Wanna Be Investor

Stocks are not Equity

2011-11-10T13:44:00.000-08:00

I haven't been posting to my investing blog because I haven't been investing. I'm up to 75% cash on my personal account, not optimally timed exits but not terrible timing either. Sold my TDG too early but my RIM was well timed. Hanging on to smaller positions in NRG, CJT, and AMD.

I made a personal decision to focus on my career as a financial wizard of sorts rather than battling it out in the pits of my retail equity and fx accounts. I have built up momentum at my workplace and I intend to ride it out which requires more of my focus. I will be back to slaughter the pigs in public equity markets when they most expect it but are too paralyzed by greed to do anything.

Now on to the title. Stocks are no longer Equity. Equity represents a fundamental underlying interest in a company. While owning a stock grants you the illusion of owning equity, the truth is that is empirically a lie for retail investors today. The real equity that I have is myself and the value I can create with my sales/math/programming/brainstorming/communication skills.

Perhaps this blogs time has come to an end. I have failed at long term passive investing, market conditions over the past 4 years are no excuse. When I return to the market I will be a speculator.

Haters gonna hate

2011-10-04T06:41:00.000-07:00

Damn this market sucks. I am down as an investor, most of my stocks have been personally and individually knee-capped by god/satan himself. The ones that have survived were handicapped to begin with. But I will not sell into fear. I am becoming a man of principle, I don't care what it costs in the present because I know what it will be worth in the future.

All You Can Eat

2011-08-25T07:12:00.000-07:00

Buffet. Buffett.

Can words describe this deal? 5 Bills of preferred equity and 700 Million warrants at 7 bucks. Get out of town. Shut the front door. I'm still down and out on BAC but it's retribution enough that bears are being impaled skyward by none other. What else is there to say? The man's a monster.

Where's the red

2011-08-16T08:20:00.001-07:00

You call this a down day?! If you don't know who I'm talking to it's safe to assume it's the American media because they are the easiest target on the planet.

C'monnnn. We're not even down 1%. Everyone knows last week was just some trillion dollar shennanigans. And everyone is mad about it. Mad that they got scared out of their positions. Now they want their money back. Even if they have to rally this mother trucker past previous highs.

Let it be known

2011-08-10T06:05:00.000-07:00

I made money shorting the swiss franc yesterday. The swiss franc rallied 5% vs the US dollar yesterday.

This needed to be chronicled as evidence to my "give me a market and I'll give you a profit" mindset. Tight stops and balls of steel.

Ideas are scaled by execution. Even a bad idea can be executed into a profit.

World Ending

2011-08-08T11:34:00.000-07:00

Here's a math problem for you, if we go down 5% a day every day, how long does it take for the world to end? Answer: Next Month.

This shit can't continue. It's literally hysterical. I didn't get out last week, and I should have because I am small and liquid. I won't sell here because I do not like to wear mine or anyone else's ass for a hat. I would prefer a coffin first.

This drop is so unlike 2008. We've seen it before. Let's head down.

Choppin

2011-08-04T06:15:00.000-07:00

Took just over 10% of my portfolio and bought RIM shares with it yesterday.

A lot of people say "Why try to catch a falling dagger?"
To them I say "Why not, are you afraid?"

It's clearly a value play. I could lose all my money in a year if RIM gets dominated by APPL and whatnot sure. However, RIM doubles in price as soon as it so much as sneezes a profitable new product. I like RIM management, they've shown they can stick to their guns. I would like to think these guns can blow the limbs off of short sellers (mostly americans and/or foreign institutional investors that underestimate the human capital pool RIM has access to).

I hated RIM for a while, then I got over it. You will too.

Boom! Headshot.

2011-07-22T07:23:00.001-07:00

AMD up 15% as of 5 minutes into the future. I'm holding because I care not for spurious events and have greed in my veins. I believe this is a catalyst to continue to move higher. Stupid, silly analysts. I could do more analysis from my memory on the back of a napkin at one of your petty american fast food restaurants.

Feels good to win. But not too good. Never good enough.

One Shot, One Kill

2011-07-20T13:24:00.000-07:00

Speculation at its finest here folks. AMD announces earnings tomorrow, had a bearish beatdown over the past month, has strangely traded upward this week, like a cat sneaking up on a mouse.

I got long and strong AMD today. I see it going to $9 with at least a 50% probability, and barring the whole market going materially lower I don't see it south of $5. It's just math, don't take it personally.

Updated 4 hours later: Intel Posts Record Sales, earns normalized 0.59 per share vs 0.51 analyst estimates

I was Dead Wrong

2011-07-15T10:56:00.001-07:00

About BAC. Bank of America. What a piece of crap. 12.50 Jan calls virtually worthless. I admit all this on the day BAC breaks $10 on the downside because that was my target to recognize the loss. Not a monetary target, NAY! Money is for the common folk. This loss is far worse than that, it is one of pride. I thought I was fighting the good fight, buying America. Bank of America. You can now buy a piece too, for only $9.99. This price happens to correspond to a $100 billion valuation. How foolish was I to expect something like a national bank of the great American empire to be worth more than something like a social networking website.

Facebook and Bank of America have the same estimated value right now.

Yes there are plenty of good reasons for this, but just take a look at that line again tell me something inside of you doesn't find this rather absurd. Don't worry about me though, I'll get mine. I'm gonna go all nutty and start wearing bow ties and buying/drinking high quality oil on the daily.

Who Cares

2011-07-11T11:10:00.000-07:00

Instead of being frustrated by the sluggish market and doomsday scenarios I'm just ignoring them. It's becoming pretty clear that calendar 2011 is going to be one of THOSE years. The ones that you look at in recoveries and think, "Hmm! wonder why that happened..". Human nature likes to find things to worry about when it becomes impatient.

We go down until Sept-Oct and then come back up when the economics turn out to be stalled and not downtrending. Look for seasonality similar to last year.

Please Sir..

2011-06-15T12:52:00.000-07:00

May I have s'more?

It's an grueling market out there for the bulls right now. But I just so happen to enjoy gruel. I have stayed at 30% cash while the losses from my longs / calls are bleeding the life out of my portfolio. However I am not the boy I once was; getting all up-petty at the nearest 20% portfolio drop and doubling down. No, this time I shall wear my losses as face paint for the battle ahead. I hope we see a serious spike down, then I will look to enter.

