A2M - The A2 Milk Company

[Rainman]

Over hyped if you ask me, feels like the tulip bubble...

I agree. These stocks - BAL, A2M, BGA - are not just over-hyped. They currently form the most crowded trade on the ASX and have been inflated massively above their fundamentals. It will not take much of a trigger to send the traders who have piled into these stocks fleeing for the exits at the first sight of trouble.

I don't think that we are at that stage yet. But when we are, I am going to take a small short position and then add to it if the panic sets in.

 

[Rainman]

Bubbles tend to last longer than you think, better off riding the trend for now.

If you are suggesting that I or anyone else buy into these stocks at these levels, then you have already drunk too much Kool-Aid.

At this stage, the position to take is short, not long, although I don't doubt that these stocks could go higher. I can't say for how much higher they'll run but BAL is already trading at a P/E of 100, so I'd say not much higher.

 

[skc]

Bubbles tend to last longer than you think, better off riding the trend for now.

I've watching these names for some time and the price action was getting a bit silly especially in the past week or so. We saw the first meaningful sector-wide reversal today... look at A2M, BAL, BGA, FNP, BFC, AHF. They are also good candidates for locking in some profits for the small cap managers at year end.

If they open flat to slightly higher tomorrow it would be a decent short sectup. Another 10-12% fall however might offer a good bounce trade.

Too bad I am on holidays so won't be trading them tomorrow.

 

[Rainman]

Bubbles tend to last longer than you think, better off riding the trend for now.

I would add also that, if you knew anything about the history of bubbles, you would know that those who ride them almost never know when to get off them. Examples:

1. Sir Isaac Newton and the South Seas bubble: http://www.telegraph.co.uk/finance/.../How-not-to-invest-like-Sir-Isaac-Newton.html;
   
   
2. Stanley Druckenmiller and the dot-com bubble: http://dealbook.nytimes.com/2010/08/18/reviewing-the-druckenmiller-decades/?_r=0.

Perhaps you will be the exception.

 

[CanOz]

I would add also that, if you knew anything about the history of bubbles, you would know that those who ride them almost never know when to get off them. Examples:

1. Sir Isaac Newton and the South Seas bubble: http://www.telegraph.co.uk/finance/.../How-not-to-invest-like-Sir-Isaac-Newton.html;
   
   
2. Stanley Druckenmiller and the dot-com bubble: http://dealbook.nytimes.com/2010/08/18/reviewing-the-druckenmiller-decades/?_r=0.

Perhaps you will be the exception.

I'm not even in them any more....I exited bal before my holiday...

Let's leave it at that shall we...

 

[Rainman]

I'm not even in them any more....I exited bal before my holiday...

If you're not in them anymore yourself, why are you proposing that others "ride the trend"?

 

[CanOz]

If you're not in them anymore yourself, why are you proposing that others "ride the trend"?

Look mate, this is going to slide into a debate about price action versus fundamentals, let's agree to let it go.

 

[Rainman]

Look mate, this is going to slide into a debate about price action versus fundamentals, let's agree to let it go.

No, it's not. I am genuinely interested in hearing your reasons for selling out of a very bubbly stock, BAL, on the one hand and for simultaneously suggesting that others buy it on the other.

The logic of it fascinates me.

 

[CanOz]

No, it's not. I am genuinely interested in hearing your reasons for selling out of a very bubbly stock, BAL, on the one hand and for simultaneously suggesting that others buy it on the other.

The logic of it fascinates me.

Check the BAL thread

 

[tech/a]

Was in Charts of Interest at $2.60

 

[Boggo]

Was in Charts of Interest at $2.60

and a top up signal on the weekly, there's two days to go still though.

 

[RandomInvestor]

Hey guys I am curious to get your opinions on the A2Milk company, I been looking at it and they got quite volatile earnings, I think this business has long term prospects but seems hard to value. Do you guys reckon the volatile earnings is because its still early? Like I know the company has been around since 2000 but isn't it from a few years ago they started to get big?

 

[tech/a]

Has been on charts of interest for months
Showed the breakout at $2.55
So that's 40% since then.

Opinion
It's been belting along.
If your a technical trader you would have Been in front
Procrastination is a profit killer.

 

[Boggo]

...

Opinion
It's been belting along.
If your a technical trader you would have Been in front
Procrastination is a profit killer.

Yes, a couple of these every month will do nicely

 

[RandomInvestor]

Has been on charts of interest for months
Showed the breakout at $2.55
So that's 40% since then.

Opinion
It's been belting along.
If your a technical trader you would have Been in front
Procrastination is a profit killer.

I meant in the term of the business economies what do you think?

 

[tech/a]

I have no interest in the business
Economics
90% of the time a trade is nothing more
Than a code and a chart.

 

[RandomInvestor]

I have no interest in the business
Economics
90% of the time a trade is nothing more
Than a code and a chart.

Oh you do technical analysis? I am not too familiar with it but know what it is. Just curious when you choose a company do you sell right after its gone up a dollar or? And do you diversify or put a large sum on a company which you think will go up then quickly sell it after a couple of hours?

 

[Boggo]

As I have mentioned on a number of occassions the first place you are going to see problems with a stock is on a chart, regardless of what information is out in the public domain.

Triathlete summed it up there, a recent example was on the QIN thread yesterday when negative news came out.
I had that in a watchlist but the daily chart sentiment indicated that something was negative back in January.

I have no interest in the business
Economics
90% of the time a trade is nothing more
Than a code and a chart.

Same here, not particularly interested in what they do or what the numbers are for the last six months.
The only time I take notice of fundamentally based opinions is when StockDoctor lowers their opinion on a companies fundamental outlook, a recent example of that was VOC but the chart was already telling us there was an issue pending.

Just my

 

[tech/a]

Oh you do technical analysis? I am not too familiar with it but know what it is. Just curious when you choose a company do you sell right after its gone up a dollar or? And do you diversify or put a large sum on a company which you think will go up then quickly sell it after a couple of hours?

Dependant on the individual and combined price bars
They tell a lot.
If you have a look at Charts of interest you'll see both ends
Entry and exits

 

[RandomInvestor]

Dependant on the individual and combined price bars
They tell a lot.
If you have a look at Charts of interest you'll see both ends
Entry and exits

Ah ok. I am not 100% sure but in a day for example trading, don't you barely make anything because of capital gains tax and brokerage fee?