Wednesday, May 28, 2014

A Response to a Kind Letter From an Old Trading Pal

Edward my friend great to hear from you! Yes, I did pull a Mosquito Coast but decided not to go so far as to build a Utopian society in the Honduran rain forest. It was tempting though, but leaving the comfort of New Jersey's friendly, down home citizenry and my lack of leadership skills deterred me.

My wife does not let me near the restaurant! And it's a Catch 22 anyway, as if I tell her what to do and by luck I turn out to be right, she can't do it then (anti-logic laws of marriage). But she is doing great at it, has a knack, and people really enjoy the ying-yangedness of the food (healthy salads and tasty baked goods).

I got a bit lost Edward. I committed one of the 7 deadly sins of trading, and went and got all existential. I asked the big questions...why do I trade? Do I enjoy it? Am I doing a net net good thing, or a net net bad thing? No, no, no, no Paul. In life, and in trading, never ask "why" as black is black, white is white, and the sky is blue. It all is what it is, and make of it what you will. I was reminded of a Richard Feynman quote through all this. "Nobody ever figures out what life is all about, and it doesn't matter. Just be sure to enjoy your time in the sun".

So I lost money for six months, not a lot, but I lost. All through it I am asking myself why am I losing money? Silly Paul, asking a silly question. Rule #342: Be sure to always ask yourself, what is it that I am seeking from trading today? If the answer is not profit, go spend the day skipping through green pastures and picking daisies.

Ha, the Minuteman cockpit!!! I love it, and I have been pursuing a similar agenda. I no longer sit at my trading desk 8-9 hours a day, because yes, it's really bad for us physically and clearly lends itself to fucking up good trades. In a questionnaire to traders at his firm, Paul Tudor Jones once asked, "are you glued to the screens all day long, second guessing your analysis?". I have also thought recently of purchasing a stand-up desk, as the C-shaped spine and shoulder tension just get old after a while.

There does seem to be a migration of the "less than desirable" types from the Yahoo messenger boards to StockTwits. I've been attacked a few times, and ah what fun it is! I think I retorted to one some quippy piece of nonsense, and my Id or Ego or whatever felt good for 3 seconds. The Internet has taught us many things, not least of all that there are many angry, insecure people in the world. More than we originally thought. We Americans are optimists at heart. But this poses a fascinating business issue to the people of StockTwits. The more eyeballs the better, right? But, at what cost to the individuals who are adding value and providing excellent content.

So I am good Edward, and thank you for asking. A couple of visits to the shrink, a new Med, and clear sailing for now! My game is back on, I think, and my analysis is sharp. My execution is improving by the day. I even started smoking weed again after a 20 year hiatus. I'm a sucker for new, popular trends. But, I must say, it has just allowed me to put the trading day behind me. No obsessing and second guessing. I did my best, onto the next thing. It clears my head, and allows me to explore new and fascinating things like my 5 year old son who makes me laugh every day.

One more thing sir. I've often thought of making a documentary on trading, but I realize that idea's time may have past. There have been many. I'm more interested in the life side, and not the trading side, but who knows. Give me a shout should your creative juices ever inspire you in such a direction. I know, I know...you've been there, done that.

Kindest regards to you and yours my friend.

Paul

Friday, May 23, 2014

Make Love (Money), not War (Losses)

I was born at night, but I wasn't born last night. What's the easiest thing in the world to do right now? Get long long long!!! My head was ringing with 90's aphorisms last night, "either you're long or you're wrong" was my favorite. Who could forget the goofy 90's portfolio managers coming into our trading room, shouting "what's up brutha'" at a male soprano pitch the way only a 40 something white guy could. Even an older portfolio manager at the firm wrote the book "DOW 100,000"...not kidding, look it up. I was happy last night, because everything worked yesterday for this mostly long schizo. I think I might have even bragged mildly to my wife, which led to her asking me if I was o.k. Sure baby, I'm fine the gold rush is back on, nothing but good news from here on in.

I waltzed outside across to the neighbors house at about 2 p.m. yesterday to see my son who was playing with their kids. The Colombian nanny had a bikini top on with her tits nearly slapping the children's faces when she corrected them. I'm thinking, holy shit, ofcourse long is the right trade...summer is here, the grills are being dusted off, and the boobs are bouncing. Even Vladmir Putin would be happy. And I know next week's game like I know myself. I've spent my share of 4 day Memorial holiday weeks shorting as the market went up each and every day. I was young then, and I still had a brain, but my summers were ruined in one short stupid holiday week.

