2014 Brief review

Work related accounts without much choice: 9.62% and 9.98%.  Annuity unknown, likely a little less due to fees.

Personal accounts managed returned >14.1%.  SP500 was 11.4% this year.  These accounts at times were down 30%, similar to years past where TSLA stock and options were underwater before being profitable.  I don't think I traded emotionally in and out of anything.  The year was really quite boring except for the odd breakout hopes.

Plans for 2015 remain the same. Fund Roths and 401Ks. Stick to trading plan.  Enjoy life. Dance and play the banjo. Consider retirement this or coming years.

I've beat the market 3 years in a row!  Will I return to mean?

Retail vaccine costs have risen

Good article  http://www.nytimes.com/2014/07/03/health/Vaccine-Costs-Soaring-Paying-Till-It-Hurts.html?_r=1

Sponsorship

In order from largest of my holdings to smallest: 62.78%, 55.14%, and 75.8%.

Some thoughts on having an edge

Driving down the road I was pondering having an edge in the markets.  I've seen some discussions on the net about a trading edge, how it is needed.  Many involved in the market seem to want a fast buck on a fast trade.  They seek out an edge to turn this profit, exploiting some weakness or vulnerability.  These edges seem to come from many angles:
superior technology such as HFT frontrunning
pattern analysis
fundamental analysis
trading based upon indicators of which there are many
a feel/intuition/gut
cutting losses and riding winners
trend trading
and I suspect the list gets ever more complicated

What is my edge?  To begin with I accept the short term trading is unprofitable, unhealthy, and/or very difficult.  Then, factor in that I do not need the money so pressure is very low.  The big factor in my edge is that is does not disappear or change over time.  Any regular short term edge will be found and used such that it disappears.  My edge is patience.  My edge is that great growth companies grow and change the world.  Having an IPO to grow the business makes sense (kind of like hey gang we have this great idea but need money to get it off the ground).  My edge comes in learning about the management of a company over time, learning the business plan.  My edge is not (for the most part) succumbing to emotion.  My edge comes from following FIDO and perhaps Lord Abbott.  My edge comes from not investing in what I can't understand.  My edge comes from reading everything about a company (how many retail investors have read an S-1?).  My edge comes from leaning into mistakes, learning from them.  My edge comes from an investing plan and regularly reviewing IPOs.  My edge comes from knowing that the market is not fair, we can't all win, knowing it is zero sum.  My edge comes from trying to know who is on the other side of the trade.  My edge comes from critical analysis of others and trying my best to trust nobody.  My edge comes from focusing on results, not creative writing.

My edge comes from wanting it more and working harder.

Can the tea leaves be read?

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GPRO and comments regarding ibankcoin

So I had not written up a report on GPRO but I'd read enough on the company to know that there was too much I not wrap my head around for me to come up with a future valuation.  The founder of the company was selling a lot of shares at the secondary.  The site is modern with lots of fancy videos.  They are permeating the market such that stories are written in the New Yorker on how vacations get ruined when someone misses their shot.  Perhaps I am too old to understand future growth and I find little of value in what their products offer to the planet.

As a foolish freshman in the market I read many market related sites searching for meaning and hot tips.  I made many trades based upon some whiff of smoke that reached my emotional brain causing click click mouse reactions.  I took up any offer of free trials to paid sites and frequently ended up subscribing.  The end result for me extreme highs and lows of emotional states and account balances.  I adapted and changed and now approach the market with at least some sophomoric sensibility.

I still go back and look at old sites of value.  One of those is ibankcoin.  ibankcoin is a site that offers commentary on the markets, supposedly from someone that has been around a while.  There also seems to be paid and volunteer writers and paid subscription services with hot tips, screeners, and overbought/oversold indicators.  Following them for a while it is amazing to see how poorly the main person trades, how poor the rationale for some of his trades are, and how poor his results have been.  They offered an educational seminar but the proprietor remained anonymous.  How the heck do people pay someone that won't show his face, has a losing track record, is a poor trader, and whose main interest running the site seems to be the recurring revenue stream?

To be fair, there are many in the market that offer paid services that I would critique similarly.  Dan Zanger had some great years with audited results from many years ago, still sells monthly products.  He does list "past winners" but not any losers or actual results.  Brian Shannon has a great book on the market, sells actionable ideas via a service, but does not share performance data.  Charles Kirk of the Kirk report is similar, he used to show performance data (it struck me then as sub par), he used to show actual trades (infrequent and cautious) but he does not share data now.

