Thursday, June 08, 2017 10:22:58 AM
NGL got a body slam about as hard as they get with yesterday's close just marginally above $12. That is about half of its valuation of just a couple of months ago.
I'm now waiting for ALDW to go through some of that same process wherein it's taken down to unreasonable levels for reasons never to be disclosed.
There's a fundamental flaw in any associated reasoning inasmuch a high frequency trading machines do not need logic. What they do need and possess is money, and lots of money, in addition to plenty of shares/units. They'll sell into the market, putting many units for sale at prices notably lower than the prevailing valuation.
It's been going on with NGL as we've been witnessing. And a board friend asks how we can know a buy-in or add-to price is a smart move.
There's no answer. What I can say, though (and it's what I routinely do) is pick low-hanging fruit that feels like it's a smart move. Of course, it's got to be at a price well below levels at which the stock has been operating for considerable time. So yesterday I added 500 units of NGL at prices beneath $13, well beneath, at that. And when the market opened this morning I had an order in place for 200 NGL at $12.00. It hasn't filled and I don't expect that it will. I'm OK with my 11,500 units.
Now, then---I'm expecting the very same pressure in the ALDW camp. The signs are there---this stock has been showing strong support at the $11 point despite attempts to weaken it. At this very moment you can buy units at $10.80. Given that this pick just paid us 38 cents for the weakest quarter of its year, I figure we could easily be looking at a distribution of 60 cents for the current quarter. If so, then I see a risk-adjusted add-in price of $10.80 less 60 cents or $10.20. That's very nice for a stock now moving into its sweet spot as it approaches the Summer high-drive season beginning next month.
However---if I'm right, then ALDW will drop back to $10 and below. Make no mistake here, I am definitely expecting as much (as little? lol)
This is a nasty game them there computers play. They accomplish it without being dragged down by emotion. We humans are often at a disadvantage. But we don't have to be.
If you agree that ALDW's moment to be dragged down is coming, then hold off adding until you're satisfied that you've saved a lot of money by waiting. I'm sure some of us will be watching this board carefully and help others as we can. Meanwhile, I might just overpay for 200 units of ALDW as that will mean I'm holding 25,000 units. I want that ownership level. But I want others here to understand that our valuation will most likely drop from here. If your interest is in adding a couple of hundred units, then you could certainly go for it as I'm contemplating. If you're thinking in terms of a thousand or more units, then I'd wait a bit. There'll be clues along the way over the next month to six weeks indicating smart moves we might consider.
Meanwhile, I wish you all the very best.
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