I spend a good part of each morning chatting with my friend Duru about the action in the market. Since he’s in Cali, he can do some trading in the mornings before he goes to his real job. I thought today’s chat would be a good one to post because of our discussion about NVEC. I was in it two days ago when it made that 40% move. I was able to snag a small piece of that move, about 10%, but I sold it way too soon. That’s one of my biggest problems. I had my stop set and had already locked in a decent gain. But I got a little nervous because the NASDAQ was so weak. At the first sign of weakness I just sold it and took my quick 10%. You know what happened next. I sold it just above 32. It never even got close to where my stop was and ended the day at 36.43. Duru was in it today (I think he bought it yesterday) and I wasn’t. You can see what happened below. :-) (Note, I’ve cut any mentions of what he’s currently holding at his request.)

Mike (9:33:02 AM): in GPRO and FARO

Mike (9:33:22 AM): you see CECO?

Duru (9:33:25 AM): Stopped out PSRC…actually, I forgot to take
out limit.

Duru (9:33:29 AM): Nope, not yet!

Duru (9:33:44 AM): DAMN!

Mike (9:33:45 AM): I pulled my PSRC stop… gonna set it
at the 10:00 low

Duru (9:33:50 AM): More damning news.

Duru (9:33:53 AM): ?

Mike (9:33:54 AM): yep

Mike (9:34:01 AM): SEC investigation

Mike (9:34:53 AM): in CALM

Duru (9:34:57 AM): Wow - too many black swans to count. I
smell a huge one too.

Duru (9:35:04 AM): You are rolling! I am in ???

Mike (9:35:11 AM): 09:33 CALM Cal-Maine Foods Color
(15.25 +0.79) — Update –



Stock rises almost 5.6% in early action on
news stock to be included in the Russell 2000.
Hearing that approx. 921,000 shares of CALM
has to be bought by Russell 2000 indexers by
June 30th, which represents a significant portion
of co’s float and is contributing to a short-squeeze
in this name (which stands at approx. 68% of the
float).

Duru (9:35:59 AM): wow - that is a major squeeze coming

Mike (9:36:21 AM): I hope so!

Duru (9:36:57 AM): HANS tempting?

Mike (9:37:19 AM): somewhat

Mike (9:37:32 AM): would rather have a longer pullback
timewise

Duru (9:37:55 AM): right

Duru (9:38:02 AM): Damn analysts popped me on ???.

Duru (9:38:45 AM): I don’t know how I missed that CECO news.

Mike (9:38:45 AM): damn

Mike (9:38:52 AM): damn job

Duru (9:39:28 AM): Indeed

Duru (9:39:44 AM): Of course, stock is coming to the better short
entry of $36 now!

Duru (9:41:01 AM): DId u see the performance of networking
HW yesterday? I think ZHNE is now riding the same
thing.

Mike (9:41:17 AM): nope

Duru (9:41:26 AM): Even AVCI is looking better

Duru (9:41:42 AM): See BRCM

Mike (9:41:56 AM): nice

Duru (9:43:34 AM): DKS coming in a bit

Mike (9:54:21 AM): in ANDW

Duru (10:02:14 AM): ??? fading a bit

Mike (10:03:20 AM): did you see Barron’s PLMO
comments?

Duru (10:04:04 AM): No - I am behind on reading. I think I caught
wind of something about a peak in briefing?

Mike (10:04:21 AM): "they’ve had their run"

Duru (10:04:39 AM): More buyers out there… lol

Mike (10:04:55 AM): yep

Duru (10:05:31 AM): Should be interesting. Peeps loaded up on
puts yesterday too.

Mike (10:05:49 AM): WTF? - 10:05 TASR TASER
Intl: Hearing chatter that co negotiating to sell
TASERs in Sharper Image stores (30.22 +0.72)

Duru (10:06:02 AM): That’s insane

Mike (10:06:15 AM): cops will be getting TASEd

Mike (10:06:19 AM): :-D

Mike (10:06:32 AM): hell, if they can sell guns to the
public…

Duru (10:06:39 AM): true…

Duru (10:07:30 AM): NTGR also popped yesterday…but I am
wondering whether it is a short.

Mike (10:09:59 AM): damn, I almost did the ‘dummy’
short on CECO

Duru (10:10:53 AM): lol - I was tempted as soon as you told me
about it.

Duru (10:11:10 AM): Was too busy on other stuff tho

Duru (10:11:57 AM): ECLP sneaking up….?

