Anyway, he has a really interesting post on October 9th, 2009 named where is the market heading. Basically he’s saying that where at a point right now where the people who were scared of the market aren’t scared anymore and are starting to invest. This means that the market is at the price that it should be… ie: when we should be looking to sell or when WE are fearful.

It’s really an interesting read. Check it out.

The indicators I used to get out were the 20 day moving average, 50 day moving average and the MACD. I also was watching two versions of the charts the 3-month view and the 1-yr view. I’ve noticed that they provide different information and I like to have as much information as possible. I saw the 20 day moving average break through the price around November 30th, then the 50 day on Dec 3rd / 4th. The MACD was trending downward and hadn’t quite crossed but was about to. Anyway, I sold at $193.

Bought 4 shares @ 129.10 = $516.40 (February 29th, 2008)

Sold 4 shares @ $193.00 = $772

Profit = $255.60

Looking back at the trends over the past 1.5 years (chart below) I noticed that I should have sold my stocks original in July 08. Then I should have waited until March 09 to buy again. This would have been a correct Rule 1 trade, however, I wasn’t following things closely enough and missed out. This teaches a good lesson that watching the stocks does only take 15 minutes per day and you can profit greatly if you know what you’re looking for.

I am now in search of another set of companies to purchase. However, as my Rule 1 knowledge is a bit foggy I am going to re-read the book and refresh my knowledge so that I’m ready for my next set of winning trades!

I should have already been out!

Looking at the signals of the stock (which I’ve included below) I can see that the MACD says less people are buying then selling on Sept 28th, 2009 (according to Google) and October 16th (according to Yahoo). Then on October 16th the 50 day moving average cuts above the stock price. Those are the two indicators that I’ve been using and really like their pattern. And based on those signals I should have got out on the 16th or 19th of October for around $7.57 for a profit of $41.75. (woulda, shoulda, coulda doesn’t get you very far in the stock market though!)

That all being said, why am I still in Cold Water Creek (CWTR)? Good question. Mainly because I wasn’t monitoring my share / companies properly. It only takes 15 minutes a day which is completely true but I just stopped monitoring. Lesson learned and luckily it’s only a $41.75 lesson (so far). I will onto my stocks for now and wait to see what happens. Now I’m going to be monitoring my AAPL stocks so I don’t make the same mistake twice!

I will start updating the site again as I have a feeling I’m going to be selling this position soon and will be looking for more companies to buy into soon.  I’ll keep everyone updated with my progress.

Now I’m back to posting.   Interestingly enough I’ve actually missed quite a bit while I was gone.  This ranges from apple’s stock going up (and a bit back down), acceleware’s stock moving to $1.00 (and back down) and coldwater creek’s stock taking a little rollercoaster.

Anyway, I’ll try and provide at least a ‘tri’ weekly post on this blog.  So without further ado we’ll have blog posts here eventually.

So I put in a limit order at $129.10 and left for work. Got to work and checked to see if it went through and noticed that the price had dropped to 127, doh! oh well!


To summarize my stock purchase. I bought 4 shares (yes, 4 it’s a pathetic number and the broker fees will eat a big chunk out of any profit I make. As a trade a day states, it’s a learning experience and let’s call it “tuition.” )

• 4 shares of AAPL at $129.10 = $516.40

As always I’ll be watching the technical indicators to see when to get back out. Let’s hope that those iPhone 8GB sell good in the next year.

As we know I’m a huge fan of Apple and the company in general as I discussed after the big Apple stock drop. I think they have everything that qualifies as a “bang on” Rule #1 Company. In fact, I think if Phil Town was rewriting Rule One he’d consider adding Apple as a example Rule One Company.

Anyway, I’ve been keeping my eye on this stock since I started trading. The stock price was either above the Margin of Safety ( back in December 2007) or the technical indicators were telling me to stay out (during the stock drop). Well, luckily for me there was a stock price drop and after the announcement today looks like the stock price could be back on the rise. Check out the image below.

