Wednesday, June 1, 2011
06/01/11 Live by the sword
I didn't say die by the sword. Live by it. I lived by the sword when day trading, and I'll live by it through the peaks and valleys of buy-and-hold. It's all mental, and all battles are won/lost within. For introverts like me, it's always the best of times, and the worst of times.
(a) I could have closed my positions at Tuesday's close. In fact, I briefly considered it. Not because I sensed a sell-off today. It was because my port was back near YTD highs, and there was no doubt we would have a sell-off soon. However, the fact remains ST market moves are unpredictable. So no regrets.
(b) Is there any benefit to standing firm during corrections? Sure, there's always a benefit to pain- humans are wired that way. One that comes to mind immediately is the 'flip side'> added endurance when one needs to stand firm during rallies (in my opinion, the more difficult battle).
(c) As with all 'setbacks' in life/trading (or is it trading/life), the key to maintaining one's equilibrium is quite simple: Keep your eyes on the ball/goal. That one rule will get you through anything in life/trading (or trading/life). I kid you not.
When the SPX hits 1500 and you're still holding, return to June '11 and thank the indexes for taking a hit, and throwing unbelievers off the train.
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Nice bail out on SPXU, Pz.
ReplyDelete"As with all 'setbacks' in life/trading (or is it trading/life), the key to maintaining one's equilibrium is quite simple: Keep your eyes on the ball/goal. That one rule will get you through anything in life/trading (or trading/life). I kid you not."
ReplyDeleteThat's very true, 2nd_ave. As I keep my eyes on the goal -- ECUXF above $2.25 by the end of 2012, it is easy for me to add on any dips below $1 as opposed to worry about my position. As I wrote before, the good things for ECU have ALREADY happened: gold and silver have surged up and ECU has fine tuned its production to produce 4M silver equivalent oz per year with their current mills (assuming 900 tpd output and a 90% recovery rate for gold/silver, which they are targeting starting 3Q 2011). If they make a $25 profit on each oz sold, then they'll have an annual profit of around $100M starting 4Q 2011, when they reach the target capacity of 900 tpd. Their current market cap is only $250M, while the P/Es assigned to junior producers with a great potential for expanding resources are UNBELIEVABLE (FVI.TO has a P/E of 44, while GPR.TO has a P/E of 77). Now slap a P/E of 40 onto the $100M profit for ECU and you get an 8X potential for a stock increase by the end of 2012. And that's WITHOUT any additional drilling results (they are supposed to release first drill results for the massive high-grade sulphides any day now). Keeping that in mind as the end goal, there is simply no point in worrying about anything that happens to the stock price now, before the 4Q2011 earnings are announced in Feb 2012 and ECU updates its 43-101 based on the current drilling of high-grade sulphides.
I experienced a series of hits between January 1973 and March 1974 that set the stage for a phenomenal May '74 through May '75- a stretch that still defines my outlook on life.
ReplyDeletedavid - two things about your projections:
ReplyDelete(1) you need to back out taxes
(2) you need to assume a certain amount of dilution
otherwise, i agree it looks like a solid investment, almost MITK-esque :)
2nd - care to share about your last post? i'd love to hear.
ReplyDeleteDavid- I notice that ECUXF hit 2.79 in 2007, a time when gold/silver prices were much lower.
ReplyDeletetof- That would be the next great (Asian-)American novel, which I plan to work on after 'retirement.'
ReplyDeletefeel free to share teasers with us.
ReplyDeleteECUXF will probably hit 2.25 the same way REDF hit 12- quickly and with no warning whatsoever.
ReplyDeleteWhich is exactly why we're all holding. No other way. You have to be holding when it starts. And you have to fight the pressure to sell until it hits your target.
tof- I might do that from time to time. Warming up with a small audience can help work out the kinks.
ReplyDelete"David- I notice that ECUXF hit 2.79 in 2007, a time when gold/silver prices were much lower."
ReplyDeleteMy point exactly! When the market pendulum swings toward liking junior miners once again, ECUXF can surge to $10 with the current gold/silver prices!
Debt ceiling vote - Last night's house vote was publicized as symbolic, so what does this say about these geriatric patients aside from they've got too much time to waste and love playing games?
ReplyDeleteTOF: what do you mean "back out" taxes?
ReplyDeleteWhy are you mentioning dilution with ECUXF? The company has no plans to raise any capital...
Chicken - the debt ceiling vote was the EXACT reason why the market dropped today. In due time when the ceiling vote passes, we will see the market rise.
ReplyDeleteGM - Approaching the 52wk low again...
ReplyDeleteTOF - Yep, these are the same Good 'Ol Boys who as their first order of business made certain those making $250k or more had their tax cuts extended.
ReplyDeleteAnd per Boehner they want to cut government spending so as to create jobs. I don't get the connection, I could see cutting spending on Military and war-mongering, foreign aid and support to dictatorial regimes, but it seems their intent is to simply tighten the noose on boomers, unwed mothers and probably orphans.
