A lesson the Bull learned

Even the Bull learns a lesson every now and then. The great theoriests of investing have always proclaimed that it is best to go against public setiment and rather go by the fundamentals and while there is no doubt that this strategy is the only intelligent and profitable one in the long term, it is of the utmost importance to realize that there is a large sum of money to be made by following public sentiment in the short term. What does the Bull mean?

JRCC - James River Coal Company is the number one stock on the major indexes this year. Coal is a hot commodity and almost all coal stocks are up large(60%+) but James River coal is up hundereds of percent. Why? Well the company seemed destined for bankruptcuy this summer and no one was doing business with them. Since no one was doing business with them much of their coal was not under contract. Now that coal is sky rocketing and coal is in need, JRCC is able to sell their coal for new contracts(since they had the most not under contract of any coal company) and there stock has sky rocketing every single time they point this fact out. Is JRCC to high? Of course it is, this company is hardly profitable and has huge debt. At best they are a 20 dollar stock but more likely about a 16 dollar stock. The Bull shorted the stock a couple weeks ago on earnings day and JRCC reported a huge loss and the Bull made a quick 8% but then the stock came back and actually finished up on the day and it has not looked back. Finally the Bull had enough and bought in at 31 dollars. Today the stock is trading above 36 dollars.

Investors like to invest in stocks they see having the potential to sky rocket up in the short term and JRCC seems to fit the bill. Who cares about the massive debt, continous loss of money on a yearly basis, that the stock went from 50 dollarsto 3.50. This is just like the tech boom, stocks being sold at values that make no sense but there were great amounts of money to be made in the tech boom and there is in JRCC and other stocks that people seem to see as invicible.


Where is oil going to stop?

Gas is approaching four dollars in most parts of the United States and the always bullish oil analysts at Goldman are calling for 141 oil by the end of the year. Thestreet.com has their first article as "Stocks for 200 dollar oil" and on CNBC people are claiming 160-180 oil is in the near future. These people are crazy, oil is up 100% in the last 12 months. This is not going to crash and go back down to 60 dollars a barrel but oil will see 100 before it sees 160. Oil is overpriced and more importantly there is now way that the United States government will allow OPEC to raise oil prices that high by cutting supply. Oil someday in our lives will be at 200then 300 dollars but not this year, not the next, not in 5 years.


To the commentor who said that "Fast money is bashing yahoo, options are not looking good for it".

- Would you take Ichan and Paulson or Macke and some other cronie on that show? Just yesterday CNBC had an article stating "option activity points to yahoo buyout". What a joke.


The bull's favorite golf store Golf Smith is down 26% today. This is a highly volatile stock. Could be a nice 5% kickback here. I would put a 2% sell on it as well.

Bull played his first round yesterday. Shot a 77 with hitting 12 greens but the wedges were not dialed in, the putts were not falling, only hit 6 fairways. Was playing a team match play best ball. The opposing team only fired an 88 and a 90 so my 77 would seem good considering my partner said "I usually shoot low to mid 80's" and then put up a 109!!! I could shoot a 109 with a PW the entire time.


The Bull