Didn't miss much

2011-05-16T08:05:00.000-07:00

As far as being a position trader/investor/primate is concerned, I haven't missed much the past couple weeks. Some commodity traders and homeless men traded places. Woohoo.

Is it just me or is does anyone else think that nobody really wants to pay for their groceries in silver/gold shavings? Does anyone else see the disconnect between the more and more digital age we are surrounded by and the medieval gold and silver days? Some of the hottest companies today essentially sell well placed electrons. Yes that's an understatement because those electrons convey information. The point remains, and has been proven, information is currency. What information do gold and silver provide? What is the real value in their utility?

Got stuck on the gold tangent. Damn it.

Run for your life

2011-04-18T06:59:00.001-07:00

I want to get 100% cash right now. I feel like this market is manipulating me into selling my positions. I wish bank of america a slow and painful death and it will be my pleasure to join them. If I sold today it would be mostly based on emotions, therefore I can not do so even if it is the right move.

Don't Slip

2011-04-12T18:08:00.000-07:00

The breadth of the downturn today is quite impressive. Being heavily long oil I am down somewhere between 3% and 4% today. Tomorrow will be an informative day but I don't see myself selling very much. We are about to turn the corner into earnings season in a bull market. I'm 20% cash with the ability to raise funds if the market chooses to fight me. Because the market isn't fighting me; it's fighting itself.

Depending on what tomorrow looks like I will consider allocating cash, probably in US refineries because that seems to be the unstoppable trade right now. Wouldn't look to hold beyond July though.

It's the climb

2011-04-01T07:27:00.000-07:00

By looking at the monkeys on CNBC you could probably figure out that we are going up. What's left to do? Sell? Who wants to get short this market? What do you think institutional money mangers are thinking en masse? What is the economy doing?

I ignore the rhetoric in the media and focus on answering these questions.

This question I ask myself a lot when it comes to sourcing motivation around uncertain events. You can apply it to the bulls and bears if you wish.

Who's starvin' more?

Where do we go from here?

2011-03-08T11:37:00.000-08:00

This Dow 12200 and NASDAQ 2700 is becoming old hat. It feels like we were over at a friends place for dinner, had some wine, played some cards or talked about old times. Now it's getting late and we're just talking for the sake of talking and nobody wants to be the first to get up and leave because maybe the night will get interesting again.

That is what this market is like. Nobody wants to drastically change their long/cash (if you're short, god be with you) positions for fear of missing out / overcommiting.
One side is stronger than the other; were headed higher, this party is gonna be an all nighter. It's just a matter of time.

You don't need fundamentals if you have psychology, and you don't need psychology if you're crazy.

Chit Chat

2011-03-04T12:54:00.000-08:00

A convo I had with a friend today:

Me:
if only bank of america could stop bankrupting america

Him:
financials have to be your worst sector

Me:
i actually am about even
up marginally perhaps

Him:
disbelief

Me:
yes, from the very start
jan 08
i made 2 5000$ transfers
into us funds
and paid a horrendous 30$ a trade cause i was a noob
it has been solely long US financial equities since then
and i am at 2.80*3000 + 1200
which is what.. 9600
im down 400
4%
probably mostly transaction fees
thats the kind of stock wizardry i am wielding over here

Can't Go Wrong

2011-02-14T14:17:00.001-08:00

Finally I know what it's like to be in a "Can't go wrong" market. I dare not touch my positions for fear of missing out of the next double digit jump. I speak in old tongues to myself when looking at my portfolio value. I think about ways to lever my leverage. I am 100% positive that I will see the peak coming far ahead of time and will perfectly time my exit like I am George Clooney robbing a Las Vegas casino. Invincibility is yesterday and inevitable is tomorrow.

Doesn't Hurt

2011-01-31T11:01:00.000-08:00

A little luck never hurt anyone. Intel comes out and announces an erroneous chip the week after I get long AMD. Can't complain about that. The nominal amounts are fairly immaterial for Intel but the momentum it gives up to AMD's side of the court is what really counts. AMD was already looking for an excuse to pop, now it just needs to have the support to stay popped and then explode via actually making a sizable profit.

Personally, I'm thinking of taking some cash outta the market and buying some good ol' fashion real estate.

Not a loser

2011-01-27T06:59:00.000-08:00

You don't have to be first to be a winner. That was the thesis of my purchase of $10 Jan2012 calls on AMD yesterday. They just need to keep their market share and their price should rise with the market. Upside is, if their GPUs do what they intend to, they could gain market share and open up growth opportunities. Equity investors love growth opportunities. Stock price doubles and I slam home a 10-bagger. There has to be a 10% chance the price double from current levels for me to be happy here, and at the moment I'm a happy camper.

disclosure: The future is bright until you have lost all your capital. These posts are for my future credibility as an asset manager. I wouldn't follow a noob and neither should you.

It's not a tumor

2011-01-26T06:59:00.000-08:00

I should get involved with stock twits or twitter due to posts like these.

NYSE:NRG looks good. I've been with it through the downturn and was thinking about adding to it. Finally buyers are around, could go to 24-26 in next 2 months.

disclosure: I own it, don't take my advice.

Cut em loose

2011-01-25T10:38:00.000-08:00

I'm done with this BAC drama, it's like a bad relationship for me, I just can't let go. I was sitting pretty now my profits are down but still above 25% on the position. I won't let them get below that. I won't.

In hindsight the smart idea instead of writing a dumbass post about BAC DEFENSE I should have had the inclination to buy short term just out of the money put options when the earnings came in as horrendous as they did. Now we all must pay for my investment sins because had I done that the stock would have stayed put.

I am not letting this position become a loser. Like a 6th grader in the war against drugs and strangers, I will just say no.

BAC DEFEND

2011-01-21T07:01:00.000-08:00

I am truly sorry to keep ranting about Bank of America but the movements in the price of their equity vs. the market at large and their financial results are, I find, quite interesting.

Take their release this morning of Q4 '10 results. 2 Bils of goodwill impairment. 16 cent loss for the quarter. I saw this and naively thought it was time to sell, time to pack up and head for the hills. How foolish of me. I took one look at the premarket action and knew what was going to unfold. BAC losing money for all eternity is somehow already priced in.

