DOW Futures Down 426 AFTER 3/4 Point Fed Rate Cut

Bluemoon,

RookieNYC explained his ENTIRE TRADE to everyone here…

THE DAY BEFORE HE MADE IT!!! :shocked

My god man, how could he possible do anymore for you.

He called it…100% correct. He told us he was going long at the open because he believed the FED would lower rates and the market would rally. He even cautioned that he would enter his positions a little at a time inorder to make sure his theory was right. Because the market broke sharply to the downside he was able to get a HUGE discount at his entry points. Once the market settled and then moved up 300 points he was golden. He further explained he was buying Nasdaq and S&P indexes to do it.

We all sat here the next day and watched as he was proven right.
EXACTLY right.

I’ve heard of people needing to be hand fed, but come on…he can’t make the trades FOR YOU. Most people here probably learned a TON from that single post. I know I did.

It was an excellent day for trading.

Basically the equivalent of a cardiac arrest in it’s first 30 minutes of the session.

I learned a lot.

Cashed out early this morning…112 double cheeseburgers.

Small potatoes…but I’ll take it…was just an exercise for me.

-Mike

Bluemoon,
I’m not a braggart…I can’t talk how much but I did walk through the day 24 hours in advance…Anyone following my lead made a ton…Simply put for you…I bought QQQQ and SPY after the fed cut rates…The market started to dive I bought more and more until I had a sizeable position at 4 different buy prices…I was averaged in well…As my positions went into the money I just simply kept raising my mental stops but the market continued to rally hard…Just as I start to get that invincible feeling and how smart I am nonsense I start to piece my way out of my positions…Hence capturing the whole entire restaurant my friend…You understand that?..Or should I put it on a blueprint for you…LOL… :bobble

Just as I start to get that invincible feeling and how smart I am nonsense I start to piece my way out of my positions

Or as fdjake puts it:

Leave money on the table

Or get slaughtered.

-Mike

I’m not sure if anyone here as been watching the homebuilders,they are on FIRE !!!..DHI,LEN,PHM,RYL,TOL…Talk about deadcat bounces…These stocks have made %25-%50 jumps from their lows…Buy em when they hate em…!!!..I didn’t buy one share of the homebuilders for my personal accounts,only for work…Hindsight is 20/20…I did buy a few very oversold Reits,closed end funds and some royalty trusts that have %12+ dividends…I just noticed this morning that my account was credited for the dividends…Nice way to wake up,money for nothing…

That’s interesting. I’m just watching the home builders, financials, and title insurance companies for short entries. FNF looks like it could be a good short at $17.96 and PHM looks like a short at $14.25. Short stocks and long rentals seems to me the way to go for the next several months (at least).

Mike

Be careful Mike…These stocks are deeply oversold…I’m not saying they won’t hit new lows but the time to short them was 6-8 months ago not now imvho…The short side money has been made already (on homebuilder stocks)…

Homebuilders tough to short now. As Rookie said, all the short money has been made. Nothing like getting into a short late and getting squeezed. I still think there’s a lot of downside to finance companies, more specifically, I think credit cards will get crushed. This will be the next big thing splashed about in the more widely disseminated press. Still think BAC looks incredibly rich. Having worked there in the past, I can tell you that subprime and trading losses, as well as losses on lending are gonna put a serious hurt on the business.

NJREstudent, rookieNYC,

What do you think about buying Green stocks and hold for 2-4 yrs? Comments are greatly appreciated.

So the way to make money in stocks you sit around waiting for an event and then you buy a stock index!? I guess there is really no good way to make money in stocks. What I have been doing is buying retail stocks March 1st (or as close as I can to it) I buy Sears SHLD, Target TGT, Federated Department Stores FDS (now Macys), Macys M, etc. I sell them the Monday BEFORE Thanksgiving. This blend of stocks is always higher that Monday than on March 1st of the same year. It factors in the Christmas hype but takes out the actual performance of black Friday. I have done this for the last 10 years and have averaged 10% (I don’t use Wal-Mart because it is so big and part of so many indexes and mutual funds that it does not behave like a retail stock anymore). I also look at companies that are emerging from bankruptcy. I have been doing this since the mid 1980s. I found that when even bad companies emerge from bankruptcy their stock goes up the day they emerge. When I see that a company is emerging from bankruptcy in the next 7 days I buy and sell it the day they emerge. I have averaged 30% over that long time horizon, but haven’t been doing it much lately. Doing it my way I don’t have to wait until the economy turns, just a few months pass.

