Stock Gumshoe Contest — Win $100 For Your Idea

by Travis Johnson, Stock Gumshoe | October 11, 2008 8:19 am

Welcome to the weekend after the worst week I can ever remember seeing in the stock market. I can’t do much to make you feel better about that, but I can give you a chance at $50 or $100 if you’ve got time to share an idea with the rest of us.

Famous investors of yore have shared lots of thought about what to do in these times, and most of them revolve around buying when everyone else is selling. Rothschild suggested that we buy when there’s blood in the streets, Buffett tells us to be greedy when others are fearful.

Well, today I wouldn’t be surprised to see at least a pinkish tinge to the sidewalks … and judging from my correspondence, people are as fearful now as they were after September 11, 2001 (for different reasons, of course). Who knows if it’s the bottom, but there certainly aren’t many enthusiastic buyers.

This market crash could hardly have come at a worse time — millions of Baby Boomers are hoping to retire over the next 10 years, and for those who were trying to goose their returns with a bit too much stock exposure those dreams of life on the road in a Winnebago may be pushed back a bit.

But if you’re like me, you can’t help but feel that in all this pain there may lie a bit of opportunity. And we know that in the short term, the market makes lots of mistakes as it rides emotional waves of fear and greed … so where does the opportunity lie?

Heck, maybe all our fear is misplaced and the fact that the Dow turned around late on Friday to move up 1,000 points or so (from intraday lows to intraday highs, at least) means we’re all fine, the last seller has left the building, and we’ll all be rich. No?

Now’s your chance to be the next Rockefeller or Buffett, though your rewards will be quite a bit more limited than theirs. I’m asking you to suggest a stock or other investment that you are tempted to buy right now, whether or not you can bring yourself to actually do so.

And I’ll award $50 each to two submissions — one whose idea sounds most interesting to me or is best presented, and the other to the person who suggests the stock that does best between now and election day. That’s only three weeks, so it’s a crazy time frame, but if I wait much longer I’ll forget to keep track. You can still come back and take some bragging rights if you make a good longer-term call.

And yes, the same person can win both if that’s how it works out. So you might just win a hundred bucks if you’ve got the magic October touch.

One catch: I’ll only reward the money if at least 20 people submit ideas.

The rules:

  1. You can submit only one idea, unless you fool me by using two different email addresses or accounts. Enter your idea in the comment form below.
  2. Submission deadline is Monday morning, before the stock market opens in NY. If you believe you’ll get great insight from the Asian markets on Sunday night, or the premarket Monday morning, feel free to wait until the last minute — 9:30 EST is the deadline Monday morning.
  3. If two of you have the same idea, the first one submitted gets credit.
  4. The Stock Gumshoe short ban is in effect — these have to be long positions in either exchange-traded debt or equity. You can choose an ETF or closed end fund if you like, but not a short or ultrashort ETF, or a short position in anything. And no, there’s no ticker for “coffee can in the backyard,” though I suppose you could pick the GLD ETF if you like.
  5. You can submit just a stock ticker if you want, but if you’d like to explain yourself please keep it fairly brief — no more than a couple paragraphs. You’ll have to explain yourself for a chance at the first $50.

I know that many of you wouldn’t part with your money right now no matter what, even if it was Mother Theresa at the door trying to sell you a bar of gold for a dollar, but I know most of you have at least a little temptation — who thought that GE would be in the teens? Or that Microsoft would trade at a single digit PE and have a dividend yield that’s actually worth looking at? And who knows, is something going to happen this weekend that changes everything?

So … what’s your stock market temptation?

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  1. Scott B
    Oct 12 2008, 04:07:12 pm

    I’ll go with CHK. Natural gas is a relatively plentiful domestic energy source and is being unleashed and developed in fields all over the country – from barnett to marcellus, to fayetville and haynesville – and not to mention the bakken. It is relatively clean burning, in wide use by utilities, business, and homes, and is being heavily promoted through the pickens plan as a “bridge” to hydrogen fuels. CHK has fallen some 80% from their highs of 90 days ago and the winter (and likely higher nat gas prices) is only now arriving. They *could* be an easy double or even triple from here if things do nothing but just normalize.

  2. Dan
    Oct 12 2008, 04:18:34 pm

    ETFC based on the good possibility that they will be bought out by GE. GE needs to get qualified for GOV’T subsidization by owning a bank.