BAC will lag, but hopefully not terribly so. I plan on getting out when they show another overextension like last week.

BAC ATTACK Continued

2011-01-14T11:46:00.000-08:00

I seldom celebrate victory. That being said it is important to cherish victory occasionally. With my Bank of America (BAC) calls up almost 100% now, I write this BAC ATTACK as a toast to the American financial system. May you remain, Too Big To Fail. Cheers.

BAC Bacon

BAC to reality

BAC to basics

BAC to business

Here's a link to reasoning behind the gutsy investment decision. It's a good read.

EUR/USD

2011-01-13T07:25:00.000-08:00

I can't not blog about this. The EUR is lighting up the USD like a mf'in christmas tree. I was short the EUR and got out for a 35 pip loss at 1.3030. I figured it was good risk management as even though the EUR was fully expected to continue downward, it was worth negating the risk of getting squeezed. Then it began. The 300-pip--slap-the-tits-off-yo-gramma rally. I mourn for those we lost. If I was smart I would have got long with a tight stop.

There will be a retracement but when/for how long/and is it worth it? Those are the questions to answer. I'm not getting back in until this beast shows signs of reason instead of the murderous treason it inspires on a 5 minute basis. Fear the beast. The EUR/USD beast.

2011 a-go

2011-01-04T09:26:00.000-08:00

Stocks have been given the green light to go higher. Nobody is surprised by this. The term double-dip has returned to reference veggie platters and salsa chips, where many sane people believe it will stay. The last 90 days have been kinder than all previous periods of said length, in terms of the market value of my equity accounts.

I am quite comfortable letting it get to my head for the time being. I will need the confidence to buy out of the money calls on stupid names with mild chances (mild but not minute) to double or triple. If this year is as the scrolls of the internets have foreshadowed, there will be gains.

Image this: It's Dec 31st 2011 and equities have rallied 20% over the year. You look back at values on Jan 1st 2011 and think, "How did I miss that?"

That is what people are thinking right now. Nobody likes missing the imaginary mean reversion bus.

I don't write this to make sense anymore. I write it to make money.

Breakout

2010-12-06T09:21:00.001-08:00

TDG.TO

Disclaimer: I own it.

BAC ATTACK

2010-12-02T07:28:00.000-08:00

Get BAC here

BAC Off

BAC the truck up

BAC slap

Double bottom setup. Leverage is a must. I said it and I don't yet regret it.

I Suck

2010-11-26T08:04:00.000-08:00

Dear Future Me,

I'm a crappy stockpicker. I only have 3 years of two-bit experience but my current efforts lead to crap picks. There is no denying it. Don't think it's just me either, because you suck at picking stocks too. Remember when you wrote this post? Why did you write it? Yeah, that's right, because you suck at picking stocks. Aside: I need to be repetitive to myself because I know future me won't get the point otherwise.

Now I'll give you some credit, you had good ideas, and some of them panned out, but the ones that did had an expensive opprotunity cost and the ones you didn't pull the trigger on did relatively amazing. This is not just 'the grass is always greener' syndrome. You messed up because you were a lazy-no-good stockpicker and were too cheap to pay the transactions costs of re-allocating, too lazy to get the proper approvals, and too scared that those costs and the work that went into the move would be all be in vain. It was fear of failure that held you back. Don't try and explain it any other way, because that is the simple truth. I hope you are better at correcting these problems in the future. For future, future me's sake.

Do What?

2010-11-10T12:03:00.001-08:00

No more than one minute ago I had this gem of an idea. I give it here freely so that I might chuckle to myself in the future.

Buy things nobody understands.

Just that. That simple. The exact opposite of buying something that I completely understand is buying something that all or most people do not understand.

Party Time

2010-11-04T12:10:00.000-07:00

I post so infrequently because most of the time I just don't have anything to say. I don't invest on a day to day basis. My opinions are home-brewed or slow-cooked, if you will. Right now I see equities going up in 2011, maybe even 2012, breaking previous highs. 15% of my portfolio is levered to the gills in BAC. I think The Fly said it best when he coined the phrase "BAC attack". I'm long an oil driller in TSE:TDG and my other energy play is NYSE:NRG. Shipping and transportation is another area I see to be a strong levered play in this bull market, however I took the scenic route with TSE:CJT.UN, a Canadian airfreight company. Throw in a little TSE:FFH to hold down the fort and I got myself a bona-fide portfolio. Excuse me while I generate excess returns.

2008 Again

2010-10-20T07:07:00.000-07:00

Mmmm.. this meltdown in BAC is reminiscent of a time when Citi was a bargain at $26 a share. You gotta be a masochist to buy US financials. Here comes the pain train. Choo Choooo

Stubborn

2010-10-18T08:50:00.000-07:00

I am levering up on BAC here via buying at the money calls. Overall allocation to my BAC position will decrease as I intend to sell my equity position and use 80% of the proceeds to purchase 2012 calls. As long as the economy continues to recover slowly, it is my belief that as BAC was 'too big to fail' it will be 'too big not to succeed'.

My thought process for this trade:

I don't believe the stock can stay in the $10-15 range for 2011. If BAC is lower than $10 a share in 2012 then we are most likely headed for the next wave of equity apocalypse and buying opportunies shall be had. Else, the world ends and money is the least of my concern.

There are many reasonable cases in which I lose my entire position. But I think the odds and the upside is there.

Come and get it

2010-10-13T08:35:00.003-07:00

So much for waiting for a pullback. This rally left a bad taste in my mouth last week but now that I am on to my second helping I am starting to get used to it. Luckily for me Faifax hasn't followed suit so I am going to start buying. Now is a good time to mention I'm not a professional; don't follow my advice unless you are willing to see the potential downside.

If I was a wild speculator, with earnings coming out on the 25th and a up to 10% share buyback program initiated recently , AND the recent resistance both above and below the 400-420 range, I might present a 'calm before the storm' argument for this position.

If I was a fundamentalist, I'd see a track record of 15%+ ROE, a great management team in a solid industry, and a trailing PE multiple of 6. Can't complain about that.

