Bookkeeping: Short Valueclick (VCLK) - Trader Mark

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Bookkeeping: Short Valueclick (VCLK)
Aug 07, 2009 07:38 PM UTC

Trader Mark

Return	Risk
-6.84%	MID

Analyst

Profile & Performance

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Symbol	Sentiment	Start	Return	Closed
RIG	n/a
VCLK	n/a

Via Fund my Mutual Fund:

We are actually down on the day, but then again we don't really move with the market many days with our strategy.

I'm adding a new name to the short side, as Valueclick (VCLK) just reported, gapped down off a poor report and now has rallied back to just under support. A perfect low risk set up. I am risking a 3% maximum loss by shorting at $10.90 and I will stop out around $11.25. We are using about 3% of the portfolio. I would enjoy seeing mid $9s again which would net us 17%.

This exposure is completely for technical reasons, although the fundamentals don't seem too great either.

Citigroup's Mahaney told clients in a research note that based on the second-quarter report, ValueClick's lead generation segment, which accounts for about 20% of its revenue, "appears in free-fall," having dipped 39% from the period last year.
The loss of revenue from the lead generation business, which provides data to clients aiming to target Internet users with e-mail and other campaigns, could pressure ValueClick's margins, Mahaney noted.
In addition, Mahaney noted that ValueClick's display advertising business may see increased competition from Yahoo Inc and Google.

I am also looking at Transocean (RIG) as a potential short - you have a "double top" and a stock breaking below support - but since I am already weighted net short at this time I decided to go with VCLK for now. I don't want to be 40% short going into a Monday where China surely will release a Green Shoot report to stoke the world's markets ;) Until we stop being 'surprised' by the same news day after day, week after week we have to hold off being too aggressive on the dark side.

As outlined a few weeks ago, beginning with a break over S&P 1000 and (hopefully) concluding at S&P 1050 we want to become increasingly short. The higher we go into September and October the more bearish I become. A lot of our green shoots based on housing are going to lose their seasonal positives as we enter fall... and whatever the government is reporting for economic stories is for Wall Street stock jockeys to enjoy. I continue to believe Main Street is in a world of hurt ex government transfer payments - this was shown in yesterday's retail reports and will be continue to be shown in back to school sales (ex laptops and cell phones of course) as well as this Christmas. ISM Services which is 90% of the American economy also disappointed but no one spent more than 5 minutes discussing it since we were in joy over Cash for Clunkers. You don't bounce back so easy when 70% of your economy is "shopping" and the 14% truly unemployed (not 9.4%) and additional 6% underemployed are staring at walls in disbelief at their situation; no matter how much money you take from future generations.

Nothing has changed in the long run for me - our jobless recovery will continue and Americans who no longer have house ATMs have a whole new paradigm to face in the coming 3 years. (granted the house ATM has been replaced by the government handout ATM) Only on Wall Street is the loss of hundreds of thousands of jobs a green shoot. We need to be creating 150K jobs a month just to be treading water - and they can't all be in federal government, or federal government proxies such as healthcare and education. (but we're trying valiantly) - 16.7% of all jobs are now government, 12.3% healthcare. That's 30% of our workforce that is bulletproof from job loss since the costs of those 2 sectors are just piled into a heap of IOUs; hence we can only fall so much in employment.

Short Valueclick in fund; no personal position

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