Market Talk with Piranha is currently moving to its new home at chrisperruna.com. The new site is up and running but many of the posts need editing as the images and stock charts did not transfer successfully (thanks blogger). I will post all new entries to both blogs – Thank you for your patience while I make this change!

Sunday, January 23, 2005

Talking Heads in Action

...Do you really want to listen to the talking heads on TV?
I have preached that these firms are only looking out for their best interests, not yours. They don't care about anything but your money; they never look out for the small investor!

Look at how these major firms kept sending out buy signals based purely on fundamental analysis. If they looked at the charts, they would have noticed several breakdowns among every type of chart available. It didn’t matter what chart you viewed, they all had red flags in every direction you could have looked. NGPS was hot in 2004 but I started posting red flags the minute I saw them on the charts. Guess what, that stock that was up over 300% in 2004 is now down about 50%! I bet we see at least one firm reiterate a “buy or hold” on NGPS in the coming weeks.

This is a condensed summary of the case study I posted today based from the Dorsey Wright analysis of the Enron collapse (all research was performed by Dorsey Wright- www.dorseywright.com) I have no affiliation with Dorsey Wright:

ENE - Enron

Merrill Lynch:
March 21, 2001: $55.89 Reiterated Near-term “Buy” at Merrill
April 17, 2001: $60.00 Reiterated Near-Term “Buy” at Merrill
August 15, 2001: $40.25 Cut to Near-Term “Neutral” at Merrill
Oct 9, 2001: $33.39 Raised to Long-term “Buy” at Merrill Lynch
Oct 16, 2001: $32.84 Raised to Near-term “Accumulate” at Merrill Lynch
Nov 1, 2001: $11.99 Cut to Near-Term “Neutral” at Merrill
(finally cut after 79% loss – not cut to sell)

Banc of America:
August 15, 2001: $40.25 Reiterated “Strong Buy” at Banc of America
August 28, 2001: $38.16 Reiterated “Strong Buy” at Banc of America
Oct 25, 2001: $16.35 Cut to “Market Perform” at Banc of America
(finally cut after 59% loss – still market perform)

Commerzbank:
March 14, 2001: $62.75 Raised to “Accumulate” at Commerzbank
March 22, 2001: $55.02 Reiterated “Accumulate” at Commerzbank Capital
April 18, 2001: $61.62 Reiterated “Accumulate” at Commerzbank Capital
Nov 9, 2001: $ 8.63 Cut to “Hold” at Commerzbank
Nov 28, 2001: $ .61 Cut to “Sell” at Commerzbank Capital
(finally cut to “SELL” after 99% loss)

Lehman:
March 12, 2001: $61.27 Reiterated “Strong Buy” at Lehman
Oct 24, 2001: $16.41 Reiterated “Strong Buy” at Lehman; “the stock is
attractively priced)
(still a strong buy after 73% loss)

The Lesson: Use both Fundamental and Technical Analysis!
And always cut your losers, no matter what anybody says!
Piranha

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