For some reason, I was watching WFC all day looking for some support. Seriously, take a look at a 180 day chart. What a disaster. And this is the best capitalized/run bank there is? Are you Fing kidding me? Sellers ALL day long. Crikes....
ReplyDeleteLong players...as am I for now...we better be very careful here. It looks really ugly here and Zombies are at my door step. Peek out the window, they might be at your house also.
TOF- Damn bro, we usually jive. I'm not at all positive here. Bitch slap me into shape.
ReplyDeleteCrikers...Want to see an ugly 360D chart? Check out MS.
ReplyDeleteOn the plus side!!!! Take a look at a monthly on GLNG....Winner, winner, chicken dinner!!!!
Mark > I'm having a hard time being positive too but I'm so heavily invested in MITK, which is in one of the more bullish segments in the market I have seen in a while, that it's hard to be anything but positive. Then again, I fully expect MITK to dip down to the 5's again if the market continues to misbehave.
ReplyDeleteYeah, thats the trouble. Almost everything follows the market, even up and comers like Miteck usually.
ReplyDeleteillini > over the short term, yeah...but over the longer term if a company is a true winner in a secular bull market, even a down market won't keep it down. and if the market eventually turns around then it provides even more support for the companies in secular bull markets.
ReplyDeleteMarkW, TOF,
ReplyDeleteit's probably good you are feeling so negative. The market is still much closer to the year's high and low and is down less than 4% from the year's high.
If a lot of people feel like you do, we are probably closer to the bottom of this run than the top. I still see a nice set of higher lows in the S&P starting from mid-March.
Interesting analysis over at bespoke on the effects of the last major Japanese earthquake and this one.
ReplyDeleteNever know for sure until after the fact, but it does give support to the idea that the current weakness is Japan related.
http://www.bespokeinvest.com/thinkbig/2011/6/1/is-the-slow-economic-data-due-to-japan-or-something-deeper.html
Sold 1000 shares of BEXP @ 29.80 that I bought yesterday @ 29.40ish.
ReplyDeleteSold 1000 shares of BEXP @ 29.83 that I bought yesterday @ 29.83.
ReplyDeleteKeeping my core position of 4000 shares.
BEXP - Plan on selling my $29.82 shares bought yesterday at $31.14 on the gap fill, hopefully today...
ReplyDeleteGPL - Looking at buying some GPL at $3.05 or lower... Maybe $3.08 is close enough to fill that gap?
GMO...Nice.
ReplyDeleteGMO - Buyers in anticipation of today's Eureka Town Hall meeting?
ReplyDeleteGL... Got to run.
ReplyDeleteAdded 3k more nls at 1.87
ReplyDeleteBEXP - Sold BEXP @ 30.09 b/c I bought GPL @ $3.05
ReplyDeleteBEXP - Kept original position, of course.
ReplyDeleteAny of you catch the MarketWatch DJIA 20,000 headline? I've followed Altucher over the years. The guy needs to find a talented barber. Once I get beyond that fleeting thought, I focus on his honest takes- the guy holds nothing back, and doesn't try to explain away his bad calls.
ReplyDeleteI don't like seeing headlines like that the day after a sell-off. We likely have more downside in store. However, I pretty much agree with Altucher's bullet points.
Guys you really need to get into nls for a trade...if I wasn't so bullish on mitk I would dump all I have into this...their largest shareholder, which came in to help turn things around, is dumping shares on the open market. Business has been better than expected the last two quarters. This is tremendously oversold due to forced liquidation
ReplyDeleteI added more NLS at $1.8 a little bit ago. I firmly believe this open market selling by Sherborne is presenting a unique opportunity to sell at 25 to 50% higher in a month.
ReplyDeleteBEXP - Cushing report not so good?
ReplyDelete"Commodities trade over"
ReplyDeleteYeah sure, blue light special of the week...
Just bought 6900 more shares of ECUXF at $0.78...
ReplyDeleteJust sold 1000 shares of GMO at $4.73 (which I purchased at $4.19) so as to finance today's purchase of ECUXF.
ReplyDeleteAlso, just to raise a little more cash, just sold 400 shares of CAAS at $6.95 that I bought at $7.75 a couple of weeks ago. I bought those shares in expectation that the support at $7.50 would hold, but it didn't, and so today's pop in CAAS is a good chance to exit. I now have only CAAS long calls left (Nov. $5 and $7.50 strikes) and also short puts (August $7.50 strike).
ReplyDelete2nd. I'm a huge fan of Altucher. On his blog he does not write about stocks per say but, about his life. Honesty makes a good writer and his brutal honesty makes good reading.
ReplyDeletehttp://www.jamesaltucher.com/
I thought that my selling of GMO caused an immediate spike in it, which is how it usually happens, but apparently I got lucky this time (according to the e-mail order execution notification I just got from ETrade) and the spike started a little prior to me placing my sell limit order at $4.73, and so it actually got executed at $4.78.
