Sideways market plays

Let's look at some past trades; on this page, we'll revisit two ideas over a six-month period during which the S&P index has been relatively flat (-1% to +2%). This is simply to show that some attractive performance is possible in a sideways market.

On Thursday, December 30 1999 before market open Marc told his readers about a short opportunity on E*Trade. Reasons: the high cost to acquire customers, along with insider dumping shares in a euphoric environment. Verdict: a profit of 43% as the stock went from $29.75 at the open of December 30, 1999 to a price of $17 within six months. Over the same time period, the S&P 500 index had lost 1%. Alpha generated: +42% in six months, i.e. +102% annualized.

Only five weeks later, Marc noticed that Triton Energy insiders were accumulating shares as most of the industry insiders were getting rid of stock. The company's results had improved thanks to higher oil prices, and the management was working to increase long term shareholder value. We bought at the open of February 3, 2000 for $26.06 per share. Six months later, the shares were sold 68% higher. The S&P 500 gained 2% over the same time period. Alpha generated: +66% in six months, i.e. 176% annualized.