solid plan.  What kind of people are running the thing?  A PhD from Caltech, a few NYU MBAs, and a whole heck of a lot of combined operating experience.  And that’s just management, I didn’t even get to strategic and scientific advisors.  Needless to say, I think the team is doing a solid job, and will continue to do so. So, do they have any IP? Yeah, just a few patents.

So why aren’t I fully invested?

SZYM Daily Chart, freestockcharts.com

SZYM Daily Chart, freestockcharts.com

Technicals, technicals, technicals.  Since SZYM’s IPO, they’ve generally been in a downward sloping pennant.  It’s difficult to justify jumping into the stock with a chart looking the way SZYM does.  It seems as though many are scared off from the insider selling that’s been going on.  Particularly, there’s the curious selling from the CEO himself.  He’s essentially been dumping shares on the market monthly.  Regardless, I don’t mind eating crow for 5 years as the stock price most likely drops to $2.50, but they’re ramping up production and in the next few years, they’ll generate some strong revenue.  You heard it here first.

After starting a new portfolio from scratch this month, I’ve hit the ground running this year.

Courtesy of investopedia.com

2013, Stock Only, From investopedia.com

It’s difficult to believe ACHN has a market capitalization of only $744M when you consider that when Inhibitex was bought by BMS, it was valued at $2.5 billion.  I give a price target of $25.

So as you can see, I try to adhere to my investment thesis of picking high growth biotechs that are based on good science, are managed by a solid team, and own some key assets.  These are just a few of the considerations I look at when I’m analyzing a company.  There are others, but that’ll be for another blog post.

As always: It should be noted that all transactions described on this blog were performed on the Investopedia Stock Simulator and not in the real stock market.  I have no actual positions in any stocks mentioned nor will I be initiating any actual positions in the next 6 months.  Furthermore, the information on this blog should not be considered financial advice.  The main purpose of the blog is to educate its readership, myself included, about concepts and ideas that were previously unknown to me.

Options: What they do and how to trade them

December 26, 2012 6 comments

tl;dr version: Fundamentals teach you what to trade, technicals teach you when to trade.

Much has been written online about options, so some of this won’t be novel information, but I’d like to discuss some of the things I learned as I was learning about the stock market.  I’ll admit, learning about options was incredibly daunting; one look at a stock’s option chain ($AAPL, for example) is overwhelming at best.  But options are a great way to leverage relatively small amounts of capital for large gains.  My favorite sites for explaining options and different option strategies are The Options Guide and Option Trading Tips.

In short, buying stock options gives you the right, but not the obligation, to purchase shares of an underlying asset at a specified price (known as the Strike Price).  They are an amazing way to leverage your portfolio to make a higher percentage increase on your investment with every smaller percent increase in the underlying asset.  For example, a small increase in a stock can result in a much larger increase in the option associated with that stock.

When buying normal shares of stock, owning 100 shares of a stock priced at $100, means you’re holding $10,000 worth of shares.  Let’s say that stock price goes up to $105.  It’s now worth $10,500.  Ok, cool, we just gained $500 or 5%

Now instead of owning the stock itself, let’s say we buy 100 call options priced at $1.00 with a strike price of $110.  Keep in mind each call option is “bundled” with 100 contracts, so buying 100 call options (with each option containing 100 contracts) at $1.00 is worth $10,000.

A rise in the underlying asset some amount will result in the call option price to go up.  So let’s say the underlying rises to $105, the call option may rise up to $2.00, possibly more.  At an option price of $2.00, our 100 contracts are now worth $20,000!  We just doubled our investment.  Or realized a 100% gain.  This is the beauty of options.

There is one caveat with options and that is Time Decay, represented by the Greek letter Theta.  In order for an option price to rise, the underlying asset price MUST move (up for Calls, down for Puts).  If it doesn’t, your option price just starts to fall until expiration.  If your option reaches expiration without being “In the Money” (above the strike price for Calls, below the strike price for Puts) it will be worth ZERO.  In other words, your loss will only be what you initially paid for the option in the first place.

