The more I look at this company, the more I like it. These latest earnings only served to solidify my excitedness about ENOC, and I am not looking to sell anytime soon. Expenses are moving in the right direction and the raised outlook should raise some buy eyebrows (known as “buybrows” (my word) ) with some big dawgs who are looking to add energy stocks to their portfolio. My only qualm with ENOC is the low volume and the somewhat volatile price moves that it tends produce. (This, of course, isn’t a huge problem as I am in it for the long haul, but it is a bit unsettling to see large price moves based on 200 share lots sold afterhours.)

Stick with your Gut. ENOC to the moon in ’09.

Love always,

TGT

Current Gut Trades:

45   ENOC @ 14.02

100 LLNW @ 4.79

100 NXTM @ 3.33 (This was Call Option that blew up in my face; oops)

30 UNG    @ 16.33

To clarify, The Gut Trader and his two trading associates, G. Kanagekko and Katt Masputis, managed to ride the BAC wave and…bank a few dollars. (Aside from his personal trading, TGT has a group fund, known as the Fund Lovin’ Criminals. We beat the S&P last year, so let me know if you want me to run your money…)

Kanagekko said he had a “hunch” about BAC on Thursday and wanted to pick up some shares if it dropped to 4. Kanagekko has a tendency to get a bit technical for my liking, but when asked to explain his rationale for the BAC hunch he stated that he thought it was either going to zero or a lot higher. Sounded like a Gut Trade to me so I wasn’t going to argue.

BAC hit 4 and we bought. We maxed out the group trading fund and managed to pick up 131 shares at $4 on the nose thanks to the ridiculous volume. Later on that day, at around 2:42 (or 5:42 AM Beijing time for all my Chinese readers), we sold the entire position at $4.90, banking about $117 before fees.

Now, I know what you’re saying. You’re saying, “Gut Trader, why did you sell? BAC is trading at well over $6 and you could be even more of a baller than you are now!” Listen here, young’uns. Gut Trading means both buying and selling on gut. We got in at $4 on gut and I have no problem selling several hours later up more than 18% on gut. You’re not going buy at the bottom and you’re not going to sell at the top. Profit is profit. And if you’re not content with making almost 20% in under 5 hours you better make like Ice Cube and chickity check yourself before your wreck yourself.

Love always,

The Gut Trader

PS – The futures are down 90. TGT is predicting a morning pull back for BAC (and the market in general) followed by some late morning/early afternoon speculative buys hoping for an Obama Stimu-spike. I’ll be buying BAC again if it hits the mid $5s – will you?

You might remember that The Gut Trader (also known by the moniker “TGT”)  bought 40 shares of DRYS at $9.42 last Thursday.   Starting about 6 minutes after my 40 share purchase, DryShips started riding a wave of poor performance which forced me  to sell the entire position that  same day at $8.35, notching a loss of $52.71.  If you clicked through to that Google Finance link you know that good ol’ DRYS is now trading in the $6 range (assuming this Greek shipping company is still afloat by the time you read this). I minimized the damages, but the factors behind this losing trade are forcing me to vent a bit…

The reason I bought DRYS was pure speculation. The one thing I knew about this stock was that over the past 3 months it had been more volatile than Bill O’Reilly.  Dating back to November 21, DryShips had been as low as $3.48, as high as $16.58, and had seen tons of volume at every peak and valley in between. So, when I awoke on Thursday morning of last week to see that DRYS had dropped 30% in pre-market trading, I thought it was primed and ready for a 1-2 point pop.

Here is where I went wrong:

I bought entirely on gut. I felt, in my gut of spontaneous guts, that the volatility this stock had showcased in the past surely indicated a quick, brief recovery that would add much-needed cash to my much-dwindled coffers. The stock dropped for a reason. I saw this news but thought nothing of it. I thought there were other traders like me out there that knew this drop was only temporary. I thought wrong and in my hastiness lost about 13%.

I wanted to get this despicable trade out in the open because I was ashamed and needed some public humiliation to ensure this never, ever happened again.  Even when you are not playing technical factors, certain fundamentals should be taken into account, especially when engaging in short-term trading. News moves stocks. If you aren’t reading and analyzing more than the next trader, your bank roll will soon be showing signs of a post-swim Costanza in the Hamptons. Shrinkage kills portfolios.

Conversely, it looks like the ENOC trade I made a few days ago, up almost 16%, is doing a good job offsetting my DRYS losses. Now if I could only bring myself to sell it…

Until we trade again,

The Gut Trader

Current Gut Trades

Long 19 BAC @ 7.10

Long 35 ENOC @ 10.10

Allow myself to…explain myself.

I love EnerNOC (ENOC). This company is really doing it. In short, they are PAYING companies (like General Mills) to reduce their energy consumption during periods of peak demand. Their revenue comes from utilities and grid operators (Xcel Energy and Southern California Edison, for example) who rely on them to help meet peak demand; this also cuts down on pricey spot-market energy purchases and the need for more power plants.

Do you know any corporation that would refuse payments just to cut down on their energy consumption? To make this even juicier, ENOC offers their energy management software to clients for FREE. Every corporation and SMB should be lining up to take money from these guys!

Sounds, looks and (most-importantly) feels like a winner to me. (There is clearly a lot more to their business model; this, however, is all the info the Gut Trader needs to make his decision.)

At any rate,  the Gut Trader has been watching these guys for some time. They IPO’d at $26/share back in May ’07, had a tasty run to for a few months, peaked just below $50 at the end of ’07  and then promptly plummeted to around $10 over the course of Q1 ‘o8 thanks to some higher than expected growth expenditures.

No big deal. They look to have regrouped and stabilized, hitting expectations and picking up some quality customers over the course of  ’08; ENOC has been riding a nice little upswing since the beginning of Q4 and the Gut Trader has been watching. As of today ENOC is trading right around $11.

Here is where the self-screwing occurs:

A few days ago I was eye-balling some ENOC Sept ’09 $10 call options. They looked good, priced at $1.60. But I got greedy. I told myself to hold off and maybe the price would drop (even though my gut told me that $1.60 was Dirt McGirt cheap for the right to buy ENOC at $10 come September). I passed on the option.

This morning that same Sept ’09 $10 call was going for $2.60.  I could have made a cool hundo in a day. In other words you could have considered me 50.

Alas. Someone else is poppin’ champagne like they won the championship game. If ENOC drops anywhere below $10 again before May,  I will be buying up those calls up like Illini buy Senate Seats.

Stick with your gut.

Love always,

The Gut Trader

Current Gut Trades:

Long 19 BAC @ 7.10

Long 35 ENOC @ 10.10

Long 40 DRYS @ 9.42 ( more on this tomorrow)

Here you will find an open forum on uneducated yet highly passionate trading.

I’ll try to keep everyone up on my current positions (when I can afford positions), as well as other nonsense that will only be read by those who know how truly important my commentary is.

One of the reasons I started this blog is because people are always asking me, “Gut Trader, what is you trading philosophy?” As you can imagine, it’s hard for me to put it into words thanks to the fact that I rely mainly on my gut to pick my stocks.

But, James Dalton sums it up quite well in the following clip:

What Dalton Says Goes

Now that we have that out of the way, here are some things you can look forward to:

1) Me losing money

2) Detailed documentation of my losses

3) The detailed rationale behind why I though what lost me money would make me money

4) Self Deprecation

Stay tuned cuz shit gonna get volatile!

Love Always,

The Gut Trader

Current Gut Trades:

Long 19 BAC @ 7.10

Long 35 ENOC @ 10.10