iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,250 Blog Posts

Don’t Get Whipsawed

Frantic price action, coupled with obscene amounts of unprecedented news flow, will kill off many investors. It’s very hard to keep a moving average when stocks are moving in 7% daily increments. Although I am guilty of moving in and out of contrary positions, such as today’s failed attempt at ERY, I always keep those trades small.

The market is a form of gambling, if used to trade frequently. Like gambling, people tend to get caught up in the emotions and the digits, forgetting there is real money at stake. Just because the money is in an account, dressed with cool fonts and fancy looking graphs, don’t lose focus of what you are trying to accomplish.

Get rich?

Maybe. But I think trying to get rich in stocks is an easy way to crush yourself. Unless you are 99 years old and have been diagnosed with stage 4 cancer, you have time to see your money grow over time.

I know this site is all about gunning for the markets, while killing people with clawhammers. But, that’s for me. You wouldn’t suggest a newly licensed driver participate in a NASCAR race, would you?

Before you crap all over your profit and loss sheets, figure out what your theme is. After you figure it out, initiate a plan to buy or sell said stocks with the understanding that you will be wrong on your initial purchases. Once you’ve taken the hubris out of executions, you won’t get pissed off when your new buy drops a buck for no reason. If you have a strategy to buy or sell, stick to it and adhere to those disciplines.

As for me, I have a theme: long silver/gold/refiners, with a blend of high beta gambling stocks. I just replaced NFLX with LULU, after booking 8 points in the former. I am not worried about EXK/AG/RGLD dropping because I intend to buy more if and when they dip.

Even though GSVC was looking mighty fine (southern accent) at $17, it looks even better at $14. I was never going to sell it at $17, so it’s pointless to get mad at shit like that. I intend to see it through, watching the development of their holdings in Facebook, Twitter, Zynga and others.

Lastly, I hope you have other streams of income. If not, try to get one. The stock market is on especially tenuous grounds and it can disappear one morning, Merlin style. You will wake up and turn on CNBC and Steve Liesman will tell you “in an unprecedented move, the Federal government has halted all trading in equities and bonds, indefinitely.” And that will be that. Poof, no more bullshit Italian yields because there will be no such thing.

At that point, “The Fly” will wander off into junkyards and finance local militias to secure grain.

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62 comments

  1. pedro

    duly noted. nice post.

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  2. Trading_Nymph

    I am so amazed that Mario post on Facebook, who needs the press when you can go to Facebook to see what former world leaders are thinking.

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  3. pedro

    Miners are just plain weird. Yesterday, they showed great relative strength for most of the day, and today, they’re major laggards. Don’t get it.

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    • riggedgame

      There is too much silver, gold and copper out there. And there is a jousting war between the Fearmongers and the Realists.

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  4. Jg

    word

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  5. TraderCaddy

    Not related to stocks but major news could be breaking at Penn State. Not sure if it’s true but the stories are hitting Drudge.

    http://rivals.yahoo.com/ncaa/football/news?slug=ycn-10407023

    http://www.nesn.com/2011/11/jerry-sandusky-rumored-to-have-been-pimping-out-young-boys-to-rich-donors-says-mark-madden.html

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    • Po Pimp

      This is some of the sickest shit I’ve ever heard about. Mark Madden first mentioned this story back in April but it never garnered any attention… until Paterno broke the all-time wins record that is. Then the reaction from those students last night after Paterno got shitcanned? What in the fuck is going on up there?

      The next time some punkass Big 10 bitch wants to whine about redneck southerners being football crazy, they can go fuck themselves

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      • Jakegint

        I put it on the last board, but my take is

        a) give the guy the benefit of the doubt, albeit he is some pretty deep shit already

        b) if this pimping story is true, however, then drawing and quartering is too kind a solution… and too quick.

        __________

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        • Po Pimp

          Oh it keeps getting stranger by the minute. A Pennsylvania prosecutor that supposedly had been given the goods on Sandusky back in 1998 disappeared without a trace in 2005.

          They never found a body but found his laptop (hard drive removed) in the bottom of a river. Do you hear of many suicides where the person takes the hard drive out of his laptop then ditches the computer in a river before doing the deed? Yeah, me neither.

          Was the DA looking to reopen the case, or was someone possibly tying up some loose ends? We won’t know.

          http://www.nbcphiladelphia.com/news/local/133615093.html

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          • TraderCaddy

            This Penn State thing is making the crazed Alabama fan killing the Auburn trees looking like small peanuts.

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          • Jim Chanos

            It is kind of a Three Mile Island – it’s NOOKLEAR! It is radioactive – don’t touch it.

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          • Jakegint

            There’s a looooottta Mafia out there in the Western Pa, Eastern Ohio area.

            Youngstown, anyone?

            _______

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        • Alvari40

          Holy fuck…I agree with Jake 100% (esp on the drawing and quartering).

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      • Yogi & Boo Boo

        It’s just too creepy. I don’t know what these guys who covered this chit up were thinking.

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        • TDL

          They were thinking they were untouchable. This is the hubris of power.

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          • Taco

            Don’t forget that the DC Madame was assassinated, and it was successfully covered up as a suicide.

            And then it was completely forgotten… power still rules, above all else. That’s why they call it power.

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          • ruggyup

            Any further word on the grad assistant who told Paterno about the shower caper? Last I heard the guy was ok with his job. Why?