I like graphs, so here’s a graph constructed in Excel using OptionEdge’s option trading software (it’s free, I like free).

Call Option Graph, courtesy of http://www.oedge.com/index.php

In our example, we spent $10,000 on 100 options priced at $1.00 at a strike price of $110.  The green line represents our current profit/loss potential.  As you can see, when the price of the underlying rises to $105, the option value is $20,000.  If we were to sell, the option would be worth $20,000, thus making $10,000 in profit.

The red line represents what the option is worth at expiration, also known as the intrinsic value.  If the underlying asset fails to reach the strike price of $110, our option is worth nothing.  So going back to our example, let’s say our 100 call options are at a strike price of $110.  But by the expiration date, the underlying stock price only went from $100 to $105.  It’s a 5% increase from where it was, but still not good enough for our option to be In the Money.  So our 100 contracts that we had bought for $10,000, doubled to $20,000, are now worth a big fat $0 because we held on to them for too long and they kept going down in price due to the Time Decay. Bummer.

In other words, when buying Calls or Puts, the maximum profit is unlimited, while the maximum loss is only what you spent on purchasing the option initially.

The difference between the green and red lines is the extrinsic value of the option, also known as the premium.  As the expiration date nears, the price of the option decays and the green curve begins to look more and more like the red curve.

Option Price as Function of Time to Expiration, From http://www.optiontradingtips.com

There are other risk measures to keep in mind when trading options, known as The Greeks.  Two important Greeks to understand, besides Theta, are Delta and Gamma.  Delta is a measure of how much the option price changes in response to a change in the underlying.  Gamma represents Delta’s rate of change, that is, how much the rate of change of the option price changes with movements in the underlying.  A detailed look at Greeks is beyond the scope of this blog, but it is important to understand how these metrics affect your profit and loss potential.  Check these resources to learn more: ThinkorSwimInvestopedia, and The Options Guide.

There’s some really interesting strategies one can employ when trading options.  Many are described at The Options Guide.  You can buy (and sell! – but I won’t go into selling options on this post) both Calls and Puts at varying strike prices and at varying expiration dates lending to some pretty complex trading schemes.

Ok, so great, that’s all well and good, but how do you trade them?  Simple.  Pattern recognition.

As you may have noticed in my previous blog posts, I like to do a lot of technical analysis.  Technical analysis might be a dying art, but it helps to try to pick bottoms and tops and predict swings.  It’s pretty remarkable to me how faithfully stocks can follow trendlines and areas of support and resistance, so I try to use the general trends as guidelines for when to enter and exit.  This leads to a lot of tape-watching for the right entry or exit point.

My golden rule is fundamentals tell you what to invest in, technicals tell you when to invest.  For instance, if I notice a stock that has attractive financials (or unattractive, for the bearish traders) has bounced nicely off a trendline, there’s a good chance that will be the bottom (or top) and I’ll buy calls (or puts) accordingly. If I’m almost certain of a price move, I’ll load up on near term OTM/ATM options, which could be an insanely foolish strategy because of the high Theta, but sometimes most lucrative due to the high Gamma, and therefore highest percentage increase in stock option price (relative to other ITM or deep OTM options).

I like real-life examples, instead of made-up scenarios, so here’s one.  A few months ago, I bought 60 AAPL call options for $18.15 with a strike price of $570.  With commission, it cost me $109,024.  When I bought it, AAPL the stock was trading around $568.  When I sold the 60 options the following day, Apple made a move up to $583.  I sold the 60 options for $29.50, now worth $176,875.  A 60% increase. I’ll take those returns any day.  Ok, so I left some profits on the table because after I sold my options, AAPL continued to go up and closed the day at $589.  Those April 570 calls were now worth $37.00.  I missed out on $45,000 of profits because I sold too early!!  But who knows, maybe AAPL could have completely crashed (just look at Feb 15th… aapl rose from 500 to 526 then crashed down to 499).

But this represents my strategy when trading options.  I’d much prefer to take profits than to risk my options being worth nothing if the stock drops or decays into nothingness.

