Friday, August 19, 2011

08/19/11 'Tude Tutorial



Was today a bad day?

Let's consider the following:

(a) The market sells off -99%, and we're left with a few bucks in our retirement accounts. So what? If that happens, the balance in our portfolios will rank near the bottom of our list of concerns. Near the top will be our ability to earn a living, and I'm fairly confident we would be able to outmaneuver 99% of the crowd in that regard. On a relative basis, we might even end up better off!

(b) A major hit to my portfolio may deliver a glancing blow to my self-confidence (unlikely). An emotional change in strategy, on the other hand, would shatter it. I can live with the failure of buy-and-hold. Abandoning my positions in panic? No. Buy-and-hold has proven itself over time. If it fails in my case, so be it. Seat belts have proven themselves over time. If they fail in my case, so be it. There are no guarantees in life- we just try to make wise decisions based on the information available.

(c) Let's look beyond the markets for a moment. The fact that we reside in the US, have the education + intelligence + discretionary income to trade the stock markets, and the time to blog about it? There are probably 6 billion inhabitants of this planet who would give an arm + a leg to trade places with us.

Anyone here have a bad day? Ask the guy with the skin peel splashing on the mud face mask if he has time to listen to your story.
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63 comments:

  1. 2nd_aveAugust 19, 2011 at 4:23 PM

    Personally, I prefer to open this bottle of Hitori Musume Nigori sake while I allow Sean Bean to demonstrate the proper Zen response to anyone who steals from my portfolio while I'm doing time.

    ReplyDelete
  2. 2nd_aveAugust 19, 2011 at 4:38 PM

    I know how easy it is to obssess over the details of each trading day while losing sight of the bigger picture. Based on what I know about each of you, no one on this blog is in any danger of not not having lived 'a pretty good life.' A couple of you are in danger of someday living too well. Be thankful.

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  3. RoBearAugust 19, 2011 at 4:40 PM

    Who ever goes to the most soccer games wins!

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  4. KyleAugust 19, 2011 at 4:41 PM

    2nd -- You have good sincere thoughts (I don't agree at all w/ buy-n-hold). Enjoy your sake.

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  5. 2nd_aveAugust 19, 2011 at 4:42 PM

    Kyle- I wouldn't dream of asking anyone to agree with me. I'm only stating my case, which hopefully makes sense.

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  6. 2nd_aveAugust 19, 2011 at 4:44 PM

    There is in fact more than one way to win the trading game. Pick the one that suits you at any point in time, and you should do fine.

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  7. 2nd_aveAugust 19, 2011 at 4:46 PM

    rb- Let's just agree here and now that only you and Mark have a shot at the title.

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  8. RoBearAugust 19, 2011 at 4:48 PM

    2nd I believe you have soccer age children. Time to join the cult?

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  9. KyleAugust 19, 2011 at 4:48 PM

    2nd- Cramer had an interesting (taped) show where he explained how much the market had changed from when he entered it in the early 80's (fundamental-stock picking based), to the SPY, etc 'basket' ETFs, to the hedge funds mainly trading stock and index futures, to HFT... This is a VERY different market than when the Buy-n-Hold BS came out w/ Bogle...

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  10. 2nd_aveAugust 19, 2011 at 4:54 PM

    Kyle- That may well be the case. I just don't like the alternatives- cash, bonds, commodities.

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  11. 2nd_aveAugust 19, 2011 at 4:56 PM

    rb- The youngest plays. But unless he decides he's going after a sports scholarship, I'll never come close to attending as many games as Mark.

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  12. 2nd_aveAugust 19, 2011 at 4:59 PM

    Kyle- I can only hope that 'stocks' do not end up a footnote in history as the 'tulips' of the 20th century ;)

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  13. 2nd_aveAugust 19, 2011 at 5:00 PM

    That would seriously ---- me up!

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  14. KyleAugust 19, 2011 at 5:05 PM

    2nd- We're losing that notion of 'owning a stock' is like 'participating in the growth of a company'. These 'baskets' and the ability of large players to take them down in a second (due to margin calls, etc) is changing the landscape.

