INVEST IN GREAT MINDS

Many investors either look at fundamentals or technicals, but what is also very important is the management of a company. And if the company is a bio tech company, than the scientific advisory board is also very crucial. Case in point, CYTR and CBMX. Both companies are full of very smart individuals who have done nothing but good in their professional careers. Both are companies with great business models, and combined with the great scientific advisory boards they have, both will prove to be great investments in the long term.

HERE COMES 14K AGAIN

Looks like the Dow is heading towards 14,000 as previously predicted and in such a run-away bull market, it is wise to buy hand over fist right now. Cramer also wisely pointed out that stocks in this type of market go from 80-100 and do not look back all the way to 120. Winners keep winning in this market. I think this is the last leg of a super bull market, and afterwards we can see a bubble similar to the tech bubble. Buy the following:

SUNH
CYTR
NVEC

A 20 dollar bill on sale for 15 bucks, Guaranteed!!!

That's right, we have found a way to buy $20's for $15. Our next triple digit gainer is Sun Healthcare, Nasdaq symbol: SUNH.

This is a name that had its initial debut on our blog in May when it was ~ $14 per share, it has risen close to 10% since then, but the stock's run is far from over.

This nursing home operator is poised to go to $24 by the end of the year and it seems that the heavy institutional buying recently will move it to that price target rather quickly. Amid recent news regarding the private equity buyout of Manor Care-HCR, the sector valuations are going through a readjustment. Approximately one year ago, another nursing home operator was also taken out by private equity and that company was Beverly Enterprises-BEV. Both buyouts of HCR and BEV have established a price for longterm care facilities. Based on these valuations paid by private equity, the price of SUNH based on the number of its licensed beds and revenue should fairy value SUNH in the 20 dollar range per share. The upper limit of the stock being $32 per share and lower target of $24 per share.

In addition, technically, SUNH is coming out of a 3 year cup with handle base, which could add fuel to fire. But regardless of the technicals, SUNH is worth $24 per share and it should reach that target by years end. Also, since SUNH is a nursing home that is not levered to the general economy, it makes it a perfect play for the uncertain times we are in right now. With the subprime/housing mess on one side and global political risk rampant, owning SUNH is a good way to stay long the market while having the potential for huge upside due to the favorable trends of aging baby boomer's.

I don't feel that SUNH is a good buyout candidate by private equity, as stated in Wall Street Journal this week, due to the fact that it only owns 40% of it operational real estate. However, there is a good chance that it might be taken private because it is one of the last remaining large nursing home operators. The other nursing home operator that is a good buyout candidate is Kindred Healthcare, NYSE symbol: KND. Kinderd Healthcare is the largest remaining public nursing home operator and there is more. Its number one institutional holder, Franklin Mutual Advisers, which owns about 19% of the outstanding shares, was one of the key players that took Beverly Enterprises private. So, it seems that they have similar plans for KND, as they have been increasing their position in KND. Both KND and SUNH are the last two major longterm care facilities that are public, so if you are private equity looking for favorable long term trends in the aging of baby boomer's, there are only two players left.

In conclusion, if you missed our last triple digit gainer, CLRK, it's not too late to make some $$, buy SUNH.

STOCKS STOCKS AND MORE STOCKS

GRMN keeps hitting new 52 wk highs, and this one looks like it can lead us through a bad market as it has been performing well while the markets have been getting beat up. Most importantly, this stock was graded as the #1 stock on the MGR Coefficient when it was $58, now $73.75 and still going strong. I would not be surprised to see this stock trading at $85 by the end of this year.

Also on a general note, it looks like playing stocks in the Nasdaq (SUNH, UCTT, CYTR, NVEC) is the safest bet as this is the most oversold index, especially on a long term basis.

Here is a description of these stocks:

NVEC - This company has patents and technology that can propel it and destroy the competition in the coming years. Trading at about $32, this stock is a good buy.

CYTR - RNA is the "new thing" in science, and a huge breakthrough. When I was in college, I was taught RNA was not too important, and now the opposite is true. CYTR's board of scientists/doctors is led by Craig Cameron Mello. He is one of the laureates of the 2006 Nobel Prize for Physiology/Medicine (the other laureate was Andrew Z. Fire), for the discovery of RNA interference. This information was obtained from http://en.wikipedia.org/wiki/Craig_C._Mello where more can be found about Dr. Mello.

SUNH & UCTT - descriptions can be found in recent blogs

TWO THUMPS UP

In these crazy markets, there are only two stocks that I can really give "two thumbs up": SUNH and UCTT.

SUNH should pop soon as the institutions will be moving into low-beta and non-cyclical industries to be safe from a weakening economy and stock market.