My advice to those that are green in the market, be wary of what you do with your money.  The wolves are out there.  Study what works.  Become an old rich person by living below your means, save as much as possible, put a large portion of your market funds in low cost index funds.  If you want to play the market with individual stocks find out what works for you.

Number 27

http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/TMT_us_tmt/us_tmt_Fast500_2014_ranking_111114.pdf

Mini report MCUR

They have a unique product that is certainly needed.  There are several things that concern me at this point:  low volume, little sponsorship, and mainly that the market is limited to very specific issues.  Because of the limited market it no longer appeals to me.  I've seen other stocks I passed on do well, perhaps this one will also.

Research report MBLY

The big concern I have with MBLY is the awareness that it has been a hot issue for a number of months, lots of new money attracted to it, all the chart monkeys and trend followers.  So I enter this research stage with some reticence.  I wonder if the attraction to this new issue has been ignorant hope.

Clearly the product is a game changer for the driving world.  Tesla is using them as are every other major company.  They win 80% of the jobs they bid on, appear to have first mover advantage.  The founders are still with the company and own a good bit of stock.  They have great growth prospects especially if they can work out the algorithms for future driver less technology.  They stand to make money off of every car built each year with products in limited models at present.

Real world example:  I tested a Honda Accord Hybrid with all the bells and whistles.  Lane departure warnings were nice on major roads.  Front camera/radar device did not work, it dropped off the car.  I viewed that malfunction as a Honda assembly or salesman issue.  Tesla video showing new features also very interesting.  The safety features in modern cars are exactly what will save distracted drivers such as myself.

I think BASM checks out.

My concerns:  The S-1 mentions immediate dilution of >$23 from the $25 IPO price.  GS major owner with conflict of interest.  IPO purpose number one is "liquidity for existing shareholders".  I get a sense they were doing just fine turning the corner of profitability and wanted to provide a cash out point for early investors.  They did not access the capital markets to grow the business.

The business is growing.  This is likely a good company to invest and own for the future.  I will wait for post IPO phase excitement to settle down and then work on some growth projections if I can wrap my mind around them.

Research report ZOES

Zoes kitchen is a young fast growing restaurant concept.  They prepare fresh food only and do not fry or nuke anything.  They indicated many strengths in their S-1.  70% shoppers are women whose household incomes exceed 100K.  60% lunch, 17% catering.  I would not be good to evaluate real estate team, but site selection is key, they have experienced people in house and have standards for real estate brokers to submit properties for consideration.  750K to open a restauarant, 3yr CAGR 30%.  122 locations now, they predict they can have in excess of 1600 in the future, opening about 30 new spots this year.  If they grown at this rate 1600 is a long time away, I would like to see them over time increase the number of stores opened per year.  They regularly train new managers at multiple locations.  Experienced management team has grown them from 20 stores.

BASM check

I plan on following this company.  I plan on buying some shares and holding for as long as they execute.  Difficult to come up with a target price, but based upon current price and future number of stores, I expect 13 x current price is possible in the future ($455).

Ownership data that exists suggests not so many funds are in at present though I do see Lord Abbott, an early owner in Tesla.  Fido seems to be buying.

Market cap 637million on 16 weeks sales of 46 million.

Attached is map of local location along two major roads.  It is an odd location in that it is difficult to see from either of the roads.  The one time I've been there it was crowded, I walked by this week and it was crowded.  I hope the real estate teams choose locations with better visibility in the future.

IPO research

This is the first round, not very detailed.  More later as I read from company data.  Seven months of IPOs reviewed, glancing at company profile via finance sites.  I screen according to things I have talked about here before: chance for explosive growth in new market, strong leadership, proper use of my money to develop business, and sleepy factor (can I sleep through losses).  Two companies peak my interest, one is large enough to consider now, the other is very small.  Two others peak my interest as game changers, not sure I can wrap my head around the entire business, will have to see.   They happen to be two that have made waves prior to my research.

1.  ZOES  I've enjoyed the food.  15 states, like 125 stores.  There has got to be room for more.  If I can read company data and understand a master plan it is a buy.

2.  MCUR Risky small Israeli would product company in stage 3 trials.  Unmet need for relatively small market, if the stuff works it could do well.

3/4.  MBLY and GPRO

Cross?