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  15. ChickenpookieAugust 19, 2011 at 5:07 PM

    Boogie-woogie Bogle boy of company B?

    Suspend Your Disbelief!

    http://www.robertsinn.com/

    ReplyDelete
  16. JesseAugust 19, 2011 at 5:18 PM

    Nothing new to report here. I no longer have the luxury of obsessing over Mr. Market while Mom is in town.

    However, I did notice that the put/call ratio closed down 11% today. IMO, not good if you're a bull and want to see fear. 10 day pc is getting up there though.

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  17. 2nd_aveAugust 19, 2011 at 5:35 PM

    Damn, CP. I wish I'd thought of that one.

    Could Bogle become the next Greenspan? Two anchors around the necks of Boomers...

    ReplyDelete
  18. RoBearAugust 19, 2011 at 5:35 PM

    Boys, 2nd is steadfast in his beliefs. Arguments against buy and hold are all for your own benefit, not his. He will be the only one that will change his view which as he has often said will come at almost no notice, So all of us wannabe traders who are made nervous by 2nds' transformation (What no take on MITK?) can view his beliefs like we would an eccentric Uncle that always wears an ascot at T-day dinner. Sadly he will not conform to convention and the daily emotional manipulation.Yet there is still hope with soccer. Come on 2nd, be one of us. Join the crowd.

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  19. 2nd_aveAugust 19, 2011 at 5:37 PM

    Keep it up, guys. Let's get it all out- take your best shots at b&h. The s&m of investing.

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  20. 2nd_aveAugust 19, 2011 at 5:40 PM

    Once they start referring to b&h as s&m, I've got it made. Watch as traders trip over themselves to participate in s&m investing. It's all marketing.

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  21. 2nd_aveAugust 19, 2011 at 5:42 PM

    rb has it nailed. Except for the ascot.

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  22. 2nd_aveAugust 19, 2011 at 5:43 PM

    In fact, if I were to publish a book titled 'S&M Investing,' it would sell a million copies, sight unseen.

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  23. KyleAugust 19, 2011 at 5:46 PM

    2nd - Well now that ur opening it up...

    http://www.wavsource.com/snds_2011-08-14_5329074620870542/tv/misc/hogans_make_u_talk.wav

    ReplyDelete
  24. 2nd_aveAugust 19, 2011 at 5:48 PM

    Screw that. Make it the S&M CD. Here it is.

    http://www.youtube.com/watch?v=goABzyuEfYI

    ReplyDelete
  25. eAugust 19, 2011 at 5:53 PM

    david. with your permission, iwould like to place your name as ecu proxy 31k shr
    E5..............i need your name
    ebee45@gmail.com
    phone .203-847..1012.

    ReplyDelete
  26. KyleAugust 19, 2011 at 6:07 PM

    2nd- couldn't really hear the low volume day trader video, but here's another...

    http://www.youtube.com/watch?v=o5Ot3XuchCI

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  27. MarkWAugust 19, 2011 at 6:12 PM

    Take a look at monthly's of AKS/X. What is this telling us? Crickes. Next support is the 09 lows and neither are very far away.

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  28. 2nd_aveAugust 19, 2011 at 6:16 PM

    Kyle- LOL.

    Re the day trading video- it gets louder as you progress, I think it's part of the humor.

    ReplyDelete
  29. KyleAugust 19, 2011 at 6:16 PM

    Mark - I have a small amount of AKS (Grasso's view is that steel bottoms towards EOY & then is strong towards BOY) we will see...