The technical indicators tell us two important things

1. The Stock Price is just moving through the 30-day moving average
2. The MACD buy line is above the sell line and the average number of buyers is larger then the number of sellers.

So is the stock going to make a HUGE increase like before? Nobody can tell you that 100%. However, with consistent growth rates over the previous 9 years and incredibly good Return on Investment Capital it wouldn’t’ be a bad bet. I have a sticker price of over $200 so I see this as a steal of a deal!

“We’ve been saying for several quarters now that domestic business will be weak until at least late in 2008,” Nichols said. “From what we have seen in the retail environment as of late and order indications, that expectation needs to be extended until 2009.”

He goes on to state that the dramatic decrease in sales is directly related to domestic growth. And a small glimmer of hope can be seen in the international market which had an increase in sales.

“Worldwide revenue and backlog are down overall on continued weakness in the domestic market, while international revenue is up albeit at a slower pace in the fourth quarter than we experienced earlier in the year.”

Anyway, it looks like KSWS has had a tough year. I’m still going to keep my eye on this stock. I don’t expect to purchase anything till the market strengthens.

It’s an interesting point to consider as a Rule One Investor. If the company did worse then last year in the fourth quarter what does that mean?

Well, obviously we need the whole year and the previous 9 years to make an appropriate statement. However, this does show that the growth rate is probably falling. A decreasing growth rate is not something that a rule one investor wants to be concerned with. It makes the business less predictable.

Does it matter that the stock price actually increased? No! It would matter if we were buying or selling the stock, however, I don’t have a position in the stock as discussed when I was selling my Lowes (LOW) stock. The price increase is simply a reajustment because of the undervaluation of the stock.

I am waiting to see the annual report to recalculate the Rule #1 numbers and see if Lowes still qualifies as a rule one stock.

What is KSwiss?

Kswiss is a company that designs, develops and markets high performance footwear and apparel. As well, they market and design casual footwear. Which is how I know KSwiss. I know KSwiss from products like the shoe to the right.

Who are the consumers?

From the company description it looks like the consumers are sports fanatics and the modern teenager to young adult. As we know these people are large consumers.
Where can I buy KSwiss?

I like to do is determine where people can actually buy the product. I find that this is especially useful for retail stocks. If you can’t get a specific brand at certain stores / locations then this shows some sort of block in the moat or management. Looking online you can buy KSwiss from Foot Locker and Eastbay.com. On ebay there are over 300 items when searching for KSwiss

How’s the Management?

This is always the toughest question. However, if we look at the annual report from 2007 we can see that the CEO seems like a straight shooter.

The athletic footwear industry is highly competitive. There are several marketers of footwear larger than us, including Nike and adidas. Each of these companies has substantially greater financial, distribution and marketing resources as well as greater brand awareness than us.

We have increased our emphasis on product lines beyond our Classic model. In the past, we have introduced products in such highly competitive categories as court, boating, outdoor and children’s shoes. See “Products.” There can be no assurance that we will penetrate these or other new markets or increase the market share we have established to date.

The principal elements of competition in the athletic footwear market include brand awareness, product quality, design, pricing, fashion appeal, marketing, distribution, performance and brand positioning. Our products compete primarily on the basis of technological innovations, quality, style, and brand awareness among consumers. While we believe that our competitive strategy has resulted in increased brand awareness and market share, there can be no assurance that we will be able to retain or increase our market share or respond to changing consumer preferences.

 

Those are the sort of remarks that I can relate to meaning, “we can’t be assured that we’re doing these things, however, we believe this approach might work.”

What about the CEO, Steven Nichols?

Well, Mr. Nichols seems like our kind of player. He’s been on the board since 1987. He also holds a LARGE amount of stocks, over 70% of the voting power stocks. In addition, he only took 1 million as compensation for his work on the board.

Finally, KSwiss has a conference call on Tuesday to report the fourth quarter earnings of 2007. This should give us a great idea of the outlook for 2008. Furthermore, it’ll show us what kind of management we have. I’ll be sure to watch carefully on Tuesday.