Hercules Offshore Pops, Shanda Plops

I mentioned Hercules Offshore back on March 19. On that day, the stock was up 20 percent and I was sitting on a gain of 40 percent total in my Marketocracy Best of Funds. HERO is up another 20 percent today and the position in the Best of Funds has a 75 percent gain. It was a small position initially and has grown to about a half-position size. The previous gain came just after the Federal Reserve announced its quantitative easing policy, but today's move is probably a combination of optimism and $50 oil—a quick check of the energy ETFs shows most of them up more than 2 percent versus 0.5 percent for the S&P 500 Index.

Investopedia has a blurb on oil services today, including Hercules Offshore:

With the focus on deep water drilling, the shallow Gulf of Mexico seems to have been forgotten. The mature fields are often seen as secondary to faster growing deposits in deeper colder water. Combine that with increasing hurricane risk, low oil prices and a debt load of just north of $1 billion and you can see how Hercules Offshore (Nasdaq:HERO) has been struggling as of late. The company has the distinction of being the largest operator of jackup drilling equipment in the Gulf, and the main liftboat operator worldwide. In order to repay debt, Hercules began cold-stacking some of its rigs, including six jackups, three submersibles and 10 barges. The driller has also reduced head count by 25% since November and is planning on selling some older, obsolete driller rigs in order to raise cash. If these cost cutting measures work, Hercules may once again hit its highs

Long-term the stock could go a lot higher——it was as high as $39 in the past year, compared to $3 today. In the short-term, however, a significant pullback would not be surprising. A drop of 50 percent from these levels would still leave HERO 50 percent above its 52-week low.

Shanda (SNDA) fell 11 percent today, down to $47.76. It moved more than 10 percent three times this week, and 7 and 8 percent the other two days. The9 (NCTY) jumped almost 20 percent today after suffering huge losses the previous two days, and it's still 19 percent below Tuesday's close.

Gold & Energy Performing Well After Fed Announcement

My Best of Funds portfolio had been in a funk for about three weeks, as I covered my shorts a bit early and didn't go long the market, sticking mainly with cash, precious metals, and miners. However, yesterday's move, and today's if things hold through the close, lifted the fund to a new all-time high. The $70 swing in gold, from yesterday's lows to today's highs, was the main catalyst, while higher oil prices helped. One stock I'd added recently was Hercules Offshore (HERO), up more than 20% today and over 40% in the fund. I can't really thank Ben Bernanke for the move, even though he's responsible. I'd prefer to invest in positive growth stories, rather than the destruction of the U.S. dollar—but I also prefer high probability trades to low probability ones.

I was checking to see how the Hong Kong and Chinese listed shares on my watch list were doing. On the Mainland, the notable mover was Shanghai Zhenhua Port Machinery <上海振华港口机械>(600320.SS), which gained just under the 10% limit.

A big mover on the Nasdaq was General Steel Holdings (GSI), up 12.8% yesterday and on pace for another 14% today.

In Hong Kong, Lingbao Gold <灵宝黄金> (3330.HK) climbed 15% and Mongolia Energy <蒙古能源> (0276.HK) advanced 20.9%.

Newsworthy (article links in English): ZTE reported 2008 full year earnings. <中兴通讯>(0763.HK, 000063.SZ)
Forbes also has an article on ZTE's push into the American smart phone market.

Tencent reported 2008 full year earnings. <腾讯> (0700.HK)

Li Ning reported 2008 earnings. 中文 <李宁> (2331.HK)