RE:Big Trade At The End?Nice post Lee!
Here is something I was puting together as I read your post.
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Baytex – Price Increase into earnings.
It’s obvious to anyone who reads this board that earnings is forthcoming. Is earnings itself reason enough to explain the recent run up in price? Maybe. I think it’s reason enough to evaluate other possibilities as well.
If you have been shorting the OTCBB here in the states, and you have found it more difficult to close out the position, you could buy shares in Canada. This would be harder for retail shorts than institutional ones. Anyone who has researched Baytex would not short it now, unless they were short term and using puts, or shorting the box. A chart is all that is needed, to see shorting long term has been a failed strategy, if only in theory. We do know the 18 months required for re-listing after de-listing on NYSE is now in the rear view mirror. Once upon a time, all short positions were required to be closed out when a stock was changing it’s exchange status. I have a hard time accepting this as the only reason why the share price has run up going into later fall season, though it is one that could be partially responsible. Do I believe retailers, such as ourselves, will be the last to know when Baytex returns to the NYSE – YES! When people are not as willing to give up their shares, buyers must pay a higher price, and volume does not need to be higher relative to recent activity.
Another thing to consider is something I mentioned a while back, and I believe others on the board have as well. Sector Rotations! Like catching the 50 year storm wave, and having the wave itself call you a week before it was going to happen, so you would not miss it! It is happening now, as Tech is finally getting it’s comeuppance! Just ask Zuck how his fortune has held up, like the song “Dust in the Wind” by Kansas! It takes a while to unload large positions, and the bag holders are about to get slaughtered in tech in the next few months. So what do those in the know do, with the proceeds of their tech distributions? You buy oil and gas companies. I am certain this is going on now, and we are going to have to be patient a little longer, because we are perceived as a laggard, and a place where a Berkshire Hathaway type institution can not invest like they need to. Again, we will be the last to know about more institutional stakes in Baytex and others.
I’ve read some bashing of US politicians recently, and I like it. They need it. Could you imagine where we would be if Baytex was run by the US Government? Share price: USD $0.0000000000004 / share, and Multi-Quadrillions in long term notes! When we as investors would to call to complain, they would tell us, we need the house, senate, and presidency to do something about it!
RS