Personal post…
fdjake, Ive sent you 2 pms this week, and would like to get a response from you.
Thanks.
Good call rookie. I was a surprised by the lack of a selloff due to the confirmed deflation and the jump due the lower LIBOR. Any fundamentals that I missed that would’ve caused this rise?
And considering the low volume on the rally, what are the chances of it continuing into tomorrow?
options expire tomorow
i would bet the rally continues tomorrow. for trading today was perfect as rookie mentioned yesterday looked like the close was the buying entry point but it actually was intraday today.
Any fundamentals that I missed that would’ve caused this rise?
Short term oversold yesterday,today was nothing more than a snapback/mini short squeeze…
And I have no clue what tomorrow will bring…You have to keep in mind that there are many hedge funds net short…So if we don’t sell hard we should rally hard…The market is full of extremes as of late and I don’t think that’s going to change anytime soon…Keep the powder dry and take clips if you can…The trend has changed every 24 hours for the last month with bouts of heavy selling…I don’t know when that will stop…I personally feel comfortable making my money and stepping away…My positions that I held overnite ruined my sleep and my morning workout…I was watching the futures in my sleep…Not worth it for the reward…Market is 50/50 at best for a skilled trader,investing imho is nothing more than gambling at this point…The aggravation you will have to sustain to make any return isn’t worth it for me…Everyone is different…
To give an example of the typical portfolio I have tracked this year is down %40+…And a bond fund portfolio is down %22 (-%6 yield)…So if you have a million in the market you are DOWN right now $200,000-$400,000…Thats serious wood…Keeping the powder dry and having the ability to take clips is what these times are all about…Being tied into this market would sicken me if I was the regular investor…Sun Tzu says it best…Stay in recondite silence waiting for the precise moment to attack when your opponent will not expect it…Patience…
Yeah, it hasn’t been good lately… I got off the buy-and-hold train about a month ago when my losses reached 26% and good thing too - that saved me ~20% more losses (go all-stock :)). Since then, I’ve clawed back 5% by using 20% to bet on leveraged short/long positions, but am still down quite a bit for the year. I really don’t understand how people can hold on to their losing positions and expect to ride them down and then ride them up.
When is the next time Bernanke/Bush are speaking? I want to go short and make some money again…
Came into todays market holding 400 Jan 09 QQQQ $25 puts purchased Yesterday near the open at .75.
Sold them all at about 11 am this morning at exactly $1.50 (the market was UP 220 when my sell order got filled)
$30K in 24 hours…But I would not recommend this stuff for everyone.
If I had held on I would have handed back MOST of those gains. Rookie’s right, grab some profit and GET OUT…
HOOSIER,
Sorry man. You and about 30 other people have PM’d me in the last week.
If you want to learn about the stock market READ THE PREVIOUS POSTS HERE!!
Between Rookie, Liquidity, myself, Allagash, and more, there’s a TON info. I must have recommended DAVID DREMANS books at least 100 hundred times here. RE-READ those old posts…the answer to your questions are all in there. I don’t have the time to answer every PM I get.
Jake:
Wow, I didn’t know you were that popular? :cool I remember when you first started on here now you have 30 or so people asking you questions. Here is something that you might not have considered. Write a book on your views of Investing and building businesses. Books these days are so inexpensive to produce and it will save you a lot of time compared to responding to e-mails with topics you have probably discussed already. You should consider it…If you haven’t already.
You are probably just as good, (If not better) then some of the gurus that I have read.
I’d also recommend The Intelligent Investor by Benjamin Graham. It truly is inspiring to hear FD, Rookie, and others discuss their strategies and earnings openly with everyone. Much thanks go out to you guys for priceless readings. :beer
Graham’s book is considered a “classic” something EVERYONE should read.
I’ll give you one more…This book has had more influence on me than anything I have ever read.
MARKET WIZARDS by Marty Schwartz
It’s probably close to 15 years old now, I just re-read it last week…STILL ABSOLUTELY AMAZING!!! It’s a compilaton of about 20 short ONE-ON-ONE interviews with some LEGENDARY traders. Schwartz traded himself so he asks GREAT questions. He also gives you a short back story as to how each trader started. You can learn more from this book than you can reading a 1000 others.