ReplyDeleteUXG vs GPL - Oops, I may have selected the 2nd place horse...
ReplyDelete"Big Banks Cash In On Commodities"
ReplyDeleteSo in other words, they misappropriated the money their mother gave them for singing lessons.
Serves them right if their real estate holdings go into the crapper.
http://finance.yahoo.com/banking-budgeting/article/112847/banks-commodities-wsj?mod=bb-budgeting%20%20%20&sec=topStories&pos=7&asset=&ccode=
JOYG - Makes sense
ReplyDeleteSCCO screaming.
ReplyDeleteWish I was here for BEXP. Touched S1 to the penny. Would have sold though. I see no reason to increase my risk going into tomorrows #.
MDW - Contracting work to former public servants:
ReplyDelete"Midway Gold Corp. announced on Wednesday that the company has hired former U.S. Rep. Tony Coelho to provide advice on government relations initiatives and advocacy efforts."
CP- MDW....Yeah! I bet he will. Too Fing funny.
ReplyDeleteSell side imbalances for the financials.
ReplyDeleteSomething strange. DD seems to have an imbalance one way or the other every day.
MDW - Yeah, good move on their part. Politicians are worse than used car salesmen.
ReplyDeleteSCCO - Barclay's upgrade, I guess. Hope new buyers aren't disappointed tomorrow... I've been liking the copper chart a lot lately, looks like a little rally ready to go. Maybe I don't know what I'm looking at...
ReplyDelete"Gasoline Is Too Damn High"
ReplyDeleteI guess Americans still can't get used to the idea of driving small vehicles like most of the rest of the entire planet.
Gasoline in Istanbul is over $8
NBG/BAC - NBG Doesn't seem so bad anymore in comparison to BAC?
ReplyDeleteDB - I think this one holds a fair amount of Greek debt?
ReplyDeleteIstanbul: "Residents of Istanbul pay the equivalent of $9.63 a gallon"
ReplyDeleteTLT - Hmm, maybe today Tim wrapped up selling his freshly minted paper? Seems like an exercise in futility to have the FED continuously swapping paper with the Treasury only to ultimately result in a collapse of asset prices...
ReplyDeleteWonder when they start getting serious about enabling the creation of employment?
"Any of you catch the MarketWatch DJIA 20,000 headline? I've followed Altucher over the years. The guy needs to find a talented barber. Once I get beyond that fleeting thought, I focus on his honest takes- the guy holds nothing back, and doesn't try to explain away his bad calls.
ReplyDeleteI don't like seeing headlines like that the day after a sell-off. We likely have more downside in store. However, I pretty much agree with Altucher's bullet points."
2nd - Did you read the messages below his article? I went through 2 pages of comments and not one person agreed with him.
We go higher...much higher.
"I went through 2 pages of comments and not one person agreed with him. We go higher...much higher."
ReplyDeleteTOF -- the fact that no one agreed with Altucher does not mean that the market will go up. Remember the saying "the market can remain irrational longer than you can remain solvent"? It underscores the fact that the market can follow the crowd for a VERY long time. And if the crowd says now that we go down, the we can indeed go down for a LONG time.
TRE- Man, what a bitch! Finally pops out of that friggin channel, only to be sucked right back in.
ReplyDeleteDavid - my point is merely that no one believes in the rally still, even after being 100% higher than the lows.
ReplyDeletethe irrational reference you made actually suggest higher prices for a while longer...as in the crowd still says we're going down despite a huge 2 year rally.
Wow...Better make that 'Zombies with e-coli'.
ReplyDeleteMITK- It's ugly brother, but it's still a flag.
This should suck Jesse back in!!
ReplyDeleteWorking gas in storage was 2,107 Bcf as of Friday, May 27, 2011, according to EIA estimates. This represents a net increase of 83 Bcf from the previous week. Stocks were 237 Bcf less than last year at this time and 42 Bcf below the 5-year average of 2,149 Bcf. In the East Region, stocks were 116 Bcf below the 5-year average following net injections of 51 Bcf. Stocks in the Producing Region were 125 Bcf above the 5-year average of 795 Bcf after a net injection of 18 Bcf. Stocks in the West Region were 51 Bcf below the 5-year average after a net addition of 14 Bcf. At 2,107 Bcf, total working gas is within the 5-year historical range.
UNG kissed it's 200 EMA and backed off a bit. If it penetrates and holds, gas may be in a longer trend uptrend. NG is still a bargain historically relative to oil on an energy equivalent basis even after going up on that basis since the all time low in mid-April.
ReplyDeleteTOF, and everyone seems very negative only 4% off the highs.
ReplyDeleteWall o worry!
new post
ReplyDeleteLook at UNG:USO as a proxy for the energy equivalent ratio of the price of NG relative to oil. It's still very low because of shale gas. I know, I know, UNG is an imperfect impersonator for the price of NG but I have found the ratio to be a good relative indicator. FD: I don't own any oil or gas now, which is unusual. FWIW and not much else.
ReplyDelete