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Friday, April 30, 2010

A Good Month?

I’m pissed.

It is going to take me a long, Long, LONG time to get over this one...















I hate this chart.

1)It makes no sense.
2)Somebody made a lot of Freaking Money.
3)It wasn’t me.

It probably has something to do with day traders or some sort of program that kicked off or somebody sneezed and hit their nose on the “OMG it’s Armageddon - sell everything button”...

Did I mention that this makes no sense?

It’s crazy.

First, let me just say that POZN was on my watch list and was due to report (and did) on the 29th. It was also expecting a FDA report on one of it’s products on the 30th of April. Now I had done my research and found no readily published reason why the FDA would not approve this product for use. In fact many people had mentioned pretty much the same thing. The only thing I was not 100% sure about was the quarterly report.
As it turned out, they beat estimates, but missed on revenue. But the stock market seemed to still like the company because it made more than they expected, and were due to hear, by all anticipated accounts, a favorable approval report from the FDA the following day.
After previously hitting high price points earlier this month, the stock had pulled back about 10 – 15% as I had expected it would. So at the beginning of the week, I bought POZN. And for the rest of the week everything looked good. The stock was slowly going back up (about 10%) in anticipation of the quarterly report and FDA findings.

Secondly, let me just say that up until this point, it had been a pretty good month for my investments.

I gained about 40% off of GENT
I lost about 15% off of EMAN
I gained a few more points (5%) with Apple’s quarterly report
And I was up over another 10% with POZN.

So, then Friday April 30th started...

At first all was going well up until about 12:37 pm. Then all hell broke loose.

Now, you may have noticed that I lost 15% on EMAN. This was because I had a “stop loss” set to sell if the price fell beyond a certain point.

Now, stop loss orders are great. They have saved my butt and my money many times. But not this time...

As Friday came , started , progressed and went on past 11:00 AM with no news I was considering that maybe “no news is good news” was not such a good motto after all. You see, most of POZN’s announcements tend to happen either before market opens (as their quarterly report) or in the mornings. Of course we are dealing with the FDA and the government is notorious for hurry up and wait, and wait and wait..

Still, I was looking at a good month so far and started second guessing. And third guessing...

I know hype can work both ways (up and down). I had a big client meeting to go to and wanted to cash in on the (as I saw it a favorable FDA report) but did not want to lose what I had gained during the other 29 days of the month. So I entered a “stop loss” , not at 15% below my buy price but a couple tics above it.

Why? Because if paranoid hype hit the stock, and drove the price down, I still wanted to be able to cash in on the anticipated favorable FDA report next week. You see, if one sells a stock for a loss, you can not reinvest in it for about 30 days or so. But if you sell and make a profit, you can buy back in anytime you wish.
So shortly after 12 noon I entered my “safe” stop loss.

Hopped into my car and went to the big client meeting.

Then somebody sneezed.

Who could possibly know that 23 minutes later all hell would break loose and not only would I lose out on my weekly 10% gain, but the Freaking sell off would be so quick that my by the time my “sell” went into effect, it was actually at a loss.

Not a gain.

In a matter of minutes (or less) this stock went from over $12 a share to $5.50 a share. That is almost a 60% loss!

Then within about 20 minutes bounce back up from somewhere around $8 to over $11.00. Nearly a 40% gain!

And now, due to the anticipated FDA report (after closing), is back up over 20% from it’s Friday close in after hours trading.

For me, that is a 30% boot. Not only did I lose my 10 – 12% gain, but because of my fail stop loss (I can not reinvest) and am out the 20% gain.

It’s been a good month, really. Over all I am up about 15 – 20% (TBD) with my final review later this weekend.

It’s been a good month; I just have to keep telling myself that…

In less than 15 minutes, I lost out on nearly 50% gain for the month, instead of (15 – 20%).

It’s, been a good month; really?

It’s been a good month; I just have to keep telling myself that.

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