Let’s look at another example.

AAPL Daily, freestockcharts.com

AAPL Hourly, freestockcharts.com

S&P 500 Daily, freestockcharts.com

S&P 500 Daily, freestockcharts.com

S&P Hourly, freestockcharts.com

AAPL has been, for the most part, stuck in a medium-term descending trading channel since the highs in September.  The broad S&P 500 index has also been trending downwards in the medium term, despite a long-term uptrend, due to austerity crisis concerns.  The bears certainly have control and both are hitting levels of resistance.  However, I believe they will breakout if and when a deal is reached in Washington.

On Dec. 19th, both the broader markets and AAPL were approaching levels of resistance.  Betting on the fact that we would not see a deal come out of Washington by week’s end, I bought 1000 AAPL 525 Puts expiring Dec. 21st priced at $3.75.  Subtracting commissions, the value of the puts I purchased was around $375,000.

AAPL 525 Put Opened 5/19

AAPL 525 Put Opened 5/19

On the morning of Friday, Dec. 21st, AAPL stock dropped to a low of $510.24.  Because of this underlying price drop, the price of the OTM AAPL 525 Puts I bought for $3.75 were now worth over $12.00, because they became ITM.  By 11:00 am on Dec. 21st, the value of the 1000 puts I was holding was worth over $1.2 million.  That’s a pretty good gain.  However, I didn’t sell the puts and chose to hold them through expiration.  AAPL rebounded off a major increasing trendline and closed the day at $520.17.  The puts decreased in value and expired at a price of $5.45 resulting in a total cash value of $545,000.

AAPL 525 Put Expired 12/21

AAPL 525 Put Expired 12/21

Eh, should have closed out my position earlier in the day.  But my overall options strategy is to initially look at the fundamentals of the macroeconomic environment and the specific company I’m trading.  This tells me what to trade.  I then look at the technicals to tell me when I should open and close my positions.

So I hope I’ve been able to explain options somewhat more clearly.  They are a powerful financial instrument to realize huge gains, but you must understand how to properly wield them.  Unlike normal stock, there is a real danger to lose your entire investment when you trade options.  When you’re holding normal shares of a stock and the price drops substantially, you could lose a large portion of your investment, and there’s always a chance the stock price could rebound so you’ll recover your loses, but rarely will you lose your entire investment, which can be common when trading options.

It should be noted that all transactions described on this blog were performed on the Investopedia Stock Simulator and not in the real stock market.  I have no actual positions in any stocks mentioned nor will I be initiating any actual positions in the next 6 months.  Furthermore, the information on this blog should not be considered financial advice.  The main purpose of the blog is to educate its readership, myself included, about concepts and ideas that were previously unknown to me.

2013: A look ahead

December 20, 2012 Leave a comment

2012 was a roller-coaster year.  The S&P Index for the year to date has gained almost 15% (as of Dec. 19th).  Some stocks have hit all time highs, notably AAPL, AMZN, IBM, and GOOG.  While some tech IPOs, such as GRPN and ZNGA, have tanked.  And of course there’s the botched FB IPO.  Now, with the austerity crisis looming, it’s tough to say where the market is heading for 2013.  It might be safe to say much of the uncertainty is already priced into equities as there has been a substantial pullback from these yearly highs, so fiscal deal permitting, we may see a decent bounce.

S&P 500 Daily Chart courtesy of Freestockcharts.com

We saw a Fibonacci retracement from the highs at $1474 on September 14th to the low at $1443 November 16th.  We’re also seeing a short-term top from the descending trendline resulting from the triple-top highs of 9/14, 10/5, and 10/17.  If we do, in fact, see a deal come out of Washington, we’ll most likely see a breakout, however, I give an agreement between Obama and Boehner a 20% chance of occurring this week before the holidays.  The more likely scenario is no deal is made and we hit resistance and start the trek back down to find support at a very major ascending trendline as well as support at $1350.

For 2013, the upside for the markets is certainly there.  Clearly, the markets want to breakout.  We just need to see the macroeconomic environment become more favorable.

