07/06/2010
December 3, 2017
06/23/2010
December 3, 2017

07/02/2010

Harris,

Any opinion on Dune Energy (DNE)?

Any comments in general on stocks that move from Amex to OTC?

Never heard of it. Sorry–no opinion on it.

My experience has been that when a stock moves from the Amex to the OTC, it declines in price as some funds cannot own OTC names.


Harris,

I am interested in knowing why you sold MF so quickly?

Given its significant pullback is it on your radar to rebuy?

I sold MF because I have trading rules. I add to investments as they get cheaper. When I make a trade–I have different rules. If I have a gain in a trade, and it goes against me, I almost always get out at break evenish. You need to have discipline in this business. MF has dropped 30% since I sold it. Clearly the rules are there for a reason.

I entered the trade because I felt there was very little near term (1-3 week) downside risk as Corzine would make the rounds and talk up his new career. I felt it was a low risk chance to make some big upside if he told the story well. The company was cheap then–it still is. My fear was that they would suffer if the market took a dip or if interest rates declined. I was really concerned that they would have to do an equity raise. As soon as the shares got tagged, I figured there was an imminent raise (I was right). Besides, I would rather have the capital to invest in ‘money printing’ types of ideas right now.

MF seems cheap. Corzine will eventually fix it. It is probably pretty interesting–even with the added dilution from the raise. I am just not interested here. It was a trade and I’m out for now.