  3. stefano
    Oct 12 2008, 04:39:08 pm

    well i bought a lot of drybulkers and i’m out of money actually but there are some very good deals in the space
    if i must to chose only one i say nm
    too cheap today
    but there are some others like drys or exm excellent companies
    and some hig dividend payers like gnk ocnf prgn free sblk
    i’m loosing 40% to 70%
    in this stuff and i’m still confident
    i’m very sad because i could not buy more
    money is all in
    good luck to everybody

  4. New Trader
    Oct 12 2008, 04:47:14 pm

    Got late into the contest and many of my favorites got picked. I’d say APL (was named in Gumshoe after some teaser pumped up natural gas co in PA). Another idea is to buy equities with good monthly dividends, like RCR. This is like after-Xmas crearance sale.

  5. rumpole
    Oct 12 2008, 05:43:24 pm

    Bank of America for the 3 week pop. Seems to me that since the financials have been at the core of the problem, they have the potential for most movement (obviously so far down). Longer term I like Trinity (TRN), which seems to me to be in a lot of great spaces, rail cars, wind towers, infrastructure.

  6. Jan Upton
    Oct 12 2008, 05:49:41 pm

    Petrol One, PTLNF.PK – Highly speculative, Canadian oil explorer – oil and gas concessions in Gabon, Africa. Well capitalized. Memorandum of agreement complete on refinery to be built in Niger – press release should be out soon.

  7. Wayne
    Oct 12 2008, 06:07:40 pm

    I have Diana Shipping (DSX). This is the only stock I have that I haven’t bee trading. I bought it at $30 and then some more at $13. It closed Friday at $14. This is a strange one as the yield is better than 25% at these prices. Someone figure this out-
    Q3 2007 EPS $.45/share
    Q3 dividend $.58/share
    Q4 2007 EPS $.49/share
    Q4 divident $.60/share
    Q1 2008 EPS $.70/share
    Q1 dividend $.85/share
    Q2 2008 EPS $.76/share
    Q2 dividend $.91/share
    Q3 and Q4 estimates are $.75 and $.73
    Like I said I can’t figure this one out but it’s paying even better than 10% ant my original purchase price.
    Also PE 5.1 and PEG 0.3

  8. 13 |
    Oct 12 2008, 07:17:45 pm

    Some interesting stuff, folks — and an overwhelming response, which is great to see. Some stocks I own or have looked at in that list, too.

    Keep ’em coming for the next 12 hours or so — will pick the best idea based on my opinion on Monday sometime for the first winner, and will use Friday’s close to track all of the picks to see who is the second winner on Election Day.

    I hope we’re all winners … but now I’m getting a little greedy, I’d like some of my favorites to get just a leeeetle bit cheaper. Of course, if you listen to CNBC that might mean the world is about to come to an end.

  9. Mark
    Oct 12 2008, 07:46:16 pm

    Alright I am about as amatuerish as they come but I like NYMT, they got out of selling mortgages and just buy quality paper(if there is such a thing right Now). I also like Maverick oil, a very small oil play in the states. I also like RBK (ADR’s) and Ford , they are dirt cheap and I do feel they will make it out of this mess.
    Love your email

  10. Al Cafiero
    Oct 12 2008, 08:39:57 pm

    You cannot buy too much of this.

    Metanor: MTO in Canada Meaof in usa. @ $.46

    They are produvcing gold and it is priced at a junior explorer level.

  11. jim t.
    Oct 12 2008, 09:04:02 pm

    Since we’re only talking three weeks, my bet would be that RIG will have a nice bounce. They’ve been the red-headed step child of the energy family recently, and it’s just about time for the investing world to see it as a Rita Hayworth instead of a Carrot Top.
    For longer frames, the Irish banks will be solid – in three years we will wish we bought IRE and AIB now

  12. Rob L.
    Oct 12 2008, 10:15:26 pm


    Aracruz (ADR’s). I calculate the value of these ADR’s at somewhere north of $60. But here it sits, trading around $12-13, with a safe dividend of $3.31 paying us well over 25% to wait for a recovery. Once-in-a-lifetime stuff.

  13. Wynne
    Oct 12 2008, 10:50:26 pm

    My idea is to buy Penn West Energy Trust (PWE) for the dividend. The yield went up a lot this week. I bought shares at just over 17 this week and it closed at 14.33. But, I think it will come back and it pays out every month. If I had a lot of money, I’d buy more.

  14. JGunnlaugson
    Oct 12 2008, 10:59:45 pm

    Perhaps the workers will settle the strike due to the economic crisis. Will they do it before the US election? They should.

  15. BBuzit
    Oct 13 2008, 12:50:50 am

    I would not purchase any stocks at this time. moving in and out of equities daily (long and short) untill the market is responding positive. If I had to leave money in the market it would probably be in a food stock,(GIS) I can see this stock breaking new highs within the next three weeks considering the state of the global economy.