UCTT should pop soon because Intel got upgraded last week, AMD upgraded this week, and the SMH (semi-conductor holders) hit a 52 wk high this week. This is all really good news for UCTT and I think it is coiling like a spring right now and getting ready to pop.

CLRK GETS BOUGHT OUT!!!

As perfectly predicted by Darwinian, not only did CLRK move from $17 in March 07 to $34. That is a 100% move in 3 months!!! CLRK was initially moving on institutional buying in the last several weeks, and now has been bought out by Phillips for $34 a share.

THE RAGING BULL....OR IS IT???

It looks like we are now possibly back into the realm of the bull market. Like Darwinian was saying, there were still too many bears last week where the "end" of the bull market had supposedly come. However, what is evident is that usually at any real stock market top there should be really no bears and everyone should be thinking we are still going higher. Now with this recent turn around, even those bears will have to turn into bulls because they have already missed a great run and would not want to miss anymore of it. Once this happens I believe we can go to 14,400 on the Dow, and the next decline will probably be the one that breaks the bull's back all the way down to 12,800.

IS THE BEAR DONE HYBERNATING?

The downturn looks like it is here as had been predicted.

Just to be safe, I would sell the majority of stocks because I think diversification in a bear market is wrong. In any market, 3 of 4 stocks follow the direction of the market. So it only makes sense to be diversified in a bull market to take advantage of this widespread move up, but in a bear market, it just exposes you to more stocks for more declines.

If the bear is here and scaring the general markets, you can bet that most stocks are also going to be shaken up and the more stocks you are invested in, the more hits you are going to take.

MARKET UPDATE

As the markets take a big hit today, I believe these are the signs of the much anticipated downturn that we have been discussing on our blog. It is obvious that we are in the economic stage known as the "peak", and the economic downturn is ahead of us.

What is important to note is that stocks move in anticipation of these cycles, so now is the time to sell, not when the recession is here. In fact, many studies show that bear markets have been well under way by the time a "recession" is announced. Therefore, I suggest investing in "cheap" stocks and staying away from any stocks with a high multiple and one that relies on a good economy to make money.

WHAT ARE YOU BUYING?

As of right now, the only stocks that I am willing to own a major position in are SUNH and UCTT.

UCTT has found support, and is making a great comeback. It is not too late to buy, and I myself bought shares yesterday.

SUNH is the greatest play in health care right now, which is in an industry I do not think you should be out of. Darwinian has much experience in the health care industry, and his numbers have proven to be very efficient in the past and present. It would not be a stretch to say SUNH is really worth at least $20.

Believe in Darwinian! Believe in SUNH!

STOCK UPDATE

At this point, we keep moving higher and higher, so I am more and more cautious. In my opinion, 2 stocks look really good right now:

SUNH - buy all pullbacks, especially towards 14.
UCTT - found support and formed a recent double bottom and it is not too late to jump in.

ALMOST FOURTEEN

This is a reminder to investors to start selling their stocks into this rally as I believe we are almost at the top of this current bull market run. I think the highest we will go is 14,000 on the Dow Jones Industrial Average, and after that we can expect to see a correction of 1,000 points.

Also, investors who want to stay in the market are encouraged to invest in defensive positions and big cap companies.

ON THE CHOPPING BLOCK

Watch out for the following stocks as they are showing signs of topping and a near-term downtrend.

AOB
BRK-B
CBMX
COGO
CYNO
MA
PAY
POT

STOCK ALERT

SUNH (a pick by Darwinian who has been invested in it for years) has recently broke a very important level of $14 on huge volume. It is also breaking out of a semi-cup with handle. This is a good short term investment due to its technical breakout, and its a great investment because as the enormous baby-boomer generation ages, we can expect to see a rise in needs of medical care, including nursing homes as provided by SUNH.

THE DOW NOW

The Dow right now is down 115 points but I do not see this as a bad sign. I think this serves as a small healthy correction, allowing us to continue the long term trend upwards more safely and confidently. Also, we saw a lot of buyers come in and pick up stocks when the Dow was at its low today, showing that people are just waiting for bargains and believe they are seeing bottoms in stocks they like.

STOCK ALERT - VOLC

VOLC looks good as an investment, and as a short term trade since it is breaking out of a very nice cup with handle formation. They are in the medical equipment field, and their future looks promising. Here is the 6 month chart from Yahoo Finance.