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  30. KyleAugust 19, 2011 at 6:21 PM

    AKS - just some Tweet opinions from Steve G...

    dec is VERY strong for Steel sector,, but $AKS has late cyclical electrical steel ,, very profitable ... buying $AKS based on late cycle electrical steel ,, they are 10-15% of the global market of e.s … late cycle electrical steel , utilities need it if they ramp up capex for high efficiency transformers

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  31. 2nd_aveAugust 19, 2011 at 6:22 PM

    The video I'm really searching for was posted on CC way back near the early days. Nothing to it, really, other than a trader staring at his monitor for 5 minutes repeating some variation of '----. Oh ----! WTF...oh man. Wait, it's...----!' For some reason, it had me ROFLMAO.

    ReplyDelete
  32. KyleAugust 19, 2011 at 6:30 PM

    2nd - Yes...I remember that one...can't recall whether he was trading stocks, futures, or currencies...I'll look too...That was good/bad as it was a self-destruction by not taking a stop...

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  33. 2nd_aveAugust 19, 2011 at 6:41 PM

    Look, guys. If the market crashes and the country enters another Great Depression, do you think cash will save you? A couple of years of unemployment and you'll burn through it- and that's assuming the dollar maintains a semblance of strength.

    On the other hand, if the market recovers and you're holding- odds are good you'll retire on time.

    Timing? As long as you're right enough times, you'll be fine. But you'll pay a price if you're not.

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  34. MarkWAugust 19, 2011 at 6:47 PM

    I couldn't find the video. Les posted it. It was a futures trader and I'm pretty sure it was a Sunday night.

    ReplyDelete
  35. KyleAugust 19, 2011 at 6:53 PM

    2nd- I've always felt that Buy-n-Hold is based on the premise that Invention/Progress/Capitalism will be the over-riding Force going forward. The Moron Bureaucrats / Excessive Litigation / and Large Separation between the Haves-n-HaveNots is eroding that. There are TOO MANY STUPID People in Govt who have the ability to 'change-the-rules' whenever it suits them. Rethink ur 'Buy-n-Hold'. It's a different world Kimosabe...

    ReplyDelete
  36. illiniAugust 19, 2011 at 7:01 PM

    HP = A troubled company. My take on this article which supports my view and why I have never owned it. I would rather own CSCO but do not presently.

    http://www.ritholtz.com/blog/2011/08/hp-grow-up-already/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29

    ReplyDelete
  37. KyleAugust 19, 2011 at 7:03 PM

    The search ability @ CC Sucks...

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  38. 2nd_aveAugust 19, 2011 at 7:08 PM

    Mark- Stud.

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  39. 2nd_aveAugust 19, 2011 at 7:29 PM

    I think this may be it:

    http://www.youtube.com/watch?v=NYeLrcWFitY

    ReplyDelete
  40. 2nd_aveAugust 19, 2011 at 7:45 PM

    Look, I know it's Friday night and illini is probably stoned out of his mind, but hey- here's a stumper. Let's assume for a moment Buffett is not an outdated strung-out front man for Geithner- I know it's a stretch- what about the positions he's holding/adding to? What's up with that?

    ReplyDelete
  41. KyleAugust 19, 2011 at 7:52 PM

    2nd- Yep, u got the video. That was it.

    One of the old-timers that I worked with at NRO was a big Buffett fan. Here's the deal...Buffett can pick up the phone & call the CEO & say 'I'm looking at your company and 5 of my people are coming over to look over your books tomorrow and IF I like what I see then maybe I'll buy you out' That's a whole different playing field than we're in way DOWN here in the valley...

    ReplyDelete
  42. 2nd_aveAugust 19, 2011 at 7:55 PM

    Then 'buy BRK-A and hold' should work?

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  43. 2nd_aveAugust 19, 2011 at 7:58 PM

    And if BRK-A works, then my picks should blow the top off Buffett's Caddy. That's all I'm saying, bro ;)

    ReplyDelete
  44. KyleAugust 19, 2011 at 8:05 PM

    2nd- Yea. A ur betting on those 3-5 folks to navigate ur future. Maybe. Maybe... It's BROKEN, and I really believe that. They had an interview w/ Mark Fisher on CNBC a few days ago

    – The Markets are Going to Force the Politicians to do their Job; Oil is getting hit because it's the most liquid market to raise cash; Stick with Energy and Food – what people need.

