Load the boat on DRYS, ACH and RIG

This week was rollercoaster ride of opportunity.

The bottom fishers are out in force and are catching some huge bargains.

My ride on DRYS has been turbulent. My buy at $61 was stopped out, but I'm now back in with an average buying price of $51.31.

The fall earlier this week was an astounding opportunity. At one point, the Dow hit May '06 support at 11,670 making the average DOW forward P/E around 12. The average PE hasn't been this low since around 1980. Dow's historic 25-year average PE is around 21.

Anyway, these opportunities only come around a couple times in your life time, and to be successful as an investor, you need to take advantage of them when they do.

The fall was prompted by the subprime fiasco, and what is even more interesting, the crash was started in Asian markets based on rumors that some Chinese banks will have subprime losses to be write off their books. The numbers are not yet known, but I'm not that worried about it.

Record market losses across Asia prompted the crash on the DOW.

Talking about the tail wagging the dog.....

Anyway, I expect some turbulence to continue in the broad markets, but I strongly believe that the bottoms have been reached on DRYS, RIG and ACH and that these three of these stocks have the potential to increase 50%-100% within the next 52 weeks; especially DRYS.

Always remember my rule to set mental stops @7.5% below your average buy-in costs, especially for small and medium cap companies. Use mental stops and not computerized stop loss orders; MM's love to pick these off for cheap shares.

Over all, I'm still down about 3.5% on DRYS given my losses on two previous exited buys, but I should be at breakeven on 24 Jan and expect to double my money over the next 52 weeks on DRYS.

The BDI seems to be approaching a bottom and I expect freight rates to tighten up next week and average out somewhere between the BDI highs of last year and the lows were are seeing now.

FYI, Capemax rates should recover before Panamax rates given their relative support ranges set earlier in '07.

Because China built up a stockpile of iron ore last year as a ploy to get better '08 rates, they've greatly reduced their recent imports of ore over the past couple of months, but their stockpile is starting to run dangerously low and they'll have to start booking ore shipment before 07 Feb (Chinese New Years--year of the rat) if they are to avoid an out of stock situation in mid/end March.

Once China starts booking more ore shipments, the BDI will recover from its current lows. Once the BDI picks up, so will DRYS' stock price.

Buy low, sell high. What a concept.

Good luck trading.