I got couple of emails asking about SNEN, to explain the rationale why we bought it, etc. Well... I know why you ask me this. SNEN has working capital deficiency of $11.9 M and it is due by the end of September, (9/30). Do I know if they resolved this problem by reducing accounts receivables (that's what they said they are going to do in August)? Of course, I don't know. If you know, let me know and we'll buy more than 0.5% of our portfolio. LOL.
I have 140 plays and I can't know about every problem of every company. So, thank you for asking. But, in case of SNEN I knew about their working capital issues and I watched it and I waited... Otherwise I would have bought it 2 weeks ago.
I know what I see - the chart. On August 18 9:30am it drops to $0.8, by 12:30pm recovers to $1.30. Huge volume - 1 average month volume in 1 day! Today, a month since that SNEN is still there -$1.29 - $1.35. Almost no movement at all, regardless and whatever... No movement. I don't know how to call this chart pattern, but it is quite... interesting. Someone knows true value of this company and someone is very confident that this is the company's true value. You can call this someone an "insider", or "market maker", or "the invisible hand of the market". In any case, I like his/her confidence, I like his/her accuracy and I buy it. When the crowd discovers it, we are already here ! That's the plan.
Anyway, people, it's just 0.5% of the portfolio. For every 10K of your investment it is just $50! And this is my KEY rationale - diversification. "Are you diversified ?" (J.Cramer) LOL
No comments:
Post a Comment