Correlation

2010-09-30T05:09:00.000-07:00

Correlation has been a hot topic over the past decade, wouldn't you agree? Academics are hootin'-n-hollerin' about how correlations shoot up to 1 in times of panic. Delta, gamma, vega, etc.. - neutral portfolios are all based on some form of correlation. Quants are using ever more complex copula functions to model changing correlations. But here's the rub. Anyone that knows how to play rock paper scissors can understand a copula. I'll demonstrate with an example.

A few years ago I was investing money I couldn't afford to lose (because I don't listen to rules until I know how much breaking them costs me). Anyway, at the time, I figured it this way: I'm a long only investor so if I lose my bank loan on stocks that means the economy is really in the dumps. If I lose it ALL that means the stock market has been halted and money is no longer my primary concern.

You see? I understood that a dramatic change in the stock market is going to change how the stock market changes my net worth. I used the verb change in that sentence twice to give you the sense of derivation.

"And if you don't know, now you know.." - Biggie

Be Lazy

2010-09-23T09:35:00.000-07:00

Because I sure am. Everyone is always saying, do your own homework, do your own research, etc. I think the idea there is that you will eventually come across a rare investment idea or thesis that you will be able to capitalize on. This is where I start to believe there is more than one way to skin a cat.

These days, there is so much valuable commentary (and exponentially more bullshit that must be ignored of course..) that I do believe, when appropriately synthesized, can generate excess market returns without additional risk. If you wanted to call it something so you could look cool to your friends you'd probably head to the first greek letter.

Enough baffoonery. Now obviously this synthesis process requires you not to be lazy and among other things have an excellent memory, vigiliance, and a feel for what information to filter out. This is a top-down approach, except that, instead of doing the time intensive micro research we take a leap of faith.

More on the justification of this 'bottom jump' in the future.

What Now?

2010-09-21T05:05:00.000-07:00

I have never been more unsure of where the market is going. I really don't have a clue. I'm 50% long, 50% cash right now, and looking to sell some of my small caps if the price is right. I can see this market going either way and thus I am not doing anything besides trying to get back to neutral. It's hard to sit on my hands (and on the opprotunity cost of the cash) but there is too much uncertainty behind the skewness of being long and short. What I mean is I could get my face ripped off either way in this market. I will either move to 75+% cash or start hedging my positions. I want to do this because regardless of the macro move in the market, October will probably be a down month, and I want to be able to grab a little alpha in Nov-Dec from the tax sellers.

What Money?

2010-09-07T10:10:00.001-07:00

As much as I want to have vast amounts of paper currency at my disposal, money is just an indulgence to me. I called this blog 'wanna be investor' for a reason.

Money, wealth, riches, material objects etc. are much too easily lost by simple chance. I lose sight of this fact too often.

51st Percentile

2010-08-31T06:47:00.001-07:00

Who would have thought blackjack could be so educating. Over the last week I've been learning to play blackjack and some elementary card counting systems. Under normal circumstances you are no more than 50 basis points away from winning 50% of your hands playing standard casino blackjack. If you employ some kind of tracking you can usually get up 2-3% at least every 1 in 10 hands. I make minor errors so I conservatively put myself at an overall advantage of 51%.

What has amazed me in my short amount of play testing is how much of an advantage that is. Betting heavily when the odds are only slightly in your favour Actually can be a lucrative venture. I was always sceptical that to experience large gains one had to trade or bet on high probability events. That is not necessarily the case.

Skewness

2010-08-30T05:56:00.000-07:00

My 100th post on this desolate wasteland of a blog.

The concept of skewness can be thrown in with the cliche bunch "easy to learn, hard to master". It is important because it is the pitfall of every losing investor. On the micro level, people aren't as stupid and everyone portrays. Random retail investors, such as myself, probably do a decent job of picking winners. The problem is when we come across a loser. Like our first love, we just can't come to terms with letting go. This creates negative skewness in our portfolio position returns. It is why successful investors and traders commonly preach to cut losses short, no more than 10% if possible, at all times. That way you defeat negative skewness.

I've been learning to count cards a bit so I can put up a fight at the blackjack tables, it's the same mindset walking into a casino and logging in to your brokerage account. Something to keep in mind.

Shadows

2010-08-24T07:48:00.000-07:00

CJT.UN
TDG
BAC

I have roughly equal long positions in these 3 currently. They are all showing good resistance here. I am especially pleased with TDG given that oil is lower, it feels like buyers see this as an opprotunity. I am holding my positions despite the risk of a drop because it still feel like buyers lurk below. Unlike late 2008 - early 2009.

Psalms 23:4 Yea though I walk through the valley of the shadow of death I will fear no evil

Screens

2010-08-19T10:03:00.000-07:00

With the hostile Potash bid this week and Jim Rogers constantly talking about commodities and holding 'real' assets I'm starting to think there is potential here.

Agriculture is looking more and more like it is (or even better, soon will be) a leading sector.

I'm looking at smaller caps like FOS that could blow up.. haven't found much.. yet.

Rating Agencies

2010-08-17T08:21:00.001-07:00

It's nice to be small and not worry about the politics of posts.

After meeting several Moody's employees, reading about them, and most importantly playing with and understanding their models and rating methodologies I have formed a terrible opinion of rating agencies as a whole. If it could be helped I wouldn't trust them with a dime of my money.

The good news is that wise investors know this already.

Monday

2010-08-16T14:51:00.000-07:00

I don't have the creativity for a catchy title at the moment. I only have a similar forecast to The Fly.

The equities market will rally into September and then start falling, possibly off a cliff. As long as this prophecy remains likely I am planning on being 50%+ cash by September 3rd.

Current position: 75% long (BAC, CJT.UN.TO, TDG.TO) , 25% cash

Money Managers

2010-08-13T06:18:00.001-07:00

If I was managing a larger portfolio, say 10MM+, I think the investment decisions would be much easier.

I see two slam dunks right now: getting long FFH and short bonds via whatever method you choose. These plays have little room to go down in value and potential to produce 100% returns over 3 years.

However, just because the investment decisions are easy doesn't mean the job is.

Ship it

2010-08-12T11:18:00.000-07:00

Buy something that's going up.

Sell it tomorrow when it's higher.

