Thursday, June 27, 2013
06/27/13 Stepping Down
My last two failed trades prompted an examination of my record. Despite the 'perception' that I have a sixth sense re sentiment, and despite a stellar year or two since 2005, I can't say I've outperformed a passive strategy over the past 10-15 years. I'm fortunate to have survived a tumultuous decade with the balance I have now. Researching Paul Farrell's list of Lazy Portfolios has me contemplating putting one together and leaving it alone. I've enjoyed the daily grind, but we all retire sometime. I definitely do not want to go out [insert name of favorite guru] style, walking away in defeat.
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I'm looking forward to seeing your new strategy, I think you're a smart guy and when you put head to it come up with some great ideas.
ReplyDeleteMe too. It's probably a mistake, but I like looking into specific stocks and finding pricing mistakes.
DeleteYeah, me too.
DeleteBut if you are not enjoying trading, probably the lazy portfolio is not a bad way to go. You're going to beat probably 90% of investors out there.
I've been doing much better using ST entries paired with LT holds with targets and stops. A hybrid system might be a good choice.
ReplyDeleteLater Gators.
ReplyDeleteBiggest call I ever made, was going all cash in July of 2007 in my 100% long B&H fund. I never got fully long since. I am pretty much flat to up 15% in all accounts since. So it is roughly a wash.
ReplyDeletePretty common. Seems either people stayed mostly in and rode it down and back up, or got out, but found it hard to get back in.
DeleteOf course, there are also the unfortunate who got out late and stayed.
Smart-ass broker rep informs me of trading violation by selling a position before is was past the three day closing period, I told him it wouldn't have been necessary if the dow didn't go up 300 points one day and down 300 the next.
ReplyDeleteHe just replies: Oh, yeah...
NSPH - Might say this one has come back to us. I'm not too confident it doesn't have some more "coming back" remaining in it.
ReplyDeleteFMD - F'in computers, 6300 shares on the bid and 63,000 shares traded. Not a coincidence.
ReplyDelete"Me too. It's probably a mistake, but I like looking into specific stocks and finding pricing mistakes."
ReplyDeleteI've found the most potent formula for a stock is:
(1) First and foremost, horrible investor sentiment on company / industry
(2) Improving operating trends (i.e., operating income, revenues, etc)
(3) Improving industry environment - i.e., improved jobs market / trend toward the service or product the company provides etc
(4) Near term catalysts and those catalysts are underappreciated / ignored by investors
(5) No toxic financing to deal with, or if there is, it is manageable - shares outstanding only slightly higher than they were before credit crisis
(6) Appearance of a bottom in the chart - highs above prior highs for first time in a while, major moving averages pointing up, above 200 DMA, OBV on weekly chart pointing up
(7) Previous high flier that has potential for investors to come back to name.
If a stock has the majority of that list checked off, the odds of it being a good investment are quite high.
Another thing I like to see is volume dry up...but still be above $200,000 a day in total value traded. Most people will avoid those stocks because they're not liquid enough but if they have the above list checked off for the most part then when volume comes in it will go ape shit.
DeleteGood list and similar to mine, except I usually stay away from #7's.
DeleteOne I would add is:
Unusual or complex financial reporting - I find a lot of people won't dig into a company, so if you can find one which screens poorly, but actually is OK, you can often get a good price.
Also, re your #2, I find if you can pick the point where they turn earnings/EBITDA positive, that can be a good catalyst for a move. More recently, with the market focus on income, having a stock move from non-dividend paying to paying dividends is also a good catalyst.
That's a great point about #7. I think that would definitely offer up opportunities to find good companies because complexity breeds discomfort / avoidance amongst the average investor. I personally like simple businesses though...or at least ones focused on one or two things. Conglomerates tend to get a bit messy in trying to analyze.
DeleteBB - You said this yesterday: "I guess flat for 9 months causes traders to lose interest..."
This got me thinking about a few of my own picks that have done really well over the past 5+ years and just about every one of them went through a period where they lied dormant for a while and people just forgot about it. It presents such a great opportunity because people in general are impatient and have a short attention span.
Basically, success in the markets can be boiled down to two things:
Delete(1) willingness to research + patience
or better: hard work + patience
Think about the reason why so many people focus on technicals...no offense intended, but i think a lot of it has to do with not being willing (or maybe not having the time?) to do research.
