Getting short

Hi all,

Do any of my readers (such as they are) have interest in articles on companies that I think are good shorts? I think it's an important strategy for any investor to successfully hedge, and I think there are some prime targets in the biotech space (as always) that might be nice for me to add to my model portfolio. Let me know in the comments...

Best!

JVS

This is not a trade analysis or recommendation.

ECYT November puts position update

The model portfolio ECYT November puts expired worthless, so I moved them over to the closed position tab, for a cool 100% gain in a month and a half. Typically, I wouldn't "bet" such an enormous position size (i.e. 10 times a normal option size), because if it goes south you're looking at easily 100% losses in a short time frame, but ECYT was trading just about as low as I thought it possibly could.

I am considering reentering ECYT puts if the price per share declines a little more...as is the premium for selling out of the money puts is a bit too low for the risk for my taste.

Good Investing!

JVS

This is a trade analysis, not a trade recommendation.

Exiting model portfolio IBB puts...

...I'll take the average of the bid/ask spread for the November 22 275 puts, which is (according to TDA) trading at 22.30. They were entered in the model portfolio at 10.50, which is a gain of 112% in 16 days, which comes out to an annualized gain of ... 2555%!!! If only every trade I did in real life was that good! :)

Happy Investing,

JVS

This is not a trade recommendation or analysis, but a modification to this website's tracking portfolio.

Quick clarification on position sizing

For posterity: When I talk about a "100% position", I will typically be referring to stocks, whereas a 10% position (or thereabouts) will be options; the reasoning is that by nature options are typically much more risky. For instance, if a typical 100% position for me would be purchasing $1000 worth of a stock, then purchasing a 10% position of options would be $100 of options. However, if it's a "100% position" for options, I would be purchasing $1000. So, my 100% ECYT put position is very risky, and could go very poorly; I feel confident in its prospects though, which is why I made the very risky bet of a 100% options position on it.

JVS

This is not a trade analysis, or recommendation, but an explanation of this blog's model portfolio.

Ariad's AP26113 receives breakthrough designation...

Disclosure: I'm long ARIA as a substantial portion of my portfolio.

...which, in my opinion, means little. What was more important was the safety and efficacy demonstrated by AP26113 in the recently reported Phase II trial. If true, 113 should be able to make it swiftly through the approval process if the Phase II data continue to be positive, or perhaps after a limited phase III. People continue to be negative on 113 doing well in competition with the other major ALK inhibitors already approved (like crizotinib); the beauty of 113 is that it seems to have efficacy in various resistant mutants as well, which are a sizeable portion of non-small cell lung carcinomas. However, this is getting way ahead of where we are now; we still need to wait for more data to see if 113 is really effective, and safe. I'm still bullish on ARIA, and considering adding more to both the model portfolio and my real life portfolio.

Happy investing!

JVS


This is not a trade analysis or recommendation, but a comment on recent relevant news.

Endocyte gets 5 seconds of air time

I was driving home from work the other day (perhaps Wednesday?), and happened to flip on CNBC to catch the call-in segment of Jim Cramer's show. A viewer called in, and said something to the effect of "I like Endocyte, they have a lot of cash on hand and a seemingly strong pipeline, what do you think?" Cramer's answer was essentially "I don't like the company, I like some speculations in my portfolio, but this isn't one of them." Again, I'm paraphrasing here as it was a few days ago and I don't remember the exact words, but do people really base investment decisions on a 3-second answer from a cable television program? I guess they do, else there wouldn't be commercials on buying gold from Fox News, or the ones popular where I am about buying an oil well if you're an accredited investor. I've certainly made dumb investment decisions, particularly from not researching enough, or acting rashly, or any hundred number of reasons, particularly as a relatively young/new investor, but man...might as well use a Ouija board as create an investment thesis on a 10-second sound bite.

What a volatile, interesting week it's been!

Well, it's been a crazy ride this week, what with the pure, good-ole-fashioned breakout by ARIA, the plunge + reversal of GALT (and the wild penny stock promo/bad science controversies brought on by some social media), and finally the enlightening conference call by ECYT. I've been keeping up with these events (just barely), but haven't had time to sit down and write my reaction; I wish I would have, as my predictions for GALT were essentially correct that I didn't blog out for the record (about the penny stock/bad science, but not the phase I trial results). I have a huge project at work right now, but I'll have some time this weekend to get some thoughts down. Fun week though!

JVS