May 25, 2010 Update

Testing testing testing

Buy Berkshire Hathaway B-Shares, Sell Short SP500

Berkshire Hathaway is likely to split the price of its B-shares. Given how closely BRK/B has tracked the S&P500 and how it has lagged by 20% over the past year, I can surmise that BRK/B will outperform the SP500 going forward. Risk is 5% or less. If Berkshire splits the shares, the SP500 will likely add it to the benchmark index, which will yield billions of dollars worth of buy orders for BRK shares in the near future. I view the S&P500 as a simple hedge, although GE or other conglomerates could suffice.

Goal 10% return in 4 weeks. Risk 5%. Raise stop to breakeven after 2 weeks.

2:27PM Tuesday, January 19, 2010

Buy AONE - A123 Systems

19.85 Last, +1.53

IPO 13.50 this year, rallied to 28.20, then fell back to 14.31.

I'm a believer in electric cars and think that A123 may profit from the production of lithium-ion batteries.

There is positive news today about a JV with another company.

Do your own due diligence.

Risk is relatively high as the stock moves about 10% per day. As time progresses I foresee the volatility dropping. I would consider buying at intervals for the next year. The hard part is setting a stop loss level. $14 seems logical to me, but also it is obvious. Perhaps $12 as that is 10% below the IPO price. So, buy slowly so that by the time a year goes by we can see if A123 is a leader or a laggard in the field. If it is a leader we can keep buying more and build up to a 10% position in a portfolio, (use 10% as a cost basis calculation).

Tim West 11:10AM

BUY SILVER

Silver exchange traded funds are available -
Latest prices: SLV 17.35, SIVR 17.68

The pullback in Silver represents a buying opportunity. I view downside risk as reasonable while there is good potential for upside into year-end. I'd like to see a retest of 19-20 in SLV by January 15 and if not then exit. Raise stop to breakeven on January 1st.

Review trade on January 1st to potentially increase position.

Tim West 10:18AM Wednesday, Dec 16th

VIX THIS LOW SPELLS TROUBLE AHEAD

SELL SHORT THE STOCK MARKET NOW: RISK 1%. TARGET 3% INITIALLY.
4:55PM Eastern Standard Time.
Markets are closed. 1104.75 Mar10 ESH0 Futures.

Additional comments to follow.

Tim West

Somewhat bearish environment -

Today's VIX & PUT/CALL RATIO movement is a sign of over-optimism and is therefore bearish.

Here's what happened so far today:

Initially prices declined from 8880 on the DJIA to 8820 (futures, Sep) and it was difficult to assess the situation - there was put-buying of course, and could be construed as bearish, so when prices advanced to new highs (back to 8900), that implied there is a solid cushion of support under the market at 8820. Prices have waffled from 8850 to 8900 since that time and then broke down to test 8820 late this afternoon.

What I've seen overall is a flat market with VIX falling and a high overall trading volume in puts.

I'm going to hold off on making a market call at this point - other than I'm concerned that a bearish event is setting up where short-term you get "put-selling together with falling prices" and that means a sharp selloff is likely just around the corner. [It is the opposite of when you see "call selling in a price advance", which is bullish, of course. It shows concern that prices will fall and of course, that means prices advance. ]

I may just offer the idea that 8840-8850 can be sold with an 8875 stop - targeting the same on the downside, about 8810-8800 into the close.

Many more earnings announcements are due this week as this is a big EPS release week for the S&P500 consituents.

Tim West 3:38PM EST 8828 YMu9 last

SELL SIGNAL 943.50 ESU9

Sell signal registered at 12:30PM

New high was needed after three hours = weak market

Sell short and use 5 pt stop. Lower stop to breakeven after 1 hour. Trail profit by 5 pts.

Target 5 pts initially.

12:43PM now with ES at 944.00 bid