Can you eat 10 Pizzas at once?

Well maybe you can but most people can’t eat 10 pizzas in one seating. The reason for this is simple, we simply can not ‘digest’ all that food at once. What happens next, we get sick, ‘fall down’ and wait for the paramedics to come and rescue us…

Parabolic stock movements are no different. They can be compared to eating 2, 5 or even 10 pizzas at once. What happens next is quite obvious most of the time. They get ‘stuffed’ and can not digest all that activity. They most likely to start falling as early as mid afternoon session. And the next day they continue to be sick. Amazingly when they recover, they might ask for more Pizza (not uncommon to see the stock to go for half a parabolic move or upwards trend from day 3 or day 4 but eventually fades off again in a week or two).

New traders – Study parabolic moves and specifically study all the charts associated with those moves to get yourself familiar with the given stock, how it behaves, what it likes to do, price action in certain times and what was the reason behind the move itself, etc.

Patience and trade size is the key in these type of plays….think about it before going in to the trade.. What is your plan & what to do if it goes against you and more importantly  when to exit…

So when you see the fat boy on the block next time, you know what to do.

I hope it helps.

MT

 

WNDW – Why I am short (SolarWindow Technologies)

Who are SolarWindow Technologies Inc.?

If you are around long enough, you would know that SolarWindow used to be called New Energy Technologies and traded with the ticker NENE.

The company has absolutely ZERO revenues, employs only 3 people with 26.3M shares outstanding (10.3M shares currently floating) with zero institutional holdings and 44% insider holdings.

With the current price ($3.24), the company has over $85M market cap! You haven’t read it wrong…

Checking their filings, the company is currently in a complete financial mess. As Penny Stock Realist, a respected Seeking Alpha contributor, recently pointed out that, their latest 10-Q filing includes the following admission from the company:

“The Company does not have any commercialized products and has not generated any revenue since inception. The Company has an accumulated deficit of $27.290,828 as of May 31, 2015 and does not have positive cash flow from operating activities.

As of May 31, 2015 the Company had cash of $69.169. Subsequent to its quarter end, the Company received $765,156 from the exercise of Series H Warrants. Based upon its current and near term anticipated level of operations and expenditures, the Company believes that cash on hand should be sufficient to enable it to continue operations through October, 2015.”

Why WNDW price is going up lately?

WNDW is currently involved in a Paid Promotion. This simply means that company is paying some stock media company to produce exciting (and not necessarily correct) promotion material online (and in some cases offline) to get unsuspected investors to invest in their ‘very innovative’ electricity-generating SolarWindow coatings product which will produce ‘Endless Energy’. You don’t need to be Einstein to laugh at this statement.

They also created this webcast ‘announcement day’, which will take place on  20th August. This is a quite well known trick to get potential investors excited as if there is great, big news are on the way…

Companies pay for paid promotions when they are desperate and it hardly ever ends well for the unsuspected investors as it is normally a trick for the insiders to sell their stock to these investors at ultra inflated prices.

The company has over 8 million shares of common stock issuable from warrants and with absolutely no revenue the company will want to raise money and will use these warrants very soon. What do you think will happen to the stock price then?

Solar Sector and Real Innovations

As well as stock trading, I also own and operate a very successful Venture Capital organization in Europe which helped hundreds of Small to Medium Enterprises (SMEs) to raise seed or commercialization finance. Solar Sector happens to be one of the areas that we had helped many companies in this domain and have quite a good overview on the latest innovations and trends in the sector.

The technology that WNDW claiming to be working on is not in any way new or innovative. Spray-on-Solar technology as a coating is almost 20 years old technology. Although, It is true that more applications areas has been created for the technology in the last 5 years or so, the technology itself is being protected with concrete Intellectual Properties such as patents from very big companies in the sector.