Looking ahead, I’d like to offer some predictions for some publicly-traded companies.  I see great things coming out of Alnylam (ALNY).  Their 5×15 program, in which they’re aiming for 5 products on the market by 2015, looks to be on track.  RNA interference is an extremely promising approach for treating diseases and Alnylam’s GalNac-siRNA delivery platform is unmatched.  The RNAi Therapeutics Blog has some great insights about their GalNac-siRNA conjugates on knocking gene expression down.

Next up is Achillion Pharmaceuticals.  The race for an HCV treatment is extremely crowded and also incredibly risky.  Bristol-Myers Squibb effectively dropped out of the race after the failure of BMS-986094, which happened to be a $2.5 billion purchase of Inhibitex’s INX-189.  That’s one heck of an expensive bet that landed on red and not black.  But that just exemplifies how hot the competition is for an HCV treatment.  It is estimated by the US Centers for Disease Control that HCV affects some 3.2 million people in the US.  By the end of the decade, it is estimated that the market for HCV drugs could reach $20 billion (!!).  Companies are willing to pay a hefty premium (see: Pharmasett) for a slice of that and therein lies why I’m bullish on Achillion.  The profile for ACH-1625, now Sovaprevir, looks really good, and, in my view, it’s only a matter of time for major pharma to come knocking. Of course, Gilead’s GS-7977 is the furthest along currently with multiple Phase III studies underway, however, I can’t see all that much upside to the stock as it’s up almost 100% since the beginning of 2012.  I think most of the good news is already priced in.  If I were to get into GILD, I’d wait for a healthy pullback for a reasonable entry point.

Also having a large market are obesity drugs.  According to the CDC, 35.7% of adults are considered obese.  Obesity has been linked to a number of other diseases, notably heart disease and type II Diabetes.  Because of this, weight loss drugs have been gaining a lot of attention both on the long and short side.  Vivus (VVUS) and Arena Pharmaceuticals (ARNA) currently have two of the most promising drugs on the market, Qsymia and Belviq, respectively.  Both drugs were approved this year and both companies saw their respective stock prices ride a roller coaster around the news.  I think the market is undervaluing both stocks and I think now is a great time to ride the increase in sales for either drug once they gain traction.

I’d  also like to highlight a few privately held companies from which I think you’ll hear great things in 2013.

Warp Drive Bio, based in Cambridge, MA, focuses on natural products for discovering therapeutics.  It was founded by world-renowned scientists, including Dr. Gregory Verdine, Dr. George Church and Dr. James Wells.  With backing from funding powerhouses such as Third Rock and Greylock Partners, and a key strategic partnership with Sanofi, Warp Drive Bio’s impact will be difficult to ignore in the near future.

Global Blood Therapeutics, also backed by Third Rock, leverages their team’s blood-based disease expertise to revolutionize treatments for chronic blood disease.  Their approach combines the hot areas of computational biology and ligand modeling with traditional medicinal chemistry to treat certain blood diseases for which there are currently very limited options.

Epigenetics is an emerging field and Constellation Pharmaceuticals looks to be on the forefront of the technology.  Adding another dimension to typical gene expression control, Constellation seeks to develop therapeutics that alter the function of proteins that recognize chemical modifications on DNA and chromasomal proteins.

In August of 2012, Quanterix obtained a key patent for their Small Molecule Array technology (Simoa).  As small molecule microarrays are near and dear to my heart, I am particularly interested in Quanterix’s microarray platform and their ultra-sensitive detection (sub-femtomolar – !) of biomarkers for blood-screening, diagnostics, and biothreat detection.

23andme is an extremely fascinating company out of Mountain View, CA.  23andme gives you access to your own genetic information at an absurdly reasonable price.  They also claim they will update you with information relevant to you based on your genetic makeup.  With access to such a large amount of genetic data, they are also very well-positioned to leverage their platform for personalized medicine, a topic rapidly gaining speed among the scientific community.  One of the major bottlenecks for achieving success with personalized medicine is obtaining and interpreting such large data sets of individual genotypes.  23andme looks to be in a unique position to take advantage of this push for individualized treaments.  You may hear more from this company in the next year.