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The best of this Blog

So basically this blog has been a collection of crap as I have gone thru it.  At times I have fancied myself as a writer providing original content for the masses yet I do not organize things well, dont have web skills, and frankly don't care much about others that want to be spoon fed.  Somehow though this blog started getting a lot more internet traffic so I thought to do a little spoon feeding.  Going back thru late 2010 I find the following to provide the best value, originality, ideas, truisms, or insight into what I do in the markets.

11/17/10   http://4nursebee.blogspot.com/2010/11/good-reads.html
10/16/10 http://4nursebee.blogspot.com/2010/10/trading-update-and-randome-thoughts.html
10/26/10  http://4nursebee.blogspot.com/2010/10/psychology-note.html
12/29/10  AWESOME  http://4nursebee.blogspot.com/2010/12/volume-weighted-average-price-vwap.html
1/3/11  http://4nursebee.blogspot.com/2011/01/2010-year-in-review-and-reflections.html
2/7/11  http://4nursebee.blogspot.com/2011/02/risk-management.html
8/5/11  http://4nursebee.blogspot.com/2011/08/big-money.html    Best investment book ever
5/9/12 http://4nursebee.blogspot.com/2012/05/how-i-think-of-things.html
9/6/12  http://4nursebee.blogspot.com/2012/09/i-made-some-changes.html   I bet you don't know Jack!
11/6/12 http://4nursebee.blogspot.com/2012/11/this-market-is-nuts.html 
5/21/13  http://4nursebee.blogspot.com/2013/05/traffic-over-profits.html
6/23/13 http://4nursebee.blogspot.com/2013/06/electric-cars-and-book.html  Stiill the best book

June 12, 2014 Novavax Shareholders meeting

For reactions from last years meeting see here: http://4nursebee.blogspot.com/2013/06/novavax-shareholder-meeting.html

Comments from someone else that published them online:

Take aways from the shareholders' meeting
Hi folks. These are from my notes taken during the shareholders' meeting. Unfortunately, I arrive a little late and missed the first 40 minutes, but here are my basic observations:
1) Erck noted the desire to stay independent and promote steady development.
2) There was some discussion of hiring in some people to manage distribution issues in the future. Erck noted that the CDC and ASIC often support some contracting facilitation (I think this is what this amounted to) to promote distribution in the future. No need for a large in-house salesforce (at least not yet).
3) MERS was discussed, the publication regarding NVAX data published (as is known) and simply noted the company's ability to produce, quickly, a viable vaccine candidate.
4) 10 milestone development projects were displayed involving various vaccine indications and there timetables for phase study results. Erck noted that the strategy was to seek earlier approvals via acceleration of development and phase study results.
5) They plan on hiring a Director of Investor Relations and adding 'manufacturing associates' who can management, direct, research manufacturing capabilities. Quality control and Quality assurance specialists may also be sought.
6) The maintain a mix of Intellectual property including patents and trade-secrets. Erck also noted the high barriers to entry in this field.
7) Mention of either on-going or prospective trials in India --- data to be reported in the near future. Some possibility of a MERS manufacturing capability in India could also be envisioned.

Wish I had gotten there earlier --- evidently some discussion of the dilution occurred. Was surprised that only 24 people were in the room. The meeting was then followed by a directors' meeting. Wish I was a fly on the wall at that point.

Erck struck me as very knowledgeable, capable and reasonable person with a reasonable view to the future. Less


Now for my thoughts

Wow what a change from last year. I am not sure the time of day that I had driven around the two campuses last year but this year I saw a lot more cars around 0900 compared to what I saw last year. At the campus where the meeting was held I saw stereotypical lab looking folks coming to work. During the meeting they were making a lot of noise upstairs working on building out additional lab space. Outside the meeting there was a room with Dr Glenn seeming to have some kind of a meeting.

ACIP drives recommendations for vaccinations. They are putting in the networking such that ACIP will suggest RSV vaccine should it be approved. This would eliminate a lot of salesforce development concerns, otherwise they could find some willing partners established in the business. It sounds like they are putting in the PR related staff needed to move forward.

Cash runway confident through 2016 with additional funded trials. 10% dilution at most needed for further trials.

Current employees are working at what needs to be done to grow Novavax. They have reached "critical mass". More people being hired and interviewed.

RSV stage 3 trials maybe 2015. Businessman and lawyer holding CEO back from pushing too much too soon. Lawyer looked anxious.

Staying it alone allows them to move faster.

