Before time moves on and I forget to post about the FMSA trade, let me explain how I knew it’d work.
FMSA is a frac sand company. This is an industry that was pistol hot a month ago, with SLCA, EMES and HCLP all hitting new highs. By the time they were ready to IPO, the expected range had been lowered to $16-17 due to market conditions. When they came public, the frac sand space was getting annihilated. It was the worst possible time for them to IPO, especially since they had no institutional backing or a solidified retail shareholder base. The result was a rout in the shares, far exceeding the declines in other sand plays.
When I bought into the stock, the sector had the appearance of bottoming out. FMSA’s losses, however, were twice that of SLCA’s. I knew that if the sector rebounded, it would move twice as fast, if not more. I was right, made 30%+ and now I am moving on, which is probably a mistake since the stock will likely trade above its IPO price of $17 in the not so distant future.
Let me tell you something about Wall St, buying and selling stocks. Anyone can do it. My best days trading occurred when I was brand spanking new in the business, early 20′s, without a care in the world. I’ve mentioned my first big trade here many times, which was $6k into AOL turning into $250k in a little less than 3 years time. I had little understanding of the market, only extending to my encyclopedia like memory of stocks, profiles and sectors. The older, more experienced, you become, the less risk you take. Age, inherently, is the ultimate arbitrar between fear and greed. When you are young and have never failed, your inhibitions are without boundaries, invincible, God amongst mortals. After you get dinged a few times, you don’t want to get dinged anymore. As such, you become careful in the manner by which you conduct yourself.
Ignorance truly is bliss.
Trust me when I tell you, the ignorant trader has a short lifespan, albeit an exciting one. The momo chasing gets old quick and before you know it, you’re starting over again.