Duru (10:12:21 AM): DITC still creeping

Mike (10:13:25 AM): yep

Mike (10:14:39 AM): 10:13 PLMO Reversal Alert —
palmOne finds bid off early lows as momentum
crowd looks to bid stock through negative
Barron’s story (28.95 -0.41) — Update –

Duru (10:15:46 AM): cool

Duru (10:15:57 AM): Actually, I guess I am rooting for a nice
pullback to buy into!

Duru (10:16:28 AM): No disrespect to your IRA of course.

Mike (10:17:30 AM): lol.. I just sold 1/2 of my IRA shares

Mike (10:17:52 AM): 10:16 TASR TASER Intl follow-up
(31.08 +1.58) — Update –



The specific talk on TASR is that a
boutique firm is suggesting that company will
start selling a scaled down version of its TASER
weapon in Sharper Image stores… see 10:05
update for related commentary

Mike (10:18:01 AM): boutique firm = bucket shop

Mike (10:18:20 AM): Livermore’s ghost

Duru (10:18:27 AM): exactly - this is shortable news

Mike (10:18:36 AM): no shres

Duru (10:18:38 AM): Although I wouldn’t!

Mike (10:18:39 AM): shares

Mike (10:19:00 AM): I had enough of shorting that POS
for one lifetime :-[

Duru (10:19:17 AM): That’s right….but I am pissed I bailed on my
long last week. Ugh…

Mike (10:31:53 AM): NVEC

Duru (10:32:44 AM): cool - you scared me for a sec!

Duru (10:34:16 AM): It’s running hard now

Mike (10:34:24 AM): yep

Duru (10:34:29 AM): whew!

Mike (10:34:32 AM): lol

Duru (10:34:41 AM): for now

Mike (10:40:24 AM): FARO making new highs

Duru (10:40:41 AM): cool

Duru (10:40:56 AM): I really like this one

Duru (10:41:40 AM): Thanks for reminding me

Mike (10:41:50 AM): no prob

Mike (10:42:12 AM): 10:41 JOSB Jos. A. Bank: stock
weakness on Barron’s article creates buying
opportunity — Ryan Beck (29.37 +0.78)



Ryan Beck comments that a follow-up
story to last year’s negative Barron’s article on
JOSB appeared this past weekend, adding to the
stock’s recent weakness. Firm believes there were
several misstatements in the article, which
focused upon the co’s gross margins and
inventories along with a mention of the recent
subpoena from the New York Attorney General’s
office. In firm’s view, the market response has
been an overreaction and has created a buying
opportunity. Firm notes that its Q2 est could be
low and that channel checks indicate a strong
Father’s Day.

Mike (10:42:32 AM): nice hammer on the lower BB
yesterday

Mike (10:43:04 AM): I can’t f*ck with it though… that’s
more your style

Mike (10:43:30 AM): NVEC off the chain.. without me >:o

Duru (10:43:44 AM): Get on! Get on!

Duru (10:43:49 AM): I am steaming about JOSB.

Duru (10:43:54 AM): If that analyst is right!

Duru (10:44:22 AM): sheeyit - time to put a stop in on this puppy…

Duru (10:44:44 AM): I loaded up too - so you can imagine how
nervous I have been!

Mike (10:44:45 AM): you short?

Duru (10:45:01 AM): no way - no shares….broker protected me
from myself.

Mike (10:45:06 AM): lmao

Duru (10:45:09 AM): I am long and strong

Mike (10:45:43 AM): oh.. I thought you were talking about
JOSB

Duru (10:46:05 AM): No. I am deciding what to do about JOSB. I
liked that hammer too and was tempted…but I am also
looking at the trend!

Mike (10:46:28 AM): it’s your friend :-D

Duru (10:46:34 AM): indeed

Duru (10:46:36 AM): SCHN….

Mike (10:46:57 AM): nice

Duru (10:47:04 AM): must be some news

Mike (10:47:19 AM): all Briefing had was this - 10:35
SCHN Schnitzer Steel catches a bid to challenge
its 2-month highs (28.00 +1.01) — Technical –



The stock finds a bid among the Steel
group’s recent relative strength. It is challenging
its May high near 28.27.

Duru (10:48:11 AM): I hate putting in a stop on NVEC because of
its large volatility. It is sooo manipulated to take out stops,
I think.

Duru (10:48:18 AM): Ah, that is not news enough to buy. lol

Duru (10:48:49 AM): Actually, I am just going to sell right here….

