Thursday, January 26, 2012

The Daily Note - I'm No Analyst

Nor do I pretend to be. I'm just like everyone else out here on the stream with a point of view and an opinion. I will not hit you over the head nor will I negate your point by making derogatory remarks or nasty jokes about your eyesight, brainpower or size of your shoe.

We all suffer from an experience or two which clouds our vision if we let it. We may even have thoughts in the moment that negate anything positive we may think. That is what many pro or amateur analysts don't realize and neither do their readers. We do not know what they were really thinking at the writing of the article, do they have a negative disposition or a positive bias toward the subject. Nobody is immune from "coloring" their writing with their true opinion even if the figures show otherwise. Knowingly, I don't like to analyze a company nor your opinion of it.

If you have followed me for some time, it won't be news to you that NFLX was on my "uplist" last year until the turn. All the time I was trying to penetrate the bias view of Netflix permiating the blogosphere. Opinions were flying about, calling to short the company and some of it with venom were posted regularly. Regardless, the stock kept rising and a couple of hundred points later, there was a turn. Interestingly it happened just about the time where many "threw their hat in the rink" after being punished all the way up the ladder.

It was time to short then because when traders give in, it's a sure signal that the stock has topped, or bottomed. I've been short until the last gap down in November, at which time it was put on my "shelf". All stocks need to rest from our list sometimes. It looked exhausted from the ride up and the ride down, and frankly I was not about to jump on the band wagon of further bashing a company that was so innovative to begin with. If it was going to go to $50 or $30, I was not going along with the ride that was purely emotional.

Just as a fyi on the side, many people I had conversations with during the last year, interestingly revealed something important to me about Netflix. They were loyal and that loyalty did not really go away and in my opinion, no business can make it without loyalty and it's also true that a business with strong loyalty is hard to demolish.

Since then, from time to time I looked at the NFLX chart for movement and often it looked too exhausted for it. Then a slow rise began to happen in December, which became a crescendo in January; nice signal to start playing again, and so we did. Mystery about why I did not ponder but reasons were revealed in yesterday's earning report. I'd say someone knew something in early January, but then I'm no analyst, therefore I just follow the chart and the chart is where the earnings plays get born.

Interestingly after the announcement, I again started seeing many comments about NFLX and the report being doctored, impossible, and the battle cry for going short one more time. A sure signal that ....

The Vision by Chris de Burgh on Grooveshark

Happy Trading, Living and Dancing

The Daily Pick - NFLX

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