Last but certainly not least, one company that you will hear more about in 2013 is Cambridge-based, Living Proof.  From the lab of prolific scientist/engineer/serial entrepreneurs Dr. Robert Langer and Dr Daniel Anderson, Living Proof is turning the cosmetics and beauty industry on its head by actually basing their products on real science (!) and not folklore/myths/wives’ tales as is typical with common cosmetic products.  After an endorsement by Jennifer Aniston herself, Living Proof will continue to grow exponentially, and I would not be surprised to see them get some real traction in 2013.

A few other notable mentions I bet you’ll hear partnerships, funding rounds, and overall good news from in 2013 (my version of the Fierce 15):

Kala Pharmaceuticals, InVivo Therapeutics, Bind Biosciences, Selecta Biosciences, Seventh Sense, T2 Biosystems, Zafgen, BlueBirdBio, Hydra Biosciences, and Epizyme.

Also, I’d like to take this time to promise you, my readers, that, in 2013, I will provide updates more often than I have.  Since beginning a new position in June, things have been busy on my end.  But consider this my new years resolution to update Pi-Shaped much more often in the coming year.  So expect great things!

That is all for now.  Wishing you the best this holiday season and looking forward to a bullish and prosperous 2013!

Big Pharma’s Big Mistake

August 23, 2012 Leave a comment

Bruce Booth, Partner at Atlas Ventures, has some very insightful commentary on big pharma’s recent habit of share buybacks.  I suppose reinvesting all that cash back into R&D wouldn’t add value to their company?  This exemplifies the state of the industry.  No wonder big pharma isn’t hiring.  In fact, they’re doing just the opposite, they’re cutting jobs.  

On the other hand, with the patent cliff upon many companies, the recent behavior of big pharma does make financial sense.  Why bother reinvesting that cash into their own company just to labor through the undertaking of high-risk research and development?  It makes a lot more sense to let the small companies fight it out in the trenches and buy them when they stumble on something promising.  Which is exactly why M&A is at a 7-year high.  

Undoubtedly, an unfavorable IPO environment keeps valuations low as evidenced by the withdrawal of Argos Therapeutics IPO.  Because of this, big pharma can protect their interests with a high number of acquisitions.

At the macro level, this means a tough job market for scientists.  Not sure what it will take for conditions to improve, but here’s to hoping things do.  Soon.

 

Quick glance at May’s stock picks:

JCP

5/16 closing price : $26.75

8/22 close: $24.50 (but not after reaching a low of $19.09.  Presumably, you would have covered your position)

GRPN

5/16 close: $13.05

8/22 close: $4.51 (like I said, massively bearish long-term)

USHS

5/16 close: $8.92

8/22 close: $12.44 

HD

5/16 close: $48.77

8/22 close: $56.55

 

Not bad.

Market Currents: May 16th, 2012

May 16, 2012 Leave a comment

Uncertainty in Europe has been weighing heavy on markets here in the U.S.  I think once things across the pond get sorted out, we’ll have a much better picture on where we’re heading.

Taking a glance at the S&P 500, it looks like we’re in a downward-sloping trading channel:

The upside to this is that we may be at a short-term bottom.  My thoughts are that we only go up from here.  I envisage a run-up to 1360 where we’ll be met with some resistance.

The AAPL daily chart looks similar in that we’ve been sloping downwards since the April 10th highs.

It’s difficult to say where we’re heading, and it may be safe to sit on the sidelines until a clearer picture forms on what direction it’ll take.  We’ve filled the gaps from March 13th and 14th at 552 and 568, respectively.  Since the gap-up on Jan 25th was a break-away gap, I’m inclined to say this will not fill, so there is no worry about that here.  My gut instinct is to say that we’re heading up from here, however I’m concern that this support at 552 won’t hold.  If 550 is breached, we’re heading to 520 easily.  Buy your Puts if you see prices below 550.  I would like to say 552 will hold and head up to the upward boundaries of the channel around 575/580.  I believe this may be contingent on Macro data and how the Eurozone looks.