I have a few minutes and I wanted to share some thoughts…At times I feel compelled to convey the downside of trading…Alot of the posts here are those of happiness and virtual high fiving…There is a very dark side to trading,whether it be for a living or recreational…I’m not trying to burst anyone’s dream of being the next Eddie Lampert…The downsides to trading are first and foremost losing money,lots of money…More than you ever thought you could lose…Feelings of sheer anxiety,fear,aggravation,stress,depression…Logging in alot of time behind screens watching data change endlessly for hours…Because as a trader you are paid to capture the moment,and no one knows when that may come…This learning process seems to never end,you just learn when to push harder and when to pullback more…I too like fdjake get PM’s from people here asking how I know this or how I know that…Whether it be a question on trading or an investment standpoint…My feeling is I don’t want any person exposed to this market unless they understand risk management…WHAT I DO IS NOT EASY and most likely if you attempt it you will get b**** cut off and lose $$$$…I have a lifetime of market experience and I have the understanding on how devastating these type of markets can be to a person’s future…Sorry to ramble but I see those posts and wanted to share the other side that you rarely hear about…You can read all the books,look at all the charts,go to every freakin website,go to seminars to all your eyes pop out…And guess what?..It probably wont do jack s*** to help your trading…STAY AWAY FROM TRADING FOR A LIVING OR TO DERIVE INCOME…And if you do decide to try it keep what I said in the front of your mind…To be a great trader you cannot and I stress CANNOT be fearful of losing money…You need to understand proper risk management in order to keep the powder dry…Trading is a zero sum game…
Dave T,
You missed some important pieces in your equation…
First off…You never accounted for the capital outlay TO BUT THOSE OPTIONS. I have 60,000 shares or 600 Jan 09 2010 $7.50 calls. Purchased at prices from .60 to 1.00. IF I had decided to convert all of those options to stock I would have to ADD IN what I paid for those options AND the cost of buying 60,000 shares of Ford at $7.50.
Second…The $180,000 I mentioned INCUDED the cost of converting 20,000 shares at $7.50 ($150,000) PLUS the cost of those options when PURCHASED.
It’s a little different when your ACTUALLY GOING THIS, and not sitting there WATCHING…
I never said I would convert all 600 options to stock. I was using numbers based on a strategy I have put in place to account for various scenerios.
Dave, don’t worry…I’ll be sure and let you know EXACTLY what my percentages are on this investment in about 4 years.
The bigger questions is…
How many shares did you buy coat tailing me into this trade???
A wise man recently told me that the quickest way to become a millionaire in the stock market these days is to start with a billion. :cheesy
I’m a long way from putting any money into stocks right now but I definitely enjoy reading these posts and will read some of the books that you guys are recommending.
jake,
You missed my point.
You said you bought at a 300% discount.
You said you had planned to purchase Ford stock at $7.50 but actually purchased at $2.00 (with rounding). The stock was purchased at a discount from your option strike price, but that discount is nowhere close to 300%, but instead more like 75%. Perhaps, a little more if you also add in the option premium that you already paid for the right to purchase Ford at $7.50.
Think about it. If you go to the store and see an item you want to purchase that is usually priced at $7.50 on sale for $2, the store will have a sign that says “Up to 75% Off Marked Price” prominently displayed nearby. If the store ended up giving away the item for free, then you could probably say you got a 100% discount.
Just focus on the arithmetic. Whether or not I rode your coat tails does not change the arithmetic.
AAAAHHHHHHH HHHHHAAAAAAAAAAA
You DID coat tail me!!!
Just kidding Dave, you are 100% correct. :beer
any ideas on what the dow might do next week? I have been trading DXD quite successfully. It is an ultra-short dow etf
I don’t know about next week but my feeling is we’ll have a period of calm when folks will start to RE ENTER the market thinking the Goverment intervention has worked. REGARDLESS of how many institutions our Goverment hands money to, it CAN NOT stop what I am seeing EVERYWHERE I go…
MASSIVE, across the board HIBERNATION of the CONSUMER!!!
Once this FACT is recognized as a reality stocks will continue their slide.
Besides the sideways markets I think we will experience the next catalyst is the election results…McCain wins we will rally huge…Obama wins markets will crash further…In fact I have been doing alot of reading over the weekend about certain large hedge funds attempting to unwind huge credit derivative positions because they fear they are going to zero…This really makes me wonder about this recovery Buffet is shoving down peoples throats about buying American right now etc…There is no reason to jump into the market other than to boost his positions that are underwater…I’m very curious what will happen once this credit derivative issue shows its hand… $596 TRILLION…Yes with a T…
To those who dont remember the tech crash…The nasdaq was at 5000 ,it went down to 3500 and the world thought it was a bargain and dove in…It then proceeded to 1200…Is the worst yet to come for these markets??..I have no clue…But I can tell you those here that consider themselves traders better be ready to go both ways on a moments notice…I read many predictions and that alone will destroy you as a trader…You have scenarios played out in your head,no predetermined directions the market will move…IMHO charts of the indicies show spinning candles which are typical of direction change…But as we all know technical indicators are difficult to trade on during panic fear driven markets…Also consider the shock selling that may occur when everyone gets the end of the quater statement end of this month…How many people will want to stay in the markets after they realize they lost all of their gains from the last 5 years of investing…
On a bullish note I will make a bold prediction that McCain pulls out a win…And if he does I’m telling you now to back up the truck and load the boat…QLD,SSO will Rip!..The markets do not want Osama to win…No one with more than $10 wants this liberal marxist taking over this country…
looks like the drop / re-test of the lows everyone is looking for are going the other way.
That’s the classic HEAD FAKE, as people start thinking it’s safe to go back into the water they get eaten… just WAIT.