Until then

Metamorphisis

2010-08-10T11:40:00.000-07:00

When you think about how to make money for long enough, you start thinking differently.

Your brain stops working to live and starts living to work. And you like it.

Read

2010-08-04T06:49:00.001-07:00

I've been meaning to boost the amount of blogs and columnists I follow on these here internets, right now I'm only really following these two:

ibankcoin.com : the guy who runs this site is a highly intelligent nut-job and I find him to be a hilarious and great writer. I might one day hunt this man down to shake his hand and/or become an understudy.

gregspeicher.com : great value investor site. period.

I've been too busy reading books; just finished 'the big short' by michael lewis and am now reading his 'liar's poker'. Also read 'the quants' which I liked too. It's all just flavour.

BitterSweet

2010-07-26T16:31:00.000-07:00

Without the bitter, please.

I tell you when I'm getting my head taken off via losing money I previously couldn't afford to, so now let me introduce you to my winning side.

Go ahead and pull up SMT.TO's chart for the day. Blam, +75%, thankyouverymuch. I have 25% of my portfolio in that stock currently.

It's about goddam time.

Let's do the damn thang

2010-07-07T14:56:00.001-07:00

7 down days followed by a neutral day and now this face-melter of a rally? You don't have to be a quant to say that there's a greater than 50% chance we're going up tomorrow.

That being said the flip side of the unfair coin is probably a red day looking equal and opposite to today. I remain long and strong.

Long and Strong

2010-07-01T21:10:00.000-07:00

I'm holding longs through this downturn for better or worse now. I have no fear of my portfolio going straight to 0, I welcome it because I will find ways to bank it all back if that is the case. Crisis = Danger + Opportunity.

Trader's Paradise

2010-06-23T17:11:00.000-07:00

So I'm working at this proprietary trading firm right now, and not to be some snooty fresh-outta-school graduate but, this place is a joke. The average stay of an "employee" is less than 2 weeks. People get dropped like bad habits around this joint. It's basically a big empty room with some desks and computers to trade on. The turkey before me left his seat warm for me.

Anyway the important thing is that besides showing all signs of being an unprofitable shithole I now have access to level II stock quotes in real time. If you haven't seen level II quotes in action it is quite the experience to be able to see all the moving parts in each stock's market.

I talked to Prem Watsa at my graduation, told him I'm coming to work for Fairfax in 5 years. He thought I was joking until I showed up in 2015.

Until then I'm going to work at in an investment research group to continue learning... always learning, or in german, immer lernen. Until I'm not, and when I'm done learning you better believe someone is gonna get taught.

Still Bouncing

2010-06-10T07:12:00.000-07:00

Patience my friends. Often, doing nothing is the optimal course of action.

Bounce with me

2010-06-02T15:04:00.000-07:00

This market is going up short term, I'm hoping until the end of June because that's what it's going to take for my small cap stocks to grab on to this rally.

I'm betting on higher prices soon, then I'm gonna cut and run.

Get the hell out

2010-05-25T11:45:00.000-07:00

My orders are placed to liquidate my long term stocks. I'm not going to sit back and watch the market strip me of my wallet and sanity if the Dow decides to print 5000 in the next few years. I'm taking my money out and investing it in something I actually have faith in: myself.

What am I doing?

2010-05-20T19:04:00.001-07:00

This market over the last month has kicked the proverbial shit outta me. I started moving to cash last week with intents to buy back into this great bull market that we are supposed to be starting. Instead, I now find myself wanting to move from 40% cash to 100% and figure out what the hell is going on.

This has either been a long and gypsy bear market rally or a short and nasty bull market drop. To be quite frank, I don't care to bet the farm on finding out.

STRATEGY CHANGE UP:
Long-only && long term
to
Wherever I can get a read && very short term

With uncertainty like this in the markets, its time to start abusing the size of my small account to get in and get out.

Full Disclosure

2010-05-10T10:07:00.000-07:00

I lost all of my gains from 2010 due to a horrendous trade via USD/CAD last Thursday. I was short USD at 1.04 and was stopped out at just below 1.07 due to the intra-day madness. Besides the obvious lesson of setting tighter stops or being willing to hold on to a position to the bitter end I'm currently struggling to learn what I can from this loss.

I definitely lost control of my emotions more than I should have or thought I would have if I knew it was coming. Pleased; I am not.

Let's get it poppin'

2010-05-04T18:39:00.000-07:00

I've been offered a contract at a trading firm to see if I can cut the mustard. Whether I can or I can not I will learn and increase my mental wealth.

Done

2010-04-26T19:26:00.000-07:00

When you finish school or when you finished school, you wanted to listen to this song while sipping your favourite beverage.

If you ain't livin' you dyin

Quick Note

2010-04-06T11:16:00.000-07:00

How you liking that USD/CAD short now? A good time to take profits at parity, not all of course. I am cautious of a large pullback here as the equity markets seem to be creeping upward like a protagonist walking down a dark hallway in a horror film.

Price Action

2010-03-25T10:01:00.000-07:00

That's pretty much all that I have been paying attention to in the markets lately. Which way is the price moving, how fast, and by how much. Stocks and currencies. Mainly currencies, mainly USD/CAD.

If the slave drivers at my university would stop slapping my face off with work I would be able to leave with my education in peace and pay more attention to investing.

Until I get my face back. Good day.

Absent

2010-03-11T10:14:00.000-08:00

That is what I have been from the fantastic world of stocks lately. I was and am still long various small cap canadian industrials and cyclicals with a side of bank of america dressed with a short USD position. That is the meat and potatoes, if you will, of my portfolio.

If the participants in this wacky market were a herd of sheep we would be a restless herd by now. We are tired of this range we have been kept in and can almost smell the bollinger bands tightening. Our anticipation for a move is growing, with anticipation comes fear, with fear comes selling.

I move back and forth through analogs and reality like federer and nadal playing for the cup.

Restless indeed.

All Ears

2010-02-26T11:02:00.001-08:00

You shouldn't trust anyone that thinks they know something 100%. When I give people advice about anything I'm careful to convey that possibility that I very well could be wrong and not know it. I strongly dislike people that claim there is a single best way to do or think about something.

The power that the written word has is often beyond what it deserves. Authors are people and people gets things wrong on a regular basis. You either have to have quite the ego or don't care how you are perceived to be brazen enough to tell others how to live their lives or manage their money.