  16. Wei Ding
    Oct 13 2008, 02:50:07 am

    I am thinking about


    Oil and gas in Israel

    Dallas based Zion Oil and Gas Inc. is offering an opportunity to purchase Units at $10.00 per Unit. Each Unit consists of: One Share of Zion stock and One Warrant.After they close the public offering the share of stock will trade on the AMEX under the ticker symbol ZN, identical to Zion’s currently traded common stock.

    What makes the current offering special is that the Warrant received with the Unit purchase allows the purchase of one additional share of common stock for $7.00 at any time between the final closing of this offering and January 31, 2012. The warrant price stays at $7.00 until January 31, 2012, regardless of the price of Zion stock on the open market during that time.

    A $10.00 Unit buys one Share of Zion stock plus the Warrant; giving the right to buy an additional Share of Zion stock at a fixed price of $7.00 at any time between the final closing of this offering and January 31, 2012. The Warrant only gives the right to buy an additional share at $7.00; investors are never under any obligation to purchase that additional share.

    The minimum subscription for each person is 100 Units or $1,000 (100 x $10 = $1,000). After the Company has sold a minimum of 325,000 Units, the Units will trade on the American Stock Exchange (AMEX) under the symbol ZN.U. After the termination of this offering, the Units will dissolve and both ZN Stock and ZN Warrants will trade on AMEX. The symbol for the ZN Warrants will be ZN.W.

    Investment dollars in the current public offering go directly to Zion to fund future exploration and the planned multi-well drilling project.

    If Zion succeeds in its mission of discovering oil and gas in Israel, the potential financial opportunity of participating in this offering will be a handsome profit.

    This could also be another source of oil.

  17. Pedro
    Oct 13 2008, 04:13:56 am

    VIX Index Options – symbol (^VIX on Yahoo Finance)

    Specifically Put options, because the swings have been so parabolic, the only SURE thing is that Volatility will die down (Therefore, I hope!, the Puts would increase exponentially in value). You could be more conservative & buy a Straddle of Calls & Puts in the further out months & wait for the combined value of both ( Calls & Puts ) to eventually surpass the Cost of both.

    If you can buy as far out as possible, you can sell “Covered Calls & Puts” around your orignal position of Calls/Puts that you bought.

    I like the idea of selling into Hysteria & buying during boredom.

    Good luck all & thanks for your great ideas!

  18. JimVarney01
    Oct 13 2008, 07:41:32 am

    DEO – Diageo Brands. Their price is low right now but with the phenomenal market share they have with their top brands they are still making a ton of dough. With these troubling times there’s a lot of people drowning their sorrows, I just hope they still buy the premium diageo brands.

  19. katachthonios
    Oct 13 2008, 10:22:16 am

    TBSI – Yes the BDI is down and so is TBSI, but their price to book is .5, their P/E is 1.6 and they just had record profits last quarter (twice the previous years!) and because they have a different business model from other dry bulk shippers their value isn’t as dependent on the BDI (they had a silly run up to $70 at one point – I’d say fair value is $25-$30). The only thing I don’t like is no dividend (like say PRGN or EGLE – which have, at current prices 30+% dividends) but they reinvest the money they make right back into the business. Well, run profitable company with ludicrous ratios…

  20. 13 |
    Oct 13 2008, 10:46:28 am

    Yep, I think it actually works out to about $2,300 — who knows, we may get there, they continue to talk about more stimulus programs, and we’ll probably see public works funding increased, too.

    My oldest daughter is 4, I was going to ask her if I could borrow $5,000 directly instead of letting the government lend it out on her behalf … but she doesn’t have it yet (damn child labor laws!). I’ll have to let her take out one of those credit card offers she gets in the mail so she can help to fund my new big screen TV. 🙂

  21. Danny
    Oct 13 2008, 11:15:32 am

    AAPL would be one of my choices but someone already picked that one…. so i will pick GOOG.

    I am also all for the fair Tax idea.

  22. martin
    Oct 14 2008, 04:03:38 am

    hi, i love your site, best thing on the screen,
    my pick is ENER, energy conversion devices;
    why does nobody ever talk about them, or did I miss it?

    greetings from italy

  23. Computer Guy
    Oct 25 2008, 11:07:54 am

    CEF Central Fund of Canada. They buy gold and silver bullion and sit on it. If you think gold and silver are going to appreciate during times of inflation, you might check it out.

    Disclosure: I have approximately half of my IRA in this fund.

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