    I'm short ERX puts and plan to average down if assigned. My version of B-n-H

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  45. RoBearAugust 19, 2011 at 8:08 PM

    buy BRK-A and hold. I believe that has worked in the past.

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  46. 2nd_aveAugust 19, 2011 at 8:10 PM

    If I had taken David's advice a few days ago? WTF. I'd have kicked --- buying gold at the highs, and bypassed a head butt on my positions.

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  47. 2nd_aveAugust 19, 2011 at 8:11 PM

    That's the problem, rb. We can only know what's worked in the past. I want to know what works tomorrow.

    ReplyDelete
  48. KyleAugust 19, 2011 at 8:13 PM

    Yea well there are stupid people buying tops everywhere...

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  49. 2nd_aveAugust 19, 2011 at 8:14 PM

    Look, I'm only asking for advance notice ONCE.

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  50. KyleAugust 19, 2011 at 8:16 PM

    NO man there was no 'ONCE' back there...was there??

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  51. 2nd_aveAugust 19, 2011 at 8:20 PM

    Sheesh, Mark. It was only a joke.

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  52. 2nd_aveAugust 19, 2011 at 8:21 PM

    Kyle- Can you rephrase the question, please- I know typing while buzzed is difficult for all of us.

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  53. 2nd_aveAugust 19, 2011 at 8:22 PM

    Keep in mind that under the circumstances, I'm twice as buzzed as any of you.

    ReplyDelete
  54. KyleAugust 19, 2011 at 8:23 PM

    Catch u guys tomorrow. Maybe we can exchange some charts...

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  55. 2nd_aveAugust 19, 2011 at 8:25 PM

    Alright Kyle.

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  56. MarkWAugust 19, 2011 at 8:28 PM

    What the heck you doing awake still 2nd?

    I'm looking into Lenny Dykstra's trading system...

    ReplyDelete
  57. MarkWAugust 19, 2011 at 8:30 PM

    The main thing I don't like so far is the penitentiary part :)

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  58. illiniAugust 19, 2011 at 8:45 PM

    2nd- I don't need a Friday night to enjoy red wine every night. After all I am retired. I'm thinking about Nadurra but it might make me "stoned". Then I might put in a buy order for something that I would regret. That's almost anything right now.

    ReplyDelete
  59. RoBearAugust 19, 2011 at 9:37 PM

    2nd. Your avatar would be more bitchin with an ascot instead of a bow tie.

    http://www.alibaba.com/product-free/251444679/MA_1_Classic_Ascot_Set/showimage.html

    ReplyDelete
  60. JesseAugust 19, 2011 at 10:03 PM

    Multiple/ more additional insider buys in AKS, ZEUS, ACI, RAIL, MTG. Hmmm.... These will be the ones to buy when the time is right.

    My feeling is that insider buy supported stocks will outperform 2 to 1, especially the ones beaten to a pulp. F$^K buying the ones that "have held up well" during this slide. That's a sucker's bet.

    I watched a dimwit on CNBS 2 weeks ago say that the #1 real estate market to invest in going forward is Bismark, ND because it fluctuated the least during the bubble and has held up the best during the downturn. Are you kidding me? When the tide turns in 2025, how will Bismark perform compared to parts of FL, AZ, and Vegas while they are up 35% in one year?

    ReplyDelete
  61. RoBearAugust 20, 2011 at 1:45 AM

    My Buy and hold promo video from last year enjoy.
    http://www.youtube.com/watch?v=wKAu2cP0aHM&feature=related

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  62. AnonymousAugust 20, 2011 at 7:16 AM

    U guys r some funny dudes. Is it me or if 1120 holds then bac looks bitchin?

    ReplyDelete
  63. AnonymousAugust 20, 2011 at 7:20 AM

    http://m.cnbc.com/us_news/44206921/1

    Let's be honest if ur an s&m holder and see this beast sayin this ur scared

    ReplyDelete

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