14K Gold

It looks like the Dow will reach 14K, indicating signals of an almost definite pullback in the near future. I believe we will see 14K before we see 12K or 13K, but I think we may pull back all the way down to the 12k level if this bubble bursts and people panic and scramble to the exits. The economic news, strength of the dollar, and housing numbers do not indicate that the stock market should rally much higher, yet it continually does. It is like the market has a brain of its own now and does not care about the numbers. Bernake's obsession with inflation and possible rate hikes does not help the investor either. Either way, investors can make money. Stay long on stocks until you see signs of a real correction, and get ready to invest in ETFs that play the short side such as QID and SDS so that you do not have to sit on the sidelines idle during a bearish trend.


As for the CNBC contest, I managed a portfolio based on the MGR Coefficient. I did as well as holding a position in the top 3%, and it looks like I will end the contest in the top 6%. I believe this shows more evidence of the strength of the rating system, since it was able to defeat 94% of the portfolios in the contest. The total number of contestants actually reached a half a million portfolios, which goes to show how many people are involved in the stock market these days. With so much competition out there, investors need to stay focused and keep their eyes on the prize.

MGR COEFFICIENT UPDATE

AKZOY - 2.52 SOMEWHAT BULLISH

NEWEST MGR COEFFICIENT RATINGS

Here are some of the newest ratings of the MGR Coefficient:

KSWS - 2.17 SOMEWHAT BULLISH
NXST - 3.04 NEUTRAL

Also, keep an eye on BVN - it is a very solid company and seems like it may hold above the long term resistance of roughly 32.50.

MISSION ACCOMPLISHED

Today the Dow broke through 13,000 for the first time ever, reaching that psychological level this week that I said we would. I am also going to make a bold statement here and say that I do not feel that we will ever see a real bear market again (unless something catastrophic and unpredictable happens). With the trillions of dollars invested in the stock market, I do not think the big money will let the markets go under since that would cost a plethora of jobs, money, businesses, and most importantly the economy.

Furthermore, investing has become very popular. College students are even investing in stocks now, something that was only done by the most sophisticated of individuals only a decade or so ago. Also, television shows and broadcasts concentrating on stocks have become very popular. Shows like On the Money and Mad Money even get the couch potato interested in putting their money in the markets.

Of course, a correction and consolidation is possible and probably healthy in most cases, but I do not think we see the markets ever go under 12,000 again, and after it sits above 13,000 for a while, I do not think it will go under that number.

MISSED THE STREET'S ESTIMATES....WHO CARES???

UCTT missed the street's estimates even though it doubled its profits and broke records. The stock fell over 18% today. I believe this is a great value play and picked up some shares for myself. A growth of 100% is outstanding, even if it does not meet the expectations of the street. Furthermore, the company is solid, and can prove to be a great trade and a long-term investment.

AFTERHOURS WATCH

FTEK is up 7% afterhours because of Cramer's recommendation as the ultimate speculative "green" play. I feel that it has more room to run. For those who want to jump on board, you should wait a few days since Cramer's recommendation of the stock has caused a high run up in the price. This run up will probably correct throughout the week, giving investors a chance to buy in on any pullbacks.

THE NEW MAGIC NUMBER - 13,000!!!

The Dow Jones held above 12,000 this year just as was predicted on this blog. In fact, I believe it is safe to say the Dow Jones will not go under 12,000 for a very long time unless something very dramatic happens (war, terrorist attack, etc.). The Dow closed today at 12961.98 and I believe we will see 13,000 early next week. I am so confident because since the markets are driven by emotions such as fear and greed, numbers that are psychologically easy on the eyes (such as those that end in 0's, and the reason why we round our numbers to 0's) actually become psychological and literal support levels.

TECHNICAL BREAKOUT ALERT

INVESTORS SHOULD WATCH STOCK SYMBOL Q AS IT IS SHOWING SIGNS OF A BREAKOUT.














This stock has always had trouble at $9.00 and today it broke through it on great volume. Although the company's fundamentals are not the greatest (Q has more current debt than current assets and weak free cash flow per share), I think it serves as a great technical play at this point.

GET READY FOR THE RIDE OF YOUR LIFE!!!

After a huge tumble in February, the markets have recovered all their losses. In fact, the Dow Jones set a record high today. I believe there is probably a short term rally ahead of us (in the next few weeks) and investors should put their cash to work on any pullbacks. The next stop for the Dow Jones is probably going to be 13,000 which will then be the new psychological support level.

If any investors are too busy to invest themselves and would like a stockbroker to help manage their investments, please feel free to contact me at artman3211@gmail.com.

Big Wig at Pimco is Still Renting!

Here is an interesting article by Mark Kiesel who is a top dog at the bond giant Pimco. The article has great charts and is easy to read.

