Only buy when you feel uncomfortable

I talked about Target (TGT) several times over the past few weeks when it got crashed and people got scared. You can read the last one here. I went in when others were selling like crazy and got more when it further plunged; it was definitely a uncomfortable period to act. Two days ago, Target reported earnings for the fourth quarter and full-year 2013. The results were not good: net income for the quarter ended February 1 dropped 46%, from $961 million a year ago to $520 million. Sales fell 5.3% to $21.5 billion. So how was its stock responding? It shot up 8% on the day! Sounds confusing, isn't? Not really if you know how the market is working. The market will never make investors life easy and it always tries to scare as many people away as possible. When most people panic and you feel like at an absym, it is likely the bottom has been reached and it would be the best time to buy when no one left to sell anymore. For Target, the shares have already priced in the worst case scenario and being a little bit less bad with better-than-expected earning reports triggered its strong rally. TGT skyrocketed from $56 to $62 just within days. I played with several options along its sliding down and have harvested several thousands in the past few weeks. The best deal? $1000 within one week closed today:

I'm not here to brag but just wanted to let you know how to spot the right opportunities to make quick money or establish your long term positions. So what is the most hated and scary sector at the moment? No question, it is coal! I think coal has likely been at its bottom when no one wants to talk about it and everyone wants to run away. The coal sector reminds me of steel a few months ago, which was another great play we had. KOL is a one shop ETF for the sector, an efficient way to bet for the recovery of this sector. If you'd like to buy good but beaten down coal companies, then the Australian coal mining, Peabody (BTU) is a good one to look. It is also paying a 2% dividend.