I thought that strategy was sporadic and cumbersome. But I guess that is how stocks work. I know why I don’t like stocks. You don’t do stocks you watch stocks. It is like betting on football games. You make a bet and then you watch the game. I don’t bet and I don’t watch games. When the Patriots win a game we don’t win the game. They win the game. The 53 people on the roster win the game. In fact it is not the 53 people it is the 30 or so guys that actually got into the game that won. When I was young I played football through college. I watched games to hone my craft as a player. So that when I was on the field I could use the moves I saw on the TV. Now that I am too old the play I don’t watch others play. That is like stocks, you take a position (like placing a bet) and then you watch to see who wins the game.

In real estate I am actually playing again. When I make money it is because I scored the touchdown, not some other guy scored and I won the bet.

Bluemoon,
After reading your last rant I have come to realize that all you are is a colorful character on this forum, a stand up philosopher…I will no longer take you seriously,whether it’s your constant reminder of the engineering dream you live or maybe how important you were back in the day…Please keep up with the posts I find you extremely entertaining…I’m almost at the point where I actually pity you truthfully…

You are so right…so how do you have the Patriots or the Giants?

I’d like to see Brady take one on the chin…And I’m not a Giants fan…

quite interesting thread…

i wish i had become a trader of someone else’s money. had i known what a trader was when i was, say, 11, I’d be one now. Instead, I knew what a computer was, hence, I’m in the IT world making much smaller bonuses.

So, since I’m an average guy, I kinda agree with Bluemoon’s take. It would be MUCH harder for me to make $1MM trading stocks than investing in RE, because I cannot get the leverage nor the information to buy enough stocks.

Yes, I can get pretty good returns using a DCA model to buy funds to hold for the future, with an expectation of an increase in value of my overall portfolio. However, I don’t know how to buy stocks at 30% - 50% discounts, financed at 7%, like I do homes. I don’t know how to find a distressed stock, determine it’s ARV, and fix it up.

Traders are not average people who invest. Traders are specialists who get paid to make the right decisions with OPM.

Rookie is right… Hired traders make a killing. The people they trade for make more. Traders who make a lot trading for others have the skills, tools, and funds to make good money for themselves.

Bluemoon is right… Most people aren’t traders and do not make trader-like returns in the stock market. Most people are investors looking for a relatively safe and predictable return (S&P average). Most people, myself included, are very unlikely to become wealthy trading.

I have a job. I invest in both RE and equities. I am not wealthy. I believe I can control the RE investment process to a great extent and for a greater return than I can the equities investment process.

Neither is ‘simple’ but RE investment has a much lower barrier to entry (in my case, good credit and education about how it works.)

Feel free to tell me how I can use my good credit to control millions of dollars worth of assets with limited down-side risk. I don’t care if it’s equities, real estate, automobiles, textiles, or whatever. As long as it’s legal and makes money.

bdub,
Everyone works toward a goal in life…My father builds high end homes his entire life and absolutely hates the stock market…He often says I could never do what you do,meaning risk arbitrage like me…People only see the money and don’t see the stress involved…Everything I learned in my career was self taught(books,internet,asking questions,working along side top traders etc)…There is no school you attend for traders etc…It’s the school of hard knocks…Just like I asked questions here to propertymanager about figuring out rent rolls,buying,selling etc…It’s the same thing I did many years ago to top traders I wanted emulate…Trading takes heart,passion and discipline…Same as RE investing…

So when people say “oh the normal guy can’t do that”…Thats total BS…There is no can’t…I started from scratch and worked my way up the ladder to risk arbitrage management…So it annoys me when I hear nonsense and misinformation from people who clearly have zero clue about the market yet they feel compelled to spew nonsense about something they clearly know nothing about…

When I first came to this forum I was questioning how people made money etc investing in real estate because of the bubble prices etc…After I gave up on the “I can’t babysh**” and started to read and ask questions I started to see angles that worked…Now a year later I have 18 units,and they were all bought very well and cashflow great…Point being I ask questions in a humble manner and as you can tell from my screen name I never wanted to give the wrong impression about my RE knowledge…I wanted to learn and continue to do so and even now I still IM Mike(propertymanager) for guidance…

I’m here to help anyone understand the markets but I have zero tolerance for know it alls who don’t know jack about the markets making comments that are ridiculous…(not referring to you)

Feel free to tell me how I can use my good credit to control millions of dollars worth of assets with limited down-side risk. I don’t care if it’s equities, real estate, automobiles, textiles, or whatever. As long as it’s legal and makes money.