Click below for link to article:
Pimco Still Renting

WHAT ARE YOU BUYING AND SELLING?

Just in case the readers were wondering, this is what I am watching lately:

BULLISH: MICC, POT, FTEK, CPRX

CAUTION: AXR, BTJ

AXR - Although this is my 2nd highest ranked stock, it has been finding no support and I will not argue with the market because even though the company is great, the market determines winners and losers.

BTJ - This stock has moved up 50% in a little over a month and may be encountering resistance. However, this is good for the long term as any such run needs to see a correction first before it can move on in a healthy fashion.

THE FEARSOME FIVE

Here is a list of the top 5 rated stocks on the MGR Coefficient as of 04/08/07:


1. GRMN - 1.35

2. AXR - 1.68

3. GIGM - 1.92

4. VDSI - 2.07

5. AOB - 2.18

NO NEED TO CHANGE THAT CHANNEL

One type of stock that seems to be predictable are stocks that move in a certain "channel". These are stocks that always find support and resistance at a small deviation creating a visible and predictable channel. Some examples of such are:

SUNH - support at $10 and $12, resistance at $13
LCRD - support at $10 and $11, resistance at $13
EZPW - support at $14.50, resistance at $15.50

As for the MGR Coefficient scores (in which a score of 1.00 is the perfect score and 5.00 is the worst score) of these stocks:

SUNH - 3.20
LCRD - 3.24
EZPW - 2.28

As for these three stocks, EZPW is the only one which is in a good buying range right now.

BREAKING DOWN ALTERNATIVE ENERGY

Alternative energy has been a very hot topic as of late throughout the world of investing, so here is a breakdown of what all the fuss is about.

There are 6 main types of alternative energy being discussed today; wind, hydro, solar, biofuels, fuel cells, and LED's.

Wind - This industry is already competitive with oil and gas since it costs the same as oil and gas when it comes to generating electricity. However, the downfall of this industry is the fact that there are not too many available sites since this is not exactly the newest technology.

Hydro - Again like wind growth, hydro power is limited because of a lack of sites. Another big negative of hydro power is the fact that it destroys the environment, along with the communities and ecosystems of many species.

Solar - The cost is expected to become competitive enough in the next 5-10 years to make a large impact. Furthermore, of the 5 types of alternative energy it appears that solar has the most potential in the next 25 years. Best of all, solar power relies on the sun, the most abundant source of energy known to mankind.

Biofuels - Probably the most talked about of the group, biofuels like ethanol are probably the best near-term option for replacing fossil fuels, but also pose the least rewards through conservation.

Fuel cells - after many years of research, fuel cells are still far from being efficient so this technology probably has the least chance to succeed in the near-term. However, they will surely be very useful one day, especially in cars.

LED's - as discussed in the previous article "One in a lifetime opportunity", LEDs are a force to be reckoned with. LEDs should hit their peak in 2010. For more on LEDs and a company which we like very much (symbol: CLRK), please check Darwinian's article.

As for companies in these industries that have been put through the MGR Coefficient; only 2 have been completed which are TSL and ESLR. TSL received a score of 2.35 while ESLR received a score of 3.44

THE EVOLUTION OF THE ETF

ETFs have became a huge market and provide a hybrid of a mutual fund and a stock. ETFs were first mainly a collection of stocks, but have now evolved into many different forms. For example, ETFs now exist for currency markets. If you believe that the Yen is going to move higher, you can buy an ETF which replicates the movement of the Yen. A list of such ETFs can be found at http://www.currencyshares.com/home/CurrencyShares.rails.

Also, ETFs now exist which actually move opposite to a certain parameter. For example, the symbol QID is an ETF which moves at twice the rate in the opposite direction of the NASDAQ 100 Index. A list of such ETFs can be found at http://www.proshares.com/funds. You can also find ETFs for sectors at this link.

All in all, it looks like ETFs have proven to be a good way to invest your money, especially if you can not decide between investing in a mutual fund or a stock.

AROUND THE WORLD AGAIN

As of right now the Nikkei is down about 3% and the Hang Seng is down about 2.50%. This may be a reaction to what happened in the American markets today when the Dow fell 1.97%, the S&P 500 fell 2.04%, and the NASDAQ fell 2.15%. However, in my opinion this will lead to yet another horrid day tomorrow for the American markets, so all you bargain hunters and value buyers get ready to go shopping soon because the big sale is on!

THE MGR COEFFICIENT'S PERFORMANCE

In 2006, the Dow Jones Industrial Average had an outstanding return of 16%. Many people made great returns on their portfolios; however, it is easy to make money in a bull market since 3 out of 4 stocks move in tandem with the market. It is in a bear market that an investor can really prove their worth by beating the indexes and making money, while others stand by and watch their investments sink. In times like these, an investor needs an outstanding system to beat the market.