FYI I'm including myself somewhere in there.

It's not what you know

2010-02-24T12:53:00.000-08:00

It's who you follow.

Today there is more information flying around the world than ever before. This leads me to believe that now more than ever it is important to filter through all of the data analysis and recommendations.

I am a firm believer that the integrity of the data is more important than the data itself. The Medium Is The Message kind of philosophy.

Finding sources for information you believe in is at least as important as the information itself. Why would I do equity and currency research and analysis myself when someone has already done it and it is just waiting to be found.

Update

2010-02-19T15:04:00.000-08:00

USD/CAD Down of course. Told you so. I exited half of my short position over the USD here as a chance to take profits. I'm probably going to re-enter if the pair trades above 1.055 maybe even above 1.05 if a reversal looks clear.

BAC back at $16. Wish I had bought some $15 calls when it was trading at 14-14.50. If it ranges back down there I will look to do so.

Thinking about the slight possibility of a massive downturn in 2010 it might be a good idea to purchase some insurance via way-out-of-the-money puts on some big names due in Jan 2011 or 2012.

Open Sesame

2010-02-16T00:29:00.000-08:00

I wish the markets had been open today (yesterday now I guess..).

Since I need to build up some street cred I'm going to throw it out there that CJT.UN is going up soon. Ya feel me?

Coming in second in terms of certainty; the USD is going down down down down down. Yes, like the chris brown song. Maybe not against the Euro because they still have silly countries going bankrupt over there, but against the CAD. Think of it as a commodities play if you're looking to justify going long CAD.

I got rocked on my natural gas play. I had a nice double down that saved me from a large loss, but I still lost -25% on one position in HNU.TO. Let that be a lesson to me my friends. Double ETFs are Satan reincarnated into equity form. If you don't believe me go buy one.

Paper Money

2010-02-02T16:28:00.000-08:00

Currencies are a fickle bunch. A trader's dream, most definitely. The amount of leverage and liquidity available to a retail investor is outstanding and unrivaled.

Being a Canadian and needing to access the US for the plethora of publicly traded companies there I needed a foreign exchange account to hedge myself against an unprecendented drop in value of the greenback.

I've found lately that shorting the USD/CAD pair has been childsplay for banking coin. The 500 pip jump this week in the pair was a kick in the pants but you know how much I like to add to trades when they start losing. I'm shorting that pair back into the depths of 1.02 if it costs me my account. Have no fear, I have less than 5% of my investing capital in forex. I'm not That crazy. I just think it's a good trade.

And just so you know I ain't playin'

Dippin'

2010-01-26T08:17:00.000-08:00

The market has taken a nice little break from galloping higher. I fortunately sold out of a couple of shorter term positions for 10-27% gains last week. My small caps stocks are holding up well in this, sometimes breaking down below because someone wants out. I'm going to start providing those who want out and are willing to offer around a 5% discount the liquidity they are after.

I've already turned around TSE:GDL from 11 to 11.70 inside two trading days. There is money to be made long here. Try and remember that.

Citi Earnings

2010-01-19T07:43:00.000-08:00

I'm not a trader per se but I pay attention to short term action in my stocks. I do this for two reasons:

1) To learn how to profit from timing the market (There is money to be made with timing, especially for small investors)

2) To better understand how the stocks I own and am interested in act given a particular event or move in the overall market.

Let me take you through the price action BAC this morning.

Citi reported a 33 cent loss for the quarter this morning sending US financials lower. My position in Bank of America was down after this announcement about 3% and is now down a little less than 1%.

The recovery in BAC's price is bullish. Investors looked at the dip as a buying opprotunity because they think that, relative to Citi, BAC will report better earnings for the quarter and/or for the year and furtehr in the future. They probably think this because Citi receive's 68% of it's revenue overseas where the recovery hasn't necessarily been as dramatic and Citi is not a large deposit bank like BAC. I am of the same opinion, for those reasons and more.

The point is that long term investors in BAC (such as myself) are waiting for it to distinguish itself by relatively outperforming the likes of Citi and returning to a price range similar to WFC and MS ($25-$35). Of course I haven't a clue as to how soon that will happen.

Stocks

2010-01-12T12:59:00.000-08:00

I take a lot of things for granted. I come on this stupid blog I made to smack my keyboard around a bit as well as jot down some ideas I have.

I must have mentioned in the past that I am, thus far, a Long Only investor. I don't talk a lot about my precise returns because exact numbers bore me. That being said, how do you think a Long Only investor has been doing lately?

Just fine, thank you very much.

Commodities

2010-01-12T10:33:00.000-08:00

Does anyone know what moves the price of commodities? Did you see what speculation did to the price of oil? How can a commodity be that mispriced and not make you question the intrinsic value of all commodities?

Go get your farmer's almanac and make some money.

Class is in

2009-12-13T20:07:00.000-08:00

Step into my classroom, will you? Let's take a quick foray into a typical traders analytical arsenal. Any trader will tell you that the trend is your friend. I agree, but what do traders most commonly track trends with? Lines. I'm talkin' slope and intercept, y=mx+b, lines.

To this day, the most commonly used analytical tool to track trends on a chart is by far a line. Lines are drawn for support, resistance, from highs to highs, and from lows to lows.

What if we started using slightly more complex functions to track trends? The exponential function is a clear front runner here due to it's natural ability to track growth and decay. We can even add noise using trigonometric functions such as sine and cosine.

I think a little bit of, relatively simple, mathematics still has the potential to go a long way in the stock market. You'll find out based on whether I wind up in a penthouse or in rehab. Or both.

"Make things as simple as possible, but not any simpler." - Albert Einstein

Trades

2009-12-01T13:55:00.001-08:00

Who needs 'em anyway right? Not me.

They say to be a successful trader there are 3 things to worry about:

1. Trades (25%)
2. Psychology (35%)
3. Money Management (50%)

Those percentages are rough weighting one trader put on the relative importance of the element. Something to think about.

Update

2009-11-06T09:18:00.000-08:00

Natural gas isn't doing anything I want it to lately and I'm keeping. I only learn through failure, too stubborn to do it any other way.