There is no way with no money…Unlike RE,stock trading takes capital…And there is no such thing as limited downside risk unless you like money market funds and CD’s…You want returns ,you assume risk…Point blank

i wish i had become a trader of someone else’s money.

I trade my own money and firm capital…When I post ideas here it’s what I’m doing with either my own capital or the firm’s capital…Either way it’s no different to me…I want to be right when I trade…

Rookie,

Thanks for posting in this thread. I realize that it isn’t RE much, but I learned much from your posts. Don’t let Bluemoon sour you.

People don’t realize the amount of guts it takes to do what you do. You said that it takes a lot of nerve, and that makes me smile. What an understatement. You were adding to a position that had the market sliding away from it for a while, buying more as it went against you. Until someone actually does this they don’t know if they can, or if they will fold up at the wrong time. I trade commodities, both for risk management ( I am a farmer and raise crops ) and for speculation. Most of these things look fairly easy and straight forward after the fact, but not in the middle of the trade. In the middle it takes “a lot of nerve”. I learned alot about myself in the speculating arena, both strengths and weaknesses.

The problem with trading is that it not an engineering formula that you follow to 100% returns. It also is art and that means you are trusting your intangibles as you make decisions. That takes many people out of the game.

DB

Homebuilders are on fire…The market is on fire…I hope everyone is enjoying all the free $$$$ I gave out to this forum…Buy em when they hate em…I will keep saying it until you have to pump oxygen into my big mouth…

Today is a day you SELL stocks…And when the market was crashing for multiple days thats when you buy…Keep it simple…

When is the end of the world coming???..Where is the stock market crash to zero???..

That statement scares me …I think that fire may be under control…

Did you see the jobs report this morning??? First big drop in 6 years!
Many more of these to follow.

The market doesn’t have to fall to zero to CRUSH a whole lot of people playing the game. As a matter of fact, THAT IS EXACTLY what crushed the markets (and investors) in 1929.

The market had been moving with high levels of volatility (like now) prior to the BIG ONE. Lot’s of people watched those patterns develope and played it, buying on dips. When the plug got pulled for the last time a whole lotta of people got left holding an empty bag. Sort of like all those people who were last in line for Florida pre-construction condos. Someone is ALWAYS left holding a steaming bag-o-sh*T.

I’m not throwing rocks at you here Rookie, I say this as a warning to others here (me included) who will try an emulate your success… This is a highly specialized way of investing…if you can’t SEE what the market is doing RIGHT NOW (or BEFORE they move) and make a decision IMMEDIATELY… YOUR DONE. The market moves right past you, and it’s all over. The even BIGGER part of that equation is KNOWING before hand, EXACTLY what you will do IF YOU ARE WRONG!! This is key. I’m sure you would admit that you are wrong on many occasions.

Not a game for amateurs…

Good post fdjake…

To add to that:

http://money.cnn.com/2008/01/30/news/international/okeefe_rogers.fortune/index.htm?postversion=2008013109

Here’s '70’s chart of the DJIA:

http://bigcharts.marketwatch.com/charts/big.chart?symb=djia&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&size=2&state=8&sid=1643&style=320&time=20&freq=2&nosettings=1&rand=7363&mocktick=1&rand=5362

-Mike

I’m not throwing rocks at you here Rookie, I say this as a warning to others here (me included) who will try an emulate your success… This is a highly specialized way of investing…

No offense taken at all…I totally agree with you…This is not for amatuers or those playing with scared money…This is advanced investing on a speculative level…Not for the faint of heart but the tables are turned in your favor when you understand the markets…I said it 10x in various posts,STAY OUT OF THIS MARKET IF YOU DONT HAVE DECADES EXPERIENCE…But if you do have the experience and cojones and the money there has been some mind boggling money to be made in the last 2 weeks…And for those who don’t read headlines being a contrarian investor is highly lucrative…

Also for the record I’m long term bearish…I just want to take advantage of the recent freefall then parabolic bounce…My long term view is still down for the markets and I never marry myself to any index,stock…I have levels in my head for anything that I own…Profit levels and loss levels…Keep the powder dry I agree,but when the right moment arrives it’s time to put the wood on the table…