I agree. Plus technicals look so easy. I find a lot of guys on TV point at charts and say "all you had to do was buy here at the bottom and sell at this top", but charts don't look like that in progress.
DeleteOne of the best traders I know has the following approach:
1. Look at 52 weeks lows
2. Pick the ones that fundamentally make sense
3. Wait for at least 6 months to ensure no other news comes out and people forget about it
4. Buy when it appears to have bottommed
Simple, but hard to implement as people want more action.
That's a great concept. Does this trader have a website / twitter feed I can check out?
Deletehttp://www.contratheheard.com/cth/philo.html
DeleteHe sells a newsletter, writes for the Globe and Mail and has written a book, but trades for himself. His returns are at: http://www.contratheheard.com/cth/returns/index.html
The latest stock he has been talking about is Dover Downs (DDE). He thinks they can turn things around, but I didn't buy as I worry there is too much competition.
"I think a lot of it has to do with not being willing (or maybe not having the time?) to do research."
DeleteAhh, this is the same thing my "trader hero" has said many times. He says we're moochers, too lazy and so to teach us his holier than thou lesson he tells us to buy PM's.
Never mind the fact that a vast majority don't know how to do proper DD, we're all just too lazy to do it.
yeah it definitely takes time to learn how to read financials etc. that is part of it for sure. i understand its like reading a book on parenting or reading the bible for many people. much more fun to just turn on tv and watch reality tv.
DeleteI love mathematics, the more Greek symbols involved the better. But man talk about Greek, my assessments of balance sheet data seem to miss the mark way more often than not.
DeleteFED says one thing one day then another thing the next. Who are they working for, they obviously wanted to create a response. And what happened to price stability?
ReplyDeletehttp://www.bloomberg.com/quote/BDIY:IND/chart
ReplyDeleteLook at the Baltic Dry Index...now in full breakout mode. BALT's business model is the most tethered to a rise in the BDI.
Oil also hanging in there well, now almost $100, but not much talk on it.
DeleteBoth point to improving economy.
Peter Brandt: "Why I am a $65 bear in Crude Oil" June 23rd
DeleteBrandt, LOL, I love this guy. Just classic:
Delete"Plus, which one of you macro economic fundamental experts predicted Crude could drop from $148 in mid 2008 to below $40 in just six months. Don’t you all raise your hands at once! So take your pet macro economic/fundamental scenario and burn it with the trash!"
Ah... So tomorrow Jeremy Stein returns to the podium.
ReplyDeleteThat ought to keep us from printing any new highs near term...........
Picked up a couple more blocks FMD at 1.08
ReplyDeleteok this is starting to piss me off. i only got filled on half of my order at that price but i see it was down there for a little while and it should have filled me.
DeleteSCO - I gotta buy this thing, maybe not today b/c I haven't thought it through yet but I'm liking the idea..........
ReplyDeletei've liked that idea for a while. given the surplus out there and destruction of all other metals / energy commodities i don't understand why it has held up. then again, i don't really understand how its priced.
DeleteCP, saw Brandt's prediction on $65 crude and, while he may be right, I find it hard to see how crude stays around $65 for long. If the economy is improving as it seems to be and demand is increasing and pretty much all new production requires prices higher than that, you just don't seem to have the supply / demand fundamentals in place for $65 crude. Not that it couldn't happen, look what happened with nat gas, but I find it hard to see.
ReplyDelete"hard to see how crude stays around $65 for long."
DeleteWell sure, of course. We're talking about a possibility, not a probability of a trade. There could be something about to happen which temporarily will knock the legs out from under crude prices, I have no idea what it might be, could just be another chart anomaly that never even fruits.
I'm kinda waiting for 2nd and his brass set to weigh in on the subject. ;)
MNKD ?
ReplyDelete$1.07, eh? So now I guess we retest $1.03
ReplyDeleteI got 20K @ 1.08.
ReplyDeleteGoing out to dinner with X+3B tonight. Should I listen?
ReplyDeleteFind a way to tell him CP fired him, LOL! ;)
DeleteBetter yet, suck it all in and we'll do the opposite.
DeleteGMO - Betcha this one runs to the top of channel again soon, then fades back to near the current price.
ReplyDelete2.20?
DeleteYep, that's what I'm thinking. Problem is, today S&P reversed at 1620, which was the upside resistance. GMO has a better chance, if the market does.