Mike (10:49:09 AM): it has to hit 40 now! ;-)

Duru (10:49:10 AM): I am getting greedy.

Duru (10:49:13 AM): lol

Mike (10:49:29 AM): just trail a stop

Mike (10:49:36 AM): don’t do what I did 2 days ago

Duru (10:49:51 AM): I pretty much got what I wanted for now.

Mike (10:49:59 AM): I hear ya

Duru (10:50:14 AM): It would be different if there was some real
news behind this.

Duru (10:50:39 AM): …and the Nazz were at 2100 and going
higher!

Mike (10:50:52 AM): true dat

Duru (10:51:46 AM): But keep it on your screen. Probably a good
one to buy on dips.

Duru (10:53:37 AM): Trying ??? short again. Hopped on it on the
break of $XX.

Mike (10:55:05 AM): expecting that lower BB to go
vertical?

Duru (10:55:55 AM): Or at least this thing to trickle on down. I am
following the news and lack of pop from an upgrade
yesterday.

Duru (10:56:14 AM): Liking all the dead air underneath…

Mike (10:56:55 AM): I dpn’t like the way oversold
stochastic nor the MMAs… but if could stay
oversold

Duru (10:58:13 AM): I guess that’s what I am banking on. I had a
quick trigger when I first shorted on the gap down and
bailed at the first sign of an oversold bounce…

Mike (11:00:19 AM): NVTL :-)

Mike (11:00:40 AM): need to roll my stop up on that bad
boy

Duru (11:01:27 AM): Oh - I thought you got stopped out for some
reason

Mike (11:02:55 AM): that was yesterday… I bought it back
when the Naz started running yesterday
afternoon

Duru (11:03:08 AM): ah - cool

Mike (11:04:55 AM): DITC

Mike (11:04:58 AM): oh my

Duru (11:05:50 AM): Goodness!

Mike (11:05:59 AM): CALM resting on the upper BB for ya

Mike (11:06:03 AM): NVEC popping!

Duru (11:06:26 AM): InPlay: Ditech demonstrates relative
strength in early trade as telecom equipment suppliers
continue group advance

Duru (11:06:36 AM): wow!

Mike (11:06:43 AM): how’d I miss that?

Mike (11:06:58 AM): maybe it’s the 3 screens I’m trying to
watch

Duru (11:07:11 AM): It was in the Yahoo! news. But as I was
telling ya, networking gear copmanies are getting a bid. I
myself forgot about DITC!

Duru (11:07:17 AM): Hmmm…could it be? lol

Mike (11:07:51 AM): you know I have In Play alerts
popping up in real time

Mike (11:07:57 AM): out of PSRC

Duru (11:08:09 AM): That one was a disappointment

Mike (11:08:13 AM): yep

Mike (11:08:17 AM): next!

Duru (11:08:29 AM): :-D

Duru (11:09:22 AM): ??? about to make HOD…>:o

Mike (11:10:06 AM): told you NVEC was headed to 40

Mike (11:10:21 AM): I should have bought it when you
sold :-D

Duru (11:10:29 AM): I know - but risk was too great to me
here…especially after I first got burned yesterday.

Duru (11:10:33 AM): Indeed!

Duru (11:10:43 AM): The bounce from the 50DMA was a great
buy point.

Duru (11:11:02 AM): SGP has run away from me now. >:o

Duru (11:11:08 AM): I was being cheap yesterday. UGh.

Duru (11:11:44 AM): Check out CSTR…a straight line…

Mike (11:12:26 AM): that’s a nutty stock

Duru (11:12:34 AM): yup

Duru (11:13:15 AM): I don’t have that JOSB comment in my IN
Play

Mike (11:13:49 AM): NVEC oh so close to 40

Duru (11:14:05 AM): Short!

Duru (11:14:28 AM): Wow - it really accelerated after I sold. :-[

Duru (11:16:56 AM): You hear the WMT mess right? I wonder if
WMT could actually get slamalama on this one.

Mike (11:18:06 AM): I heard something but didn’t pay
attention

Mike (11:18:22 AM): I’ve been keeping CNBC turned off
most of the day recently

Duru (11:18:37 AM): Big sex discrimination suit. Fools are
estimating liabilities in excess of $1B.

Mike (11:18:44 AM): damn

Duru (11:18:53 AM): Huge class action with lotso women with
consistent stories. Incredible stuff.

Mike (11:24:50 AM): looks like another chop-filled day..
time to bust out some magazines

Duru (11:25:19 AM): Indeed

Duru (11:26:32 AM): TASR @ HOD

Mike (11:26:37 AM): d’oh

Duru (11:26:46 AM): That’s funny

Mike (11:27:00 AM): I almost pulled the trigger on that
one earlier

Mike (11:27:16 AM): NVEC at 40!

Duru (11:27:20 AM): I see! Wow…

Duru (11:28:11 AM): It’s only running cuz I sold, ya know. If I had
put in the stop, the stock would dove right into it.

Mike (11:28:23 AM): lmao

Mike (11:28:51 AM): see, I tried to give you some $$$ but
you said you had enough

Duru (11:29:18 AM): What a trip, huh? I didn’t want to get greedy.
I have been through a lot with this stock!

Duru (11:29:49 AM): But I am a buyer on dips. It can’t get much
higher without another rest, can it…?! lol

Mike (11:29:50 AM): just trail those stops… it’s not like
you need the cash to pay your bills… like some of
us :-[

Duru (11:29:57 AM): True

Duru (11:30:55 AM): Stupid ETrade doesn’t have trailing stops
though and that’s where I do most of the daytrading. Will
have to do an entire reassessment at some point.

Mike (11:31:43 AM): for the Nth time… bring your ass
over to CyberTrader

Duru (11:32:10 AM): lol - oh the pain of moving money and
learning something new (so says the old dog).

Mike (11:32:16 AM): but you could have just rolled them
up manually

Mike (11:32:40 AM): have I ever steered you wrong
before? besides that one time at band camp? ;-)

Duru (11:33:01 AM): Now THAT is true. I do do that. Call it
superstitition but I just knew putting in a stop would invite
a ganking.

Duru (11:33:05 AM): Yeah, right! Good one!

Mike (11:33:20 AM): CECO trying to save face

Duru (11:33:33 AM): News conference?

Mike (11:33:34 AM): 11:31 CECO Career Education: On
call, co says does not believe lawsuit has merit,
they are expecting suit will be dismissed (47.90
-10.68) — Update

Duru (11:33:54 AM): Their faces must be blue by now
as many times as they have repeated that

Mike (11:34:00 AM): can’t f*ck with that one
either

Duru (11:34:22 AM): Not even I can fade the funk on
that one right now.

Mike (11:34:46 AM): so of course it’ll rally

Duru (11:34:55 AM): >:o

Duru (11:35:19 AM): You could hedge…shit, I can’t
believe I haven’t even looked into that!

Mike (11:35:31 AM): in GTRC

Mike (11:35:41 AM): then I’d have to learn
something new

Mike (11:35:43 AM): lmao

Duru (11:36:05 AM): Indeed - we’ll have to
compromise. You with options and me in Cybertrader. lol

That NVEC situation is just classic, and shows why trading with real money is so much more difficult than paper trading. It’s so easy to try to play it ’safe’, and cut your winners instead of letting them run when real money is on the line. And don’t believe that line about “nobody ever went broke taking profits”. You can easily go broke if you take your profits too soon and your losers wipe out your self-limited gains.

The struggle continues…

Edit to add: I know some of you are coming here looking for info about TASER and Sharper Image. Briefing.com just posted this (June 25, 2004):

08:53 TASR TASER Intl: appears consumer version of the X26 TASER will be available this summer — Morgan Keegan (35.42 )

Morgan Keegan comments that it appears that a consumer version of the X26 TASER will be available this summer, as mgmt reported in early 2004. In addition, firm has heard rumors that a national retailer will be carrying the weapon to sell to individuals (see Briefing.com rumor June 23rd on chatter of Sharper Image relationship). Mgmt was not able to confirm this report. However, it is firm’s opinion that this development could benefit shares of TASR more than the material impact to the company itself. Historically, TASER has sold the majority of its consumer products directly to customers via the co’s website. Morgan Keegan believes that this alternative distribution channel would raise consumer recognition of the product and have the potential to increase sales of the products; notes that TASER weapons are currently restricted for consumer use in 7 states: Hawaii, Massachusetts, Michigan, New Jersey, New York, Rhode Island, and Wisconsin. If the TASER consumer weapons become available through major retail outlets and achieve widespread acceptance, firm believes there is a chance that some of the restrictions could be lifted… Firm also raising FY04 est to $0.59 from $0.54 (Reuters consensus $0.48).