I "glossed over" the year end plays used by many of our more affluent traders in a recent post, but I thought some of you may want to know more about them. What we do is simply screen for stocks that are down in the lowest ranges for the year, many under $5.00 this year....and check for their fundementals, find the candidates that show a decent P/E and/or Book Value. We allocate a certain amound of capital to their purchase. I have only taken positions in around 30 stocks so far this year, and keep track of my entry points and net costs as I add to the positions. The intention is put up around $250,000 or so in long positions and try to make around $15,000 - $25,000 or so in approximately 30 days. This has worked pretty consistently over the years, and we hope to see some profit this year. My brother, although participating at a higher level, is concerned about the fact that the market has shown a sharp rebound since September, and therefore there may not be as much "tax selling". This takes several hours of homework, but has paid off consistently...and I have my friends who were Specialists to thank for this simple strategy. They have been doing this for decades, with a great deal of success. This of course has nothing to do with actual trading, but heck, making money is what it's all about, right? Happy Holidays to everyone!!!
It depends on who is doing the selling. There is a 3 day settlement, and some can opt for a same day settlement. Firms vs. customers have different methods at their disposal. We usually start the buying early in December, and keep it up until the final day....and then hold off for a while. It's kinda funny....like everything else, the "anticipation" factor is at work...and many start earlier and earlier than in the past. We have a lot of "outside" circumstances this year and coming into the New Year...so we shall see how well it works.
PVN,PVN,PVN!!!! besides those, i have a list of a few interesting ones. Q,AES,CPN,AMCC,LU,AWE,F,FCEL,FON,MIR,SLR,RAD,U,UAL,EMC,KM,JDSU,AVCI,AVNX,ENE,OCCf (long occf now). Please add to my list. Don, thanx for adding this to the forum, I brought this idea up to my webgroup from elitetrader on monday and we're looking for more ideas.
Glad to help, and glad to see others sharing some good info. You might note our concerns over the low interest rates going into 2002, which you would think would add "fuel" to the possible new year buying....but since the rates are so low, the arb players may be staying out of the futures thus causing a lack of enthusiasm for buying....(just another thought)..
Would another strategy be to buy stocks that have done well that fund managers may want to "dress up" at the end of the year? A Sunday edition of the Wall Street Journal hasd a list of 10 stocks that have done well that fund managers like: AZO ACS THC MSFT FOX ET GENZ LOW SPLS APPB Others would be some like BRCD QLGC EMLX although this may have much less risk reward than buying the beaten down stocks.
This strategy revolves around the quarterly "window dressing" that is done by fund managers. The concern about being involved at year end is that there may be a strong sell bias beginning in January (to lock in profits)for the new year. Keep these in mind every quarter near the end of the "up stock" bias ...and think about jumping on board just before month end for a day or two. This "back tests" pretty well...
I have no idea about fundamentals but a couple of small ones I've been watching and playing are PPRO and BVSN. BVSN came out of the Naz 100 like ARBA. It has already come up quite a bit since Friday after a lot of selling though.