My portfolio at a glance:

Holding tightly onto my trading thesis, selecting high growth biotechs, I’ve been able to catch some great run-ups from VRTX and MDVN that are helping along the laggers, such as ACHN, DNDN, and GALE.  I am particularly interested about ACHN.  There’s some great data coming out from ACH-1625.  I’m fairly bullish on Achillion despite their poor stock performance.

Some quick ideas that in no way, shape, or form represent something I’m immediately going after:

Short JCP.  They seem like a mess over there at JC Penney.  Possible short of the year?

Long GRPN (yeah, crazy, but with Facebook IPOing, it’s an interestingly low-priced play.  Even though I’m massively bearish on GRPN long-term)

Long USHS, HD, L — playing the housing market recovery with these is an interesting play.  Think about it, most likely people aren’t going to be buying or selling new houses just yet.  They are probably going to be remodeling or renovating to get ready to buy/sell.  Where do you think they’re going to get the hardware and know-how to do this.  That’s right, home improvement shops like Home Depot and Loews.  Ok, so why US Homesystems?  This is the company that provides the supplies for Home Depot.  Like I said, an interesting, indirect play on the housing market improvement.  Oh, quick plug here, this idea is Leo Leydon over at Financial Focus on Money Matters Boston AM 1120.  You can listen live on the weekdays from 8am-9am EST.

Okay, that’s it for now.  Happy trading!

Categories: Stock Market Analysis

Welcome to Pi-Shaped!

May 12, 2012 Leave a comment

This being the first post, some introductory words would go well here.  So, welcome to Pi-shaped!

Because I think of readers of a blog as investors (investing time and brain power), and the writer as the entrepreneur (striving for the next good idea and post),  I figure I should present this first post as a pitch.  After all, why should you invest in my blog when there are so many great blogs out there?  There’s a concept floating around about the shapes people adopt.  I consider myself a “T-shaped” individual.  Great depth of knowledge in one specialized area.  Broad base of general knowledge in many areas.  However, I’m on a quest to develop into a “Pi-shaped” individual.  My goal is to present to you, the reader, a not-so-random assortment of posts and musing from the experiences and knowledge intended to allow us both to become just a little bit more Pi-shaped.  Or T-shaped.  Or any-shaped.  In short, let us shape each other into better people.

Since this is a pitch, I should present the backgrounds of the management team, right?

I received my BA in chemistry from a small, liberal arts college where I was encouraged to become knowledgeable in many non science-related subjects.  One of the most important traits I gained was the ability to stay grounded no matter what outside forces were acting on my soul.  Midway through my sophomore year, I was faced with my first, true pivot; organic chemistry, a requirement for my initial neuroscience major track, was too fun to give up and I had to keep doing it.   Hard to believe, I know.

The natural path of being a young 20-something in the sciences led me to graduate school, where I developed my vertical component to my T.  I received my M.S. in organic chemistry, but one of the major themes I took away from grad school is that it really is best to be true to oneself and no one else.  Phew, for a minute there, I lost myself.

With an analytical mind, I’ve continuously sought out the “why” and “how” of events that affect my life directly.  During the overactive hurricane season of 2005, I learned about meteorology, particularly hurricane tracking and forecast.  It is estimated that Hurricane Katrina  cost over $81 billion in property damage.  Lives were forever changed because of large, spinning masses of tropical air.  I had to know why.  I had to know how.  More recently, during 2011 hurricane season, I accurately predicted a Long Island-based landfall of Hurricane Irene a week before while the storm was just north of Puerto Rico.

The current economic downturn has encouraged me to study our financial system.  Our economy has endured the longest recession since the great depression.  I had to know why.  I had to know how.

Which brings me to my goal: to impart any sort of knowledge I’ve gained in the process of asking why and how to you, the reader.  And, hopefully, by doing so, we’ll both learn a thing or two.

So, readers, what shape are you?

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