RYI: A Lesson in Liquidity

Loss: -$84.67
-1.6% return    Sold 710 shares of Ryerson Holding Corp. (RYI) at $7.13/share.

I realized I’ve been using Conditional Market Orders instead of Limit Orders every trade. I also learned how crazy bid/ask spreads can get on stocks.

RYI_May_08_2015

The price of RYI was at $7.10/share. I set a conditional market order to buy RYI if it moved above $7.11/share; Scottrade bought my shares at $7.2290. The price moved up to $7.25/share. I then set another conditional order to sell if the price moved below $7.24/share. Scottrade sold mine at $7.1297/share.

A ten cent loss translated to a $85 loss and I’ve learned my lesson. The thin volume being traded on Ryerson pushed the bid/ask spread to a 15 cent gap at one point today.

The ScottStocks portfolio gained $500 today, so I took a risk and lost on RYI. I’m taking it easy and not chasing the $85 because there’s a good possibility I’ll lose more.

Sell: BPT at $69.96

Profit: $97.37
2% return    Sold 70 shares of BP Prudhoe Bay Royalty Trust (BPT) at $69.96/share.

I’m taking it easy on BPT and getting out for now; it looks like I’ll be able to buy in at a lower price in a couple weeks. It hurts going from a $500 unrealized profit to nearly breaking even (without the $69 dividend), but WTI is moving this stock quickly downward…again.

BPT_May_7_2015

The price of WTI has gone from $62/barrel to $59 this week. If oil begins moving down again, all my energy stock picks will be hurt: BPT , SBR , NOV , MDR. I’m countering this potential problem with LUV; which is up 3% today.

100th Post Review

To celebrate the 100th ScottStocks blog post, I’d like to share some thoughts on the current state of the economy.

Yellen continues to ZIRP our economy into a happy dream world where bubbles and recessions don’t exist. Occasionally raising rates .01% would have helped the inevatible problem Yellen’s monetary policy will create. I wonder if she’s crazy enough to implement NIRP.

The economic effect of low oil prices is still unclear. The past few months in Houston have seen a depreciation in home values, stemming from decreased demand; which I’m guessing is the result of layoffs in the energy industry.

The fundamental life-force of any country’s economy is derived from the natural resources taken from the Earth. Oil is one of the most important resource we can pull out of the ground. Considering its importance and how 8 out of the top 10 largest companies in the world are Oil and Gas related, I can assume low oil prices will have a negative impact on the economy.

I think the perfect storm could be brewing if oil prices remain low and contribute to an economic slowdown this year. A guaranteed crisis would be created if the Fed raises rates, but I don’t see Yellen taking that action. I can see a rate raise happening as soon as Obama’s term is up.

Buy: IRWD at $14.85

Purchased 340 shares of Ironwood Pharmaceuticals (IRWD) at $14.85/share. Total cost: $5,056.95.

I’ve been watching IRWD closely since the start of the year. As soon as the market opened this morning I bought in…at $0.20 higher than planned. Lost $100 a couple seconds after clicking buy, then down $300 within the hour. But this is how IRWD works (especially when a limit order isn’t used). I’m expecting this extremely volatile stock to hit $15/share tomorrow, then I’m out.
IRWD_April_28_2015

Sell: JNS at $18.52

Profit: $113.07
3.8% return    Sold 167 shares of Janus Capital. (JNS) at $18.52/share.

The JNS risk was worth it. Good earnings and the price jumped more than expected. I planned on selling if it hit $18.20 , a +$.30 cent gain. But it moved on up +$.75 and I got out at +$.60.

JNS_April_23_2015

I’m looking at possibly selling LUV and getting in at a better price point. Currently losing $50 even after steep gains this week.

I also sold BAC today and made an insignificant $3.

 

Lots of Buying Today

Several of my stock picks look like they’re on the upswing, so I bought today…

125 shares of RAD @ $8.08
65 shares of BAC @ $15.66
56 shares of JNS @ $17.71
111 shares of JNS @ $17.91

Janus releases quarterly earnings tomorrow; I’m expecting a good quarter. Gained $70 with today’s new purchases; I plan on selling BAC and JNS within the next week. The rest of the ScottStocks portfolio gained $160 with BPT leading the way.

April_22_2015_stock_picks_RAD_JNS_BAC

GE’s Financial Services

There was definitely a delayed reaction to GE’s news yesterday. Up nearly 10% this morning and quickly approaching $28/share after announcing a $30 billion sale of its real estate portfolio and $50 billion share buyback plan; one of the largest buybacks ever (Apple announced a $50 billion buyback in 2013). I was a little late buying yesterday, but the party was just getting started.

GE Stock April 9 and 10 2015

The last time GE hit $28/share was December 2013 and there hasn’t been significant movement since then. A moment like this is long awaited. Now when is the next increase in dividend payout?

GE stock 2015