India holds additional GMP manufacturing should US not be able to handle anything in future. Rabies and two other stage one trials underway. Indian FDA tougher than US.

BARDA approached Erck to talk about MERS. They "cloned" the MERS virus to work on it in the lab.

Journal of Vaccines mentioned. I need to read it.

They have a "critical mass" of staff.

In my opinion, having Ernst and Young adds legitimacy.

They have 2 (maybe 3) GMP labs.

Genocea partnership for HSV using Matrix M from Iscanova. Some revenue flow possible.

Growth comps mentioned from previous companies others worked for in the past were 15B market cap and 22B market cap. Someone asked to justify additional stock purchases. Erck rightly said determine future value, subtract for years to get there along along with theta to arrive at current pricing. So my simple math says 15 x current price minimum is there thought, so 15 x $4 = $60 future share price. Subtract 20 % for four years to get there for my back of cuff valuation is $24.57 now. As each trial gets done, the confidence in these numbers grows.

Novavax is set in the heart of Biotech pharmaceuticals on the east coast. They are a real company, have leadership doing what needs to be done to get RSV and other vaccines to market.

My oh my, Get down with VLP

the pic:  Click for larger

The last time a pic was posted, note the price:   https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzH4BwsRUzfeW08fK0MjKF3LxR1bTZMbqt8ecqs3vhwuZs3k3wwkudpoYvcwFd0ZK8H4TGaXs59AK8iM1DOgo3zHcr8cE6aIS_G3y2O0elg3wuhxwpiN5vECUDdr_nzrERXkcfCjdFiULY/s1600/tands.JPG


Now, what you gonna do?

Finish the job

There are a few paths I could travel from here.  I hope the path of the emotional degenerate trader is not an option that happens.  I've had some measure of success and could likely quit the game now.  It is tempting to just buy some kind of lower risk vehicle ( dividend, CDs, SP Index) and live a comfortable life.  I might still choose this route.  It would be good and honorable to do so.

The problem is that the decent average retirement is not my goal.  My SO in life wants to travel first class.  I'd like to help build libraries or the modern day equivalent.  I'd like to spend more time and money beautifying my corner of the earth through flowers, landscaping, and better organizing, perhaps hiring a gardener.  I want to bike the country.  I'd like to help educate.

Throughout my life I've been a great starter.  OCD to the max for any new endeavor.  This can go on for years, but many interests end up not captivating me as easily.  My background is one of frequently not finishing tasks, hobbies, education, relationships, etc..  I want this trading gig to not become another has been.  I want to see this through to the best conclusion.

I've been given some talents and do not want to bury them, I want to multiply them.

Nearly Sublime Pump and Dump NNVC

Wow, interesting to watch it unfold.  Here is the story:

I am always in search of the next great stock and want to follow winners in the market.  One day on a public message board I came across a poster that claimed to have made millions in the market over many years.  I was able to send him a message, heard back from him after a while.  He seemed very open to talking, sent me his email address, his real address, and his phone number.  He encouraged me to call:

Beetlemorse@aol.com	Jan 9
to me

My sincere apologies!  I just discovered your message on InvestorVillage and would love to chat about how I have made millions over a 50 year career. I am a "snowbird" from Maine, currently living in our Florida home. My phone number in Florida is 352-835-7258.  Call between 6 and 8 PM any night and leave a message if we're out to dinner. 

 

Look forward to getting to know you. 

 

Dave Morse

2346 Fairskies Drive

Spring Hill, FL 34606

 

beetlemorse@aol.com.

I wrote back to him and got the following reply: 

 I can't wait to chat.  You will find my approach to investing exactly opposite to the mainstream, but.....it works.  For openers, let me state that I have always only invested in ONE stock at a time.  Incredible, isn't it!

 

My only account (held at Vanguard, with a twinkle, since they would find this approach anathema) is a Roth IRA that only holds two stocks:  550,000 NVAX and 100,000 NNVC.  Why 2 stocks?  Because in the last month I made over $1 million in NVAX and decided to "seed" my next holding when NVAX gets bought out for over $20 per share, which I expect to happen THIS YEAR!

 

That's all for now.  However, two points:  don't call me sir, I'm Dave;  and keep all our conversations in the strictest confidence.  In fact, one of my tenets when teaching others is that you should only discuss your portfolio with family and your closest friends!  To do otherwise only elicits jealousy or ridicule depending on how that investment performs.  Got it!