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  6. Yabollox

    Sticking to a single theme is BORING! I like to change it up for more fun and excitement. Sometimes it’s fundamentals, sometimes it’s a short squeeze opportunity, sometimes its following a trend or whatever is hot. And how can you avoid going with a good story stock?! You can win or lose on any of those deals.

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  7. Rhino

    LULU LMFAO! Are you planning on buying some yoga pants and moisture wicking thongs soon too? My chick loves that shit and the dudes I always see wearing it are dainty little queens. Is that your target audience? Blonde chicks and queens? Having been called a “trailer park homosexual” myself I am neither buying or selling, merely riding out the tornadoes in my Admantium Airstream.

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    • ALLPROz

      As I mentioned in prior post…

      LULU looks to have little upside here, maybe 56.5 with current downside channel range bottoming around 43.5.

      I know the growth story here but even with that looks expensive at current 58 p/e.
      Last three months lower highs and lower lows.

      What am I missing?

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    • Yabollox

      LULU is one of those corps. that can sell product at a premium price.

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      • Rhino

        They def do sell their products at a premium price, just make sure you don’t buy them at a premium price. Especially in this market a little momentum driving a 10% upside can be completely wiped clean with some pasta eater making a comment and causing a 20% downside.

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  8. The Pirate Trader

    Quoth he: “At that point, “The Fly” will wander off into junkyards and finance local militias to secure grain.”

    Yarrr, I be willing to join with ye. It’d be an honour to go a’plunderin with ye, le Fly.

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  9. Mark

    Great advice. Thanks.

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  10. ALLPROz

    S&P response in error message concerming France…oops…

    As a result of a technical error, a message was automatically disseminated today to some subscribers of S&P’s Global Credit Portal suggesting that France’s credit rating had been changed.

    This is not the case: the ratings on Republic of France remain ‘AAA/A-1+’ with a stable outlook, and this incident is not related to any ratings surveillance activity. We are investigating the cause of the error.

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  11. Bullish

    You wouldn’t suggest a newly licensed driver participate in a NASCAR race, would you?

    Classic line.

    Kinda like putting an idiot from Texas in the Presidential race and asking him to tell us three cabinets he’s like to replace.

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    • Yabollox

      The china cabinet, the medicine cabinet, and, uh- er- ….. uh, er…., uh, uh…..er….

      ….oops!

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      • Jakegint

        The liquor cabinet, it seems.

        ____

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        • Po Pimp

          Goes well with the medicine cabinet provided each are properly stocked.

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          • Jakegint

            No joke… I just heard a pretty sick story about someone doing that and losing two whole days of his life “poof!” like that…

            Banged his car up pretty good too… doesn’t remember that either.

            _____

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          • Po Pimp

            He should consider himself lucky. “Sippin’ lean” has been known to kill a few peeps.

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    • Jim Chanos

      At least he knows that it is not 57 states and and unlike Biden, he has not asked anyone in a wheelchair to stand up.

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    • Don Yaschuk

      I personally like the south park episode where Cartman was sponsored by Vagisil.

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  12. Hawaiifive0

    Thanks Fly,

    Very instructive and helpful!

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  13. JNROD

    The thesis of silver and gold going up due massive money printing is a good one as long as the money printing piece goes along with it. However the latter has already been done at a massive scale and has caused governments to be toppled (think the arab spring that just recently happened). Massive printing will generate massive inflation and massive turmoil in a world that is full of it. I just do not see governments going down this path anymore. Germany has the experience of the Weimar republic and that did not bode well for them. Here at home the FED can no longer do it. They can talk about it but they can not do it. I would be very careful in assuming this printing story as a given. We are in uncharttered waters.

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  14. TeahouseOnTheTracks
    TeahouseOnTheTracks

    Insider buying in SMBL by CFO & VP today.

    Side Note: Vegas must be down 35% on TZA … must be like having a railroad spike driven into your temple with a brick, eh?

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  15. Yogi & Boo Boo

    Great post again. The good Dr. is ending the year on quite a high note.

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  16. mancini

    For me, the only way to win in this market is through spread trades. I am long to my ears in ibkr and xom, (as they have shown a little resilience), while I have an equal $$ amount short mar, eur.usd and spx futures. On days like today, the trade works perfectly.

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  17. pjdempsey

    Great stuff as always Fly. Appreciate the honesty. The market has been tough and I’ve seen some good traders in here either getting chopped up or sitting it out altogether. I’m part of the former but thinking of joining the latter. The point that some of us have plenty of time to make money puts it in perspective and makes that small loss after a stop is hit hurt a little less.

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  18. SUBCOMANDANTE CHINCHILLLLLA!!!
    SUBCOMANDANTE CHINCHILLLLLA!!!

    BREAKING

    LULU changing symbol to MILF.

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  19. dash

    Hey, when you need to get that militia thing going, give me a call. I’m an expert in weapons, explosives and unconventional warfare.

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  20. discoordinated

    What’s up with FSLR? Looks like news, but I can’t find any.

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  21. kmoney01

    check out cnbc..why is it so quite on the floor? something must be going down

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  22. theedge111

    Excellent post.

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  23. Hitter

    SC on West Coast, THE Ohio State in the Heartland, and PSU in the East. and the jabber was always how bad the SEC programs were. Rocks and glass houses.

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