DeleteJust watching GMO for the past number of years, it moves up and down in a channel until something happens then the level changes and it goes back into trading the new channel again. Right now it seems to be between $1.80 and $2.20
1620 Well, bears won that little struggle. Too bad for us, we need to retake that number like a hog needs slop.
ReplyDelete1614 was support, we couldn't hold it so now that's the resistance.
DeleteFMD- I have a 2 yr pivot at 1.08. Thus my bid price.
ReplyDeleteprior highs on the run since December. that's where i was bidding today as well. got filled on 14,000 shares.
Deletewhat are the odds we can hold shares til $30?
DeleteZero!
DeleteI can do it, if it happens within the next couple of years. It might present a challenge, if it goes on a dive bomb mission between now and then.
DeleteCp. thx for the new handle I'd
ReplyDeleteI mentioned CYH as a possible buy last week I think based on my AbvGl scan. I bot it 2 days ago at 45.78 and sold half today at my first target at 47.73. Moved my stop to break even
SCTY and SPWR were on my watch list today. They were both up when I finally got around to looking at them so I passed.
ReplyDeleteMoochie, LOL! ;)
DeleteI liked portapotty, ,but that's just me.
DeleteMoochies all wear the same thing, oversize Hawaiian shirts, thick black framed eyeglasses from wal-mart without even a prescribed lens, an oversized fitted hat.
DeleteRalph: "Dude, I see that guy everywhere."
Daniel: "No you don't, he's just one of the moochies, you can't tell them apart."
Think we get a shot lower. Took off the 1.08 block at 1.10. Was hoping for a morning pop to 1.20 ish, but not in the cards.
ReplyDeleteWTH, I send that through and instantly the bid goes from 1.09 to 1.13....your welcome whoever got that benefit
DeleteI still say we go back to 1.07 minimum
DeleteIts a decent down day in the broad market after all.
Deletenow 1.15....im pissed
DeleteSomehow I wonder if we can push price around a little and have fun with it. I don't want to get lose my position getting cute though.
DeleteI say we at least hit $1.03 eventually, probably lower.
DeleteI already have created a buck worth of profit trading it a dozen plus times for gains from .01 to .15 increments. Hold a block or two and trade one. If it goes down, that's OK because we have some conviction with it.
DeleteYeah, earnings aren't till end of July so it probably isn't gonna take off before then. Still can't believe I missed out on YRCW at $5.80 because a snow storm knocked out my power for a couple days.
DeleteStill holding that MUX. It is popping back nicely today after the 52 week low put in the last two days.
ReplyDelete"German inflation pick up relieves pressure on ECB
ReplyDelete11 minutes ago Thomson Reuters"
No need for an ECB rate cut, LOL.
I thought I was so smart selling SNTA @ 4.19.
ReplyDeleteI thought you were going to play the island reversal with that one.
Deletehey at least you didn't sell YRCW at $14...oh wait, nevermind.
DeleteSNE - What price did you guys get for SNE? (Jab, jab, snicker...)
DeleteTreat for the day.
ReplyDeletehttp://www.youtube.com/watch?feature=endscreen&v=5WUeOEkl270&NR=1
Shoot. I was hoping for a hot chick.
DeleteOkay, but don't say I've never done anything for you.
Deletehttp://girlsthick.com/pic_galleries/PlumperPass/Julie-Ann-More/Blowjob-BBW/5.jpg
Boinggg!!!
DeleteCool, now I have trailing stops...
ReplyDeleteEh, no I don't, can't select them yet....
DeleteKNDI: yikes. just found out that my old boss is heavy in that one from $7.30. he was lucky selling FIO, PAY, and PLCM all for big gains literally days before they collapsed.
ReplyDeletefor some reason i'm interested in that one though.
look at that bottoming tail on NOAH:
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=NOAH&p=W&b=1&g=0&id=p07055538656
this is another POS china stock that really intrigues me.
LTON is yet another POS china stock. had a knockout move lower this week that is getting gobbled up. this one has a very similar weekly chart to FMD:
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=LTON&p=W&b=1&g=0&id=p37128394284
FMD is basically where LTON was in Feb 2012...very similar charts.
Close of 1,630 makes this month flat.
ReplyDeleteIm down almost 4% this month
Deletenew post
ReplyDelete