Market Watch

Have a general order of battle for today. Follow the action on Genentech. Might try to pick up some shares under eighty. I forecast a share price of $120 by first quarter 2008. It's a stock that felt good to own, because Avastin saves lives. If I could just get my head around the high valuation, future drug patent expirations, and employee stock compensation, then it's a pretty good deal.

I'd like to run a screen to see my results based on what day of the week trades are made. As a rule I like to buy on Monday when people are negative. Friday seems like it has been a good day to sell. Without empirical evidence, it's only intuition.

Snapped up some Gilead Sciences (GILD) on Friday. That was a relatively easy decision, just based on current valuation. Genentech's valuation is a lot trickier to forecast. I believe the EPS advances are just beginning to kick in, and the company could be earning five dollars a share by 2008. That is pricing in the assumption that Lucentis turns into the blockbuster it is shaping up to be.

Also purchased some expensive Transocean, Inc (RIG). I am really invested in energy. I hope this current capital expenditure cycle will benefit them, because their multiple is forty. Maybe I should have double-checked to make sure I didn't buy on an earnings bounce.

Time to find an ethanol play. When I owned Suntech Power (STP) and Evergreen Solar (ESLR), I found they moved lockstep with oil prices. I don't own them anymore, because of high materials costs. That will impact earnings for some time.

The ethanol producers have been very well bought lately. There might be a value play for shorting; at least I will have a hedge against lower commodity prices. I don't want to short Archer-Daniels Midland (ADM). I would like to get into a corn producer like ADM on price dips. The one I have in mind is PEIX, Pacific Ethanol, Inc.

They are a little scary. The last price for them was about thirty-five dollars per share. The latest information I have for them comes from 10-Q data on Yahoo. Revenues for Q4 ended 31 December were about $36 million, up from $26 million in Q3. They may be a little ahead of themselves, with a market cap of over a billion.

Ratones. E*Trade is unable to borrow the shares. I cannot short this stock today. Sorry, little guy. Maybe I can get my dad's broker to short the stock. E*Trade, it's official. You suck. Within you, weak is the power of the force. When I am done, the only things left in that account will be my ET shares, on margin. FOUL!