Here is how The MGR Coefficient did over the past 3 years compared to the major indices:

In 2007 (YTD as of March 3), a portfolio based on stock and mutual fund picks ranking high on The MGR Coefficient achieved a gain of 3.87%. This return beat the S&P 500 by 6.07% (which is down 2.20%), beat the Dow Jones Industrial Average by 6.67% (down 2.80%), and beat the NASDAQ by 6.47% (down 2.60%). Using The MGR Coefficient currently (as of March 7^th) I am in the top 3% of over 200,000 participants in the CNBC.com challenge called The Million Dollar Portfolio Challenge.

THE MGR COEFFICIENT WALKS THE WALK WITH A COOL MILL

CNBC.com is hosting a Million Dollar Portfolio Challenge in which participants receive a "fake" million dollars to invest in stocks (with certain limitations). I signed up and for my portfolio I basically divided the money 3 ways and invested it into the 3 top ranking stocks according to the MGR Coefficient. As of right now, my portfolio is in the top 3% of all participants.

Another point for the good guys...

IT'S A SMALL WORLD

As of right now the NIKKEI is up about 1.22% and the Hang Seng is up about 1.97%, both gapping up. Looking at the after market activity here in the U.S., many stocks on my watch list are up significantly after hours so I would expect to see a bullish run tomorrow. Since the global markets effected us negatively, they should effect us positively as well on this move upwards.

The magic number 12,000

The DJIA fell over 120 points on Friday, showing that investors are not done running for the exits. I think the DJIA may fall to 12,000 but I do not look for it to fall past that as 12,000 was the psychological barrier before and should now be the support. Looking at the last 6 months
(chart from http://finance.yahoo.com/q/bc?s=%5EDJI&t=6m&l
=on&z=m&q=l&c=) any dips towards 12,000 were quickly reversed, especially in November where it actually turned around right on 12,000. I think this shows that once we hit 12,000 in the near future, or come very close to it, investors should pull the trigger. However if we go below 12,000 and stay down there for a little while, investors should be careful as the next stop could be pretty far.













Looking at the last year to date in the chart below (chart from http://finance.yahoo.com/q/bc?s=%5EDJI&t=1y&l=on&z=m&q=l&c=) from the last year, the next stop could be 11,500 as support was found there in September. If investors remain spooked and panic even further after reaching 11,500, then our next stop could be 10,650 as there was a double bottom seen there in June and July of '06, the last real sign of weakness in the DJIA before this week.

MOVIN' ON UP

After the Dow fell more than 200 points today, it staged quite a comeback. This is a healthy sign and not since last June have we seen such a volatile price movement in the Dow Jones Industrial Average. Although these last 3 days of the market have been very volatile, I believe that overall the outcome is positive.

In this entry, I wanted to say that although it is difficult for investors to step up to the bat when the prices keep plummeting, the best buying opportunities were seen in these last 3 days (especially the first "crash" day) since almost every stock was down a lot. If we agreed with the masses and sold when they did or bought when they did, that would be mean we think like them and that is not true since the masses do not make big money in the stock market. Whenever you see the media and every investor being very bullish you should be very cautious and begin to sell because you know you are at the top of the cycle at this point And, when everyone is talking about how the stock market is crashing, that is when investors should be buying stocks hand over fist to get the bargains that make K-Mart look like Whole Foods.

THE RUNNING OF THE BULLS....BUT WHICH WAY?

After the Dow suffered its largest one day point loss in over 5 years many investors are worried about what to do next. In my opinion, I believe that the Dow will hold up at this area (12300) but the increase will not be achieved as quickly as it was in the later part of 2006.

As for what stocks to invest in, I look to our rating system called the MGR Coefficient. By looking at over 25 diversified parameters, the MGR Coefficient creates a score which reflects the overall attractiveness of a security. These parameters consist of many different variations of investment research including detailed technical analysis and in-depth fundamental analysis.

Here are the top 3 rated stocks according to the MGR Coefficient to date:

#1. GRMN - score from 02/26/07
#2. AXR - score from 02/03/07
#3. GIGM - score from 01/25/07

I believe these 3 stocks should outperform the general indexes in the next few months.

I also believe that oil plays will prove to be profitable, as oil is now holding above $60 a barrel and looks like it will be heading higher. A good oil play in my opinion is USO. A good description of USO can be found at http://finance.yahoo.com/q/pr?s=USO, which reads:

"The investment seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil. The fund is nondiversified."