Better to be lucky than good, perhaps, but it's been one heckuva week for traders and investors who subscribe to my newsletter and even those who gambled on my Smackdown with my old friend Scott Moritz from TheStreet.com.
Three short weeks ago, I wrote a newsletter called "Rock this short", and in it I laid out the logic behind why I thought Live Nation was in dire straits for both the short-term and the long-term. I mean, at the risk of dropping names faster than Live Nation's stock, I had Bob Weir from the Grateful Dead, the money manager for Santana, an attorney for Britney Spears, and about five other very connected people confirm that Live Nation was about to get crushed because they'd overpaid for their acts and were having to cut prices and fees like a scalper at halftime of a blowout.
As I wrote at the time:
Everybody knows this is nowhere, and everybody I know in the music business is telling me to short Live Nation. And like a good rock fan should, I'm listening... click here to read on.
As for the Smackdown, in which I picked five stocks reporting earnings this week that I thought looked like good trades (both long ideas and short ideas) -- well, I can tell you after having traded thousands of earnings reports back over the years when I used to trade for a living that going 5 for 5 is about as lucky as you can get in the near term. I'll take it and pretend to take all the credit in the world for it, since, frankly, that's all I get for analyzing trades like this these days. The fact is that I did allocate 80% of the pretend trading money in Smackdown to long positions in INTC and ADTN because I had a lot of conviction that they were going to report very strong quarters and give great guidance AND that that Wall Street was pricing in exactly the opposite -- that is Wall Street expected fundamental weakness in the reports and I expected strength.
That's a recipe for a great near-term trade because that way you've got the expectations, the pschology and the fundamentals all set up for you. You can see the whole Smackdown portfolio by clicking here.
More importantly than those short term trades, though, I've had my newsletter subscribers in Adtran since it was in the low 20s and we're still holding it strong, as the company is in a very sweet spot for the ongoing and accelerating build out of the wireless high speed networks around the world. The company has been executing, the fundamentals improving, the analysts are chasing the estimates higher and that's probably going to be going on for several quarters. You'll need to subscribe to know how we'll be handling the stock from here, but rock on if you caught the short-term pop off my Smackdown recommendation too.
If you'd like access to all my favorite stock picks, investment allocation concepts, and short-term trading opportunities, you can sign up at http://marketwatch.com/cody.
Rock on, indeed, eh!