The USD is putting up a nice fight above par compared to CAD but it looks artificial. The only question I have left is about the timing of shorting the USD.

Might become a financial consultant. Ah jeez.

I don't sling rocks
I buy stocks

Change Up

2009-10-18T18:56:00.000-07:00

I'm starting to think about adapting a new investment strategy. I think this whole value investing thing is best suited to someone with more money, more experience, and more time. Hopefully one day I'll be in the position, however the reality is that day isn't today and won't be tomorrow for some time.

I am going to start looking at companies hitting new highs, coming out with new products, and trading at over 20x PEs. My jewish personality might go into cardiac arrest when I make a purchase but my irish gambling side will enjoy the rush.

Now however I will have to follow some rules because this style can be more risky. Cutting my losses at the typical 7-8%, no exceptions, should keep me safe.

A change in style is first a change in thought. I'm cool with that as long as I leave a passage back.

No Time

2009-10-16T12:57:00.000-07:00

I just forget about this blog sometimes therefore it will never be successful. I'm not gonna lose any sleep over it. I treat it like more of a journal anyway.

Natural Gas worked out if I had stuck to my double down strategy I would have made a +50% return. I had some uncontrollable cashflow issues that got in the way, so I'm just looking at a small gain somewhere around 5%.

I've got some information on a small cap company I think might be worth a 50% return over the next month. I've entered the position, time to sit on it.

Ain't no rest for the wicked..

If everything bad was wrong, I'd never be right.

- WDS

Chill out

2009-09-24T10:49:00.001-07:00

It was nice when I was doing an internship making money instead of paying an institution of 'learning' for a scrap of paper.

Now that I am back in school for 8 months, the final 8 months I might add, I am back to being stressed by logistics. I've been a busy beaver buttering people up and pissing people off trying to get things done this week.

The logistics are complete for now and I can focus on trying to squeeze out some good from my courses. This directly cuts into my time to think about new investments so I will probably just be playing around with my current portfolio.

I've already decided on a strategy for the fall. I'm just waiting for a pullback to make some more purchases which will should include some smallish cap tech names and shorting the USD against the CDN on pops.

That's all for now.

Brrrrrrap

2009-09-13T12:10:00.001-07:00

Investing is so much about the investor sometimes that it doesn't matter what the investment is. In the spirit of that, I have a suggestion to you; focus on getting to know yourself more. Find out who you want to be.

Maybe I'll get into my philosophical ideals sometime but for now I'll just say that once you start to appreciate yourself, others will follow.

Why the hell are you reading this dead-beat blog anyway?

Test time

2009-09-03T07:36:00.001-07:00

Looks like all the shit I've been talking about natural gas is going to be put to the test as we are now seeing '09 lows and I am looking at a pretty hefty loss on my hands. I suspected as much coming into this position, so naturally I am ready to suffer the consequences should I be wrong. That being said, as usual I will find more cash, namely from my other wins, and buy more natural gas. I'll have to write a pretty big 'lessons learned' post if I'm wrong on this one, but I'm sticking to it.

More Natural Gas

2009-08-27T06:16:00.000-07:00

I got up this morning and I said to myself, "I think that there might be something interesting to be found in comparing natural gas and equity index correlations over different time periods."

So I looked into it:

When I get some more time I want to check for other periods of over 6 months that have negative correlation. I think that is a nice buying signal right there. Time will tell.

Natural Gas

2009-08-24T12:25:00.000-07:00

You tell me where it's going.

Of Interest

2009-08-23T14:28:00.000-07:00

This will be the first post of a series of research posts. I've been thinking of trying out some strategies lately with fairly recent historical data. Simple stuff: buying shares and on-the-money puts and various doubling down strategies at different price levels. I think it would be interesting to see when these strategies would have been feasible to employ and in which equity sectors they would have done best.

I'll share the process and results as much as I can along the way. I'm going to try and be conservative by picking stocks or sectors that I was actually looking at last year.

More to come.

Hurricane

2009-08-21T08:56:00.001-07:00

Hurricane say: Stay away from the windows

I'm buying natural gas on the way down because I'm insane.

In other news, if we are getting tornadoes in Ontario, Canada for the first time in like 50 years, whats the weather got to be where the get some Real winds.

Yarr, there she blows.

Today in the Markets

2009-08-19T09:18:00.001-07:00

China loses 4% off one of its equity indices and we see the Americas shake the blues to rally mid-day. Regardless of whether we turn south from here this is a good sign that many think this is just a dip and we will soon be headed higher.

Status

2009-08-17T05:52:00.000-07:00

I've come up with arbitrary net worth numbers to assign people to a social class:

< $50,000 - Riff Raff - You are poor as shit cause you spend too much. Much fun to be had here. There is beauty in the struggle that is the low class.

$50,000 - $500,000 - Middle Class - I hate the middle class. You are like limbo, waiting to die. However, you are necessary.

$500,000 - $10,000,000 - Rich - You or your descendents will probably make your way back to the middle class because in reality, you probably got here by chance.

$10,000,000 < - Wealthy - You control things silently. You understand how the world works. If you don't, you are only visiting this place.

Game time

2009-08-14T06:24:00.000-07:00

What makes you able to buy a stock from someone and sell it back to someone else at a higher price? How is this even possible? What makes you different?

Questions I ask myself everyday.

Now that I've seen and held stocks that have swung -80% or -90% and recovered 200%-500% I have a wonderful view of the cyclical nature of stocks. I also see that the common investor's view of risk is wrong. The number you call the standard deviation of an investment is not the risk of that investment. It is the closest thing that they could wrap their head around.

Never buy at new lows. I want to widely promote this rule because it encourages even cheaper prices for me, the buyer. My aim is to throw the traditional rules out the window and create my own, slowly but surely. In fact, I'm not convinced I need rules to be a sucessful investor. At least not ones that can never be crossed.

Knock it off

2009-08-11T11:24:00.000-07:00

Stop buying.

Everyone and their uncle can see a pullback coming. Heck even I'm selling some of my stocks. I happened to get lucky with oil driller TDG, they reported a loss when I was betting on a nice gain, and I still managed to get out in the green. I'll pick them back up at a later date. It's about time we had a leg down, I was starting to miss the days when I felt so poor I thought I didn't deserve food. I'm still staying over 50% long but not by much. I will be buying again when prices look attractive.