You see, I never understood nuance as a young man. There is no black or white, wrong or right, and there is no truth. The truth changes and moves in life, and more so in markets. I am Ying now and the market is Yang, I don't fight it anymore, and it is what it is and does what it does. There is one thing, and only one thing, that the market does not care about in the least and that is your opinion and belief system. Markets have their own ideas about how things should work, combining Einstein's brilliance with Van Gogh's schizophrenia. The messages are often hard to read sometimes, but sometimes they are obvious. Kind of like now.

O.K. enough of the philosophical mish mosh, speech from a podium shit. I'm calling for peace on StockTwits. A truce on all the petty slapping contests that populate their servers every day. Just make a little dough, the pool is warm and big enough for all of us! You could even get long Japan $EWJ with $.30 cents of risk as it breaks out of a 4 month downtrend. It's perfect to, because no market gives a crap about the other right now. $FDX and $AAL don't care about $USO breaking to new highs. No market is even looking at the faltering Euro which seems to have decided to take the summer off. This is definitely the "Fuck It" market as divergences are showing up more often than me at the food pantry in my house. So, you know, Fuck It and buy something.

Thursday, May 22, 2014

I Need A Dollar, Dollar...a Dollar is all I Need

I must be girding for a fight. My last piece on shorting NUS and dissin' Carl Icahn was met with a couple of jabs at my delicate psyche. C'mon guys, I'm a trader. I sway between thinking I'm the man and thinking I should kill myself 3 times a day, and I couldn't say "it was a good day" if someone paid me $5,000 to do so. An older, wiser friend once told me traders can never be happy and ten years later I finally understand what he meant. I routinely give my wife the option to divorce me, but she never takes it. She says I'm "talented" and that I make life "interesting". My internal turn everything into shit brain software takes that as I'm "falling short of my potential" and I can't get through a day without 3 manic episodes.

I mean we all want to slit our throats sometimes, sitting at our trading perches, alone, while over-dressed caucasian yuppies and Asian femme know nothings spout ideas on CNBC with a certainty that rivals a Presidential State of the Union address. I can say this without racial accusations as I am white, my wife is Asian, and my son is both. "These CNBC mother fuckers" I whisper under my breadth, alone, who the fuck pays them to talk out of their asses? Their resumes are probably on Monster.com. Then I settle down, realize how lucky I am with my beautiful wife and 5 year old son who saved my life. Without them I'd be in a ditch alongside Rt. 9 by the Meadowlands in NJ or even worse working at Starbucks or Subway.

I have to say, in all my rage, I really do like people. I've slowly realized over the years, that there are so many people out there who are smarter and more talented than I and who are willing to share and help. They are hard to find sometimes because mostly douche bags do the heavy marketing, but they are out there. I love hearing ideas from other people whom I respect, sometimes I wish they would talk and share more. There are some great people/traders in Drasko Kovrlija's @NoanetTrader member room. I talk too much and I wonder if I shut the fuck up once in a while, I might learn more. Most people don't share out of modesty, or because they don't think their ideas are good. But they are!!! Most of your ideas are good, but the trading demon in us all injects doubt. My wife always says to me, "beat your demons". I will, and so will you. Sorry for the rant. Enjoy!

This hotel scene from 1979's Apocalypse now I thought is so analogous to trading. Martin Sheen's physical tirade so reminds me of the mental torture we must all endure before we meet our true trading self.

Friday, May 16, 2014

Take a Chill Pill

I had fun last Saturday night. A friend and I took our wives to dinner at my Golf club and then watched Seth Rogen's new movie "Neighbors". We smoked some weed before the movie in the parking lot like a couple of teenagers. Watching Rogen's perfect character blend of male stupidity and a guy with a big heart was a much needed relief. He plays a 30ish husband with a newborn and an un-defined job in a cubicle who is trapped between the impending responsibilities of marriage and child rearing and the reminiscent freedom of youth, college, and living purely in the moment. If you can't identify with that you either have no pulse or are an Investment Banker.

I even left my trading desk at 3 P.M. the last two days to play golf. I got in 18 yesterday and shot a 77. I was happy. I'm not going to let this difficult market with more unclear signals than a third-world city un-nerve me. I'm not going to obsess on it, the mistakes I've made, and perpetuate the self-loathing. This is because I know this type of behavior is not only a waste of time, but will most likely result in future losses and frustration. I used to occupy my head 24/7 with stocks. I don't do that anymore and I'm a better person and trader. Most evenings these days I choose "Family guy" or "Burn Notice" over Chart analysis.