 

Dave

This seemed of interest still, though this microcap NNVC seemed odd.  I'd called and missed him and decided to ask him some simple questions directly:

Mr. Morse,

So how have you made millions in the market?

What did you invest in and why?

What is your story?

WHAT CAME NEXT REALLY PUT MY BS DETECTOR UP, a group email seemingly touting this microcap without any real research, just seemingly supporting evidence.  I hate group emails, folks, you gotta do this with BCC function to control spambots.  Ok, the email as follows: 

Beetlemorse@aol.com	Jan 10
to mudhillmashers., Morse, jesssprowl, PATRICK_MCSHAN., sproulgirls, cookegd, Maryjnpaul, gotekgo, french.laura, info, stjohnsinhp35, me

I have been very quiet this week in chatting with you.  The reason is that I have sold some of my NVAX to establish a meaningful "seed" holding in NNVC and to replenish our checking account at USAA.  I now have two holdings in a ratio of 82%/18%:  NVAX and NNVC respectively.  Since I fully expect NVAX will be acquired this year I thought it wise to add NNVC now because it is completely undiscovered by the elephants (institutions) and yet it's potential is nothing short of amazing. At some point some news event or article about their platform technology of creating nanomaterials for viral therapy will explode this stock. With only 50 million shares outstanding (36 million in the "float") it is truly a microcap and EXTREMELY HARD FOR ELEPHANTS TO ESTABLISH A MEANINGFUL POSITION. BUT THEY WILL!!!!!!

 

Please, all of you, start your DD (due diligence) ASAP and establish a small position, or at least monitor the price until you have the ability to do so. I wouldn't know where to begin in describing this company, so I will tantalize you with the following quotes:

 

1. From Prof. Milton Boniuk, M.D., the first investor in the company and board member:  "Dr. Diwan explained to me how it would be possible to create a novel drug against a previously unknown virus in a matter of weeks.  He did just that against MERS Coronavirus in just a few weeks."

 

2. From S_Colton (Message 493 on InvestorVillage):  "This drug approach is revolutionary with a great safety profile and dramatic consistent results in over 5000 animal tests".

 

3. From Dr. Seymour, President, in an email to a shareholder on 8-20-2013:  "No one can compete with us, either on price or effectiveness".

 

4. From Zincfinger on 12-2-2013 on InvestorVillage:  "This stock has one of the best risk-reward ratios I've ever seen".  Commenting on the toxicology data on FluCide, the lead drug candidate:  "Tox was indistinguishable from zero; FluCide will pass clinical trials (in humans)".

 

Dad/Dave

I do a little bit more work reading the company and reply back to everyone:

4nursebee .	Jan 10
to Beetlemorse, mudhillmashers., Morse, jesssprowl, PATRICK_MCSHAN., sproulgirls, cookegd, Maryjnpaul, gotekgo, french.laura, info, stjohnsinhp35

NNVC= horseshit.  Is this pump and dump sublimely done?

No mutual fund ownership, certainly not the quality of Fidelity.

Pipeline=nothing unique

CEO selling shares, NVAX insiders accumulating.

I am a nurse with degree in chemistry.

They have nothing to sell and NO products in trials.

My due diligence done,

4nursebee.blogspot.com

Mr. Morse cuts all communications with me, acts offended, condescending perhaps.

I also checked google maps for where the company HQ was, some run down looking building that struck me as a place to get mail for pseudo shell corporations.

Be careful in the market, there are many wolves in the arena.  Price has only come down and bigtime this am.

RNB

Relative strength

Click image for larger

I hope this don't go

News

Intraday, my first 6 figure day!  Steak for dinner!
Gonna order that Tesla soon, might get an X

I think it will hold.

My Hovel of a blog

I am not an internet web programmer.  I am Joe Retail, searching for the next great growth story.  My investing and trading has been shaped by fire and brimstone, the shadows of death, multiple cycles of mania and depression.  I believe in the following:
Day traders lose money en masse.
Buy and hold in low cost index funds ala Bogleheads is best for the masses.
This truth is boring, it does not sell internet traffic well.
Returns in excess of the norms require honest reflection, thought, and research.
Most retail participants to not know what they want and do not know what to do to get what they ought to want.
There is so much to choose from in the market that investors need to know everything possible about a company.

What you need to do:
Decide on what you really want.
Plan the actions that will best get you there.
Execute.
Evaluate.
Adapt.

Let compound interest be your friend (don't lose your shirt)