I know. Real rocket science eh. Shuddap.

Bad Move

2009-08-06T13:58:00.000-07:00

My friend gave me a good piece of advice yesterday. I wish I had taken it.

Today I faced with two decisions. First, to lock in some gains via purchasing BAC puts and second to take profits on my natural gas position. I wanted to do both first thing in the morning. I decided not to because I was afraid and as a result I lost money instead of making it.

He who hesitates is lost.

Today in the Markets

2009-08-05T07:05:00.000-07:00

BAC continuing a measured move higher? It was only a matter of time considering the levels of say WFC and MS.

Natural Gas continuing higher? Natural gas is a random walk most of the time. I'm half in GAS and half in HNU leaving me approximately 1.5x leveraged to weed out half of the mathematical theivery from 2x leverage. That being said I might play around moving between 1x and 2x because I'm bullish on nat gas until 2010 as it stands.

HBF and ATVI didn't get bought because I saw better upside potential elsewhere. More risk but you know what I say:

When you've been playing with fire and already been burned a couple things happen: (i) it doesn't hurt as much when it happens again and (ii) you know how to play with fire a little better.

Viva la revolution

Eat It

2009-08-04T13:43:00.000-07:00

I don't trade for the trend
I trade Before the trend
I don't see the end
and I don't have to
cause I got flava like all dressed chips seasonen

Rising up

2009-07-28T10:02:00.001-07:00

I never realized how much a douche bag I must sound like blogging about how I am learning all this crap about investing until I read some other university punks opinions.

You know the kids. The kids that live to work. the kids that march to the beat of the corporate drum. Fuck them.

In other news I passed exam one of the CFA program and there's not a damn thing they can do about it. Booyah.

Psych Out

2009-07-24T10:03:00.001-07:00

I'm all about learning the psychology behind whatever it is I am up to.

I didn't understand what people were thinking shorting the financials in the teens. I didn't understand what they were thinking shorting ANYTHING that had gone down 50-80% or more. It didn't seem like there was much reward left and too much risk.

Now I get it. It's the same now except reversed. I'm comfortable buying stocks that have doubled and tripled off of their bottoms because I'm comfortable with the Value that's left in their equity.

Moral of the story: risk and reward are silly to quantify sometimes.

Let It Be Known

2009-07-22T10:31:00.001-07:00

You know, most good investors, especially the trading type, they either wince or laugh hysterically at you when you mention the words "double down". Well I've been doing that for quite some time now, and today is the day that I'm back to that psychological barrier: Even.

That's right, I'm back in the black. That might not sound like a feat to you but let me insist, It Is. I was buying all kinds of ridiculous trash in '08: Citi at 26, Media stocks that went to 0, Double long financials (UYG), Bank of America at 14.

I lost my shirt, shoes, and pants on all of those at one point. What did I do? I bought more. Just like a broken clock is right twice a day, even Bill Miller is right twice a decade.

It's not about how often you win, but about how much you win when you do.

Buy

2009-07-17T07:21:00.000-07:00

Continue to buy with whatever money you have, find, or borrow.

This is my strategy and I'm sticking to it. See folks, consistency is key. The only sure-fire way for myself to lose money right now would be to stop buying. The market and the economy have shown that the worst is over for now, from an overall perspective.

I bought some natural gas in TSE:GAS recently. I am looking at adding to my small-cap value plays that are a little lagging. I am small money thus I use small money advantages.

If you are big money, what the hell are you listening to me for?

Clarity

2009-07-10T10:57:00.000-07:00

Maybe I should be a little more clear with my intentions.

For the time being I'm not concerned with how much money I make or lose. It's not about an amount. It's about an ability. It's about the ability to grow money.

I want to be able to lose everything and make it back. The ability to create a fortune, to me, is preferable to having one.

Character

2009-07-07T08:17:00.000-07:00

"Character is what you do when no one is looking"
- Jackson Browne

I don't know who Mr. Browne is but I must agree. I'm a strong proponent of doing some things "just because" sometimes. For example, when I was a child I would never walk down the hallways of the apartment building, that didn't make sense to me. Why walk when you can run? So I ran unless someone was watching, you know, because I didn't want Them to know I was crazy.

A couple others: I like to hold doors for people and I like to hand out fashion complements (although the value of which, coming from me, is subjective). I don't have to do these things and in all reality I'm not going to get anything in return; I do them just because.

This is relevant because it applies directly to success. Reading annual reports, building and playing with financial and statistical models, reading and thinking about financial information... you get the idea. I think that if you can put these into your character through desire and effort, you have a much higher probability of getting whatever it is that you want. Hell, rumour has it, if you do it well enough you'll wind up with more than you wanted.

Fraud

2009-06-22T12:23:00.000-07:00

You know why Bernie Madoff looks like he doesn't have a care in the world? Because he doesn't. If he did he would have escaped to a suitable hiding spot in the world and found a new plethora of wives long before he was discovered.

My point: Madoff is just one of the guys who got caught. There is more of these shenanigans going on presently and many of them will get away with it free and clear.

Revamp

2009-06-19T07:27:00.000-07:00

Alright I'm tired of being in the hole. It's time to step it up.

I found my stocks that are going to do it for me. NRG, HLF, ATVI. I could tell you how they all scream CANSLIM. I could tell you that I like just plain like these companies. You're not going to buy some third tier blogger's stock picks anyway.

I'm going to go peddle on the street, scrounge up some change, and buy and hold baby. Buy and hold.

Bite me.

Relapse

2009-06-16T06:29:00.000-07:00

Man I feel like Eminem coming back to this blog it's been so long.

Although I only have one message: Buy Shit. I mean come on, I was buying these crappy equities in Jan 2008, do you really think I wouldn't be buying now? See, if you're consistently crazy, sometimes you overlap with the sane investors. Even a broken clock is right twice a day.

Buy whatever you want, well not inverse ETFs, but you get the drift. Just do something, you can't afford to sit there and watch everyone else make a killing. Maybe your wallet can but your pride can't. I'm going to start putting these puppies on credit cards pretty soon.

I should disclose I am a losing investor and have not broken even since I started investing in 2008. Pft, historical returns.