SolarWindow has filed a patent in 2012 (which is still pending and can be seen here: https://www.google.co.uk/patents/US20140198371?dq=%22solarwindow%22&hl=en&sa=X&ved=0CCAQ6AEwAGoVChMIoL-1w42pxwIVi6HbCh12aw4l). The patent is very general in terms of its explanation of the invention and pretty much similar to some other patents out there. It is very unlikely that it will be ever granted (patents pending means absolutely nothing, it means that it has been filed and awaiting decision from the patent office but companies love to mention those as if they have some great technology).

Photovoltaic (PV) systems can be classified as ground-based (stand-alone systems e.g. solar farms), building-applied (BAPV) (e.g. roof mounted panels), and building-integrated (BIPV) (where PV is integrated with building function e.g roof tiles, skylights). The majority of solar PV systems in use today employ solid, flat-panel PV modules, with the PV material encapsulated in glass.

For fabric-integrated and glass-integrated  PV, lightweight and flexible thin-film PV modules are required. The alternative technologies suited to flexible PV manufacture include amorphous Si (a-Si), Copper Indium Gallium diSelenide (CIGS), Dye-Sensitized Solar Cell (DSSC) and Organic Photovoltaics (OPV).

Current State of the art and the companies in the sector (with concrete Intellectual Poperties can be seen as below):

FLEXIBLE/Integrated PV

aSi

CIGS/CIS

DSSC

OPV

Major Manufacturers

Unisolar

Ascent Solar, Nanosolar,

Solopower

Miasole

Dyesol

Sony

G24i

Konarka

Solarmer (R&D)

European manufacturers

Flexcell

Flisom AG

PVflex Solar

CIS Solartechnik

Odersun

Solarion

G24i

Dyesol UK

3G Solar

SolarPrint

Konarka

Heliatek (R&D)

Cell Efficiency [%]

5-8% product

7-11% product

18% R&D

<10% product

<5% product

8% R&D

Lifetime [yrs]

25 years expected

10+ years expected

Poor outdoor (UV) lifetime

Typ. 100 hrs.

Not fully proven

80% degradtion over 3 year claimed

Maturity

Mature

Emerging products

Prototypes

Emerging products

Please note that, the efficiency of flexible thin-film or printable PV technologies (that WNDW are claiming to use)  is lower than the solid panels (crystalline silicon cell solar modules have efficiencies up to 24%, and are typically <18%). This means that efficiencies are very low, return on investment on them are typically many years for big applications. It is very unlikley that any of the construction companies will be interested in purchasing WNDW products and use them in their buildings or skyscrapers (as claimed by he company).

Looking at the information above, knowing about this company history (when they were NENE), knowing about the technology domain, WNDW is a STRONG SELL\SHORT for me. I currently hold a large short position and adding more before the big crash.

I hope this helps.

MT

 

 

 

 

The Story of the Fisherman (and being ‘selective’ in your trading)

One of my favorite short stories and this story has been shared many times on the net, I am sharing Courtney Calver’s version here:

“An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked.  Inside the small boat were several large yellowfin tuna.  The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “only a little while. The American then asked why didn’t he stay out longer and catch more fish? The Mexican said he had enough to support his family’s immediate needs. The American then asked, “but what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos.  I have a full and busy life.” The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?”

To which the American replied, “15 – 20 years.”

“But what then?” Asked the Mexican.

The American laughed and said, “That’s the best part.  When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!”

“Millions – then what?”

The American said, “Then you would retire.  Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

The Mexican Fisherman smiled and thought, “isn’t that what I already do?”.

As the Mexican Fisherman demonstrated you can have more with less, in trading we should find a way to maximise gains with the least amount of risk and work. We should let the trade work for us (not the other way around).  This means being very ‘selective’. Easier said than done. I add quite a few tickers on my daily watchlists but most days I only try to heavily focus on 3 or 4 tickers at a time (sometimes these trades are only day trades, sometimes a few day swings). In my opinion, this enables taking advantage of  less risky trades (better risk/reward ratio compared to some other trades out there), consistency and selectivity. Think about it before the next trading session…

I hope this helps.

MT