I just wrote 200 words of drivel about how this market was on the verge of punching short sellers in the face through late January. I deleted the post, then proceeded to defeat my youngest in a game of chess. It’s really stupid for anyone to make long term predictions at this stage in the game. The truth of the matter is, the market is running on faith now. Technicals and fundies have a limited effect on the market. The daily fluctuations of this tape are dictated by the news flow out of Europe. We’ve all known this for sometime now. Pardon my redundancy.
About a month ago, I was sitting high on the hog, spitting at people down below, with annual gains of 16%. Then, all of a sudden, Mother Market chopped my hands off, preventing me from pushing the sell button as the market plunged amidst euro-panic. I shed an amazing 16% aka all of my gains in three short weeks. At the very lows of the market, I was distraught, feeling a sense of defeat and helplessness, as the news turned from bad to worse. I held my positions, only because of my Kamikaze mentality. If my personality was different, I probably would have sold to protect assets from going negative for the year. I rationalized my reasons for being long, declaring that gold/silver miners (then 40% of assets) would benefit greatly under a euro collapse. Luckily, as seems to be a common occurrence throughout my investing career, the worm turned big time last week, allowing me to recoup a staggering 13%.
Upon receiving this great boon, I booked profits in all of my miners, except AG, repositioning the funds elsewhere. Why? To be honest, I don’t know. I just didn’t like the way EXK, NGD and RGLD were trading early Friday morning. I realized selling them would go against everything I’ve been saying for the past month. But, to me, nothing else was more important than making money. My opinions change often and I cannot help that. This will confound most of you, especially new people to the site. If you follow my moves over time, however, you will learn to understand the method behind my madness.
Let’s take the example of TEA. I penned an article on TEA when the stock was $24, declaring it could become “the next big thing” in retail. In addition to my bullish points, I pointed to the fact that the shares were very expensive and it could drop by 50% without pause. The reason why I didn’t buy it was the same reason why I sold NFLX @ $90. I could not rationalize being long high risk names, with questionable valuations, into a shit storm of negative news flow. In a way, I got lucky. After all, I liked the story and did not feel the excessive valuation was a huge concