Thursday, December 20, 2007

LDK Solar (LDK) Target Fast Approaches

Posted by TraderMark at 12:35 PM TweetThis
Well my mention this morning of a potential to buy LDK Solar (LDK) in $46-$47 range is coming to fruition much earlier than I anticipated. I await with limit orders... currently $49 and weakening by the minute as the "long and strong" bulls abandon ship with a fury. I just cannot imagine what those who were buying yesterday in the $60s or even $70+ must be thinking.

This is the other part of investing that took me a long time to recognize. Trying to identify whom you are investing with - the crowd. When you are stuck with the fast money crowd - they will turn on you in an instant... the same guys talking about how this is a great 5 year stock to own, will be the first to flee as their intention was simply to pump the stock up for a day trade or a swing trade. So always look around the room and realize who these sharks are.

Compare this to a stock like Suntech Power (STP) which is like the old folks home (no offense to any old folks reading the blog) ;) ... very little fast money, a lot of actual long term buy and hold types who look to the long term. A very different environment. Doesn't mean that stock cannot go down, but it will be for very different reasons. Anyhow the high school camp that is LDK Solar investors is quickly clearing out.... soon the parents can come in and try to clean the mess. And no I don't expect a V shaped bounce back - it might happen, but certainly this could take quite a bit of time to fix the damage left by those darn teenagers....

The irony in it all, is we have far more information than we did when the stock went ballistic...

Long LDK Solar and Suntech Power in fund; long both in personal account

Posted by TraderMark at 12:35 PM Comments (2) | Edit This Post | Create A New Post

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2 comments:

oth said...

Don't you think it might go down to $40 or below? People who made it drop to $30 on inventory concerns are more likely to make the same mistake twice on dowgrade news. We're not talking about rational people out there.

December 20, 2007 3:39 PM  
TraderMark said...

It might. It might not. $40 seems more likely than below $40. A lot of uncertainty has been taken out of the story (in my book) - the last time it traded at these levels we did not have the audit cleared, we did not have the Qcell deal, we did not have the earnings detail or guidance. So I can get the same price now, with all those additional pieces of information, and for over 33% off the price a day earlier. Can't complain. If the hordes drop the stock price tomorrow I could not tell you. I rarely catch the top or bottom - I am trying to get the middle of the move. If I told people (as I typed) that it has potential to reach $46 today after hours yesterday they would of laughed at me. So I feel fortunate to get that price, but then again I feel fortunate to buy CROX in the upper $30s when I believe it should be a stock trading in the $50s. Some stocks the market will agree with me right away; others in time; others never. We shall see how LDK performs. I cannot model irrational human behavior so I have to go off charts and fundamentals.

December 20, 2007 4:30 PM  

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