With equal fervor, I could either tell you this is the absolute end to the bull market or simply a pause that refreshed. I won't waste your time. These are the days where your risk-management models shine and your stock picking models are irrelevant. Let time pass and just as sure as the sun rises and sets, easier trading times will arrive at our front door. In the meantime, get your mind off the market and do something that relaxes you...I mean, really relaxes you.

Wednesday, May 14, 2014

Meet the New Skin it's the Same as the Old Skin

Bill Ackman must be right, these stocks trade like they are a fraud (HLF, NUS). This codger Icahn is a little wacky when it comes to HLF if you ask me. Its hard to take a guy seriously that talks to "Fast Money" on CNBC during lunch hour. Doesn't he have more important things to do? His Twitter account is entertainment along the lines of TMZ, I'm ashamed that I follow it. Maybe this HLF thing is just a prank on Ackman, a comedic score to settle with a kid he seems to hate.

Now that the S&P has made its anti-climactic rise to new highs, I thought this long only guy (me) would take a stab at the short side. I'm desperately contrarian at times, my mother must not have hugged me enough. In a discussion about life, stocks, and human psychology last night, a Psychiatrist friend told me that the most obvious solution to a problem is usually the best solution. I proceeded to say defensively, "well then, my life of rumination and exploration between the lines has been a waste then".

I took a trading lesson from that discussion, albeit an obvious one. I, and many others, are guilty as charged in ignoring what's right in front of us when it comes to trading. We all have the capacity to comprehend what's going on at any given moment in the stock market. It not so much requires raw intelligence then it does clear thinking. I would trade many points of my IQ on any day of the week for being able to truly see things as they are at all times.

Tuesday, November 26, 2013

20 Stocks Under 10 November 26, 2013

1.  ACW:  Emerging from over-sold RSI, MACD cross, volume, and ready to break above the 20 day at 3.50

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2.  AEZS:  Volume comes in yesterday after stock offering killed this one.

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3.  AVEO:  RSI breaks above 50 and volume comes in to move stock over 50 day.

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4.  Volume came in yesterday after somebody disclosed a stake.

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5.  BODY:  Great volume last week.  Early Nov. pop was news of insider buying.

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6.  CCXI:  Stock has some volume coming in and forms a cup going back to early Nov.  Volume break above 5 could be interesting.

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7.  DRYS:  Nice coil around 20 day that is turning up but stock needs volume.

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8.  DNDN:  Solid volume last week, stock forming cup and handle here.

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9.  CYTK:  Nice Nov. consolidation to break out of.  RSI looking to break above 50 just needs volume.

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10.  DSCO:  Decent volume yesterday, RSI/MACD turning up.  New equity issued end of Oct. and big gap early Oct. was FDA decision.

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11.  GFA:  Brazilian homebuilder w/ volume and upswings in RSI/MACD.  Above 3 and 50 day could get momentum.

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12.  KIOR:  I like that its lousy earnings on Nov. 12 didn't ding the stock.  Upturning 50 day provides nice support.

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13.  TRMR:  Video ad. Co. cratered on earnings.  Cup w/ handle on 30 min.  Only will buy on S/V above 4.35 area.

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14.  ZIOP:  Great volume yesterday, all systems go here.

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15.  GSAT:  Nice chart but needs volume.

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16.  GTXI:  Nice break out of consolidation.

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17.  IPCI:  A boomer on commercial launch of Attn. Deficit/Hyperactivity disorder drug.

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18.  MNKD:  For a trade above 5.

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19.  MITL:  Looks ready for higher after huge volume surge.

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20.  NAVB:  Some volume after earnings puke.

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Sunday, November 24, 2013

Sunday November 24th, 2013

DECK:  28/A-/A-/75/95

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ENDP:  83/A+/A+/95/97

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ETFC:  77/A-/B/83/93

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JKS: 78/A+/B+/97/99

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AKRX:  90/A+/A-/99/95

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CALD:  51/A+/A+/93/98

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LCI:  78/A/B+/99/99

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LVS:  98/B-/B-/99/86

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MEOH:  99/B-/A-/97/94

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ADP:  65/A+/A-/89/74

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ALXN:  99/A-/B/98/77

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ECL:  91/C/B-/93/83

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FLS:  83/A/B/92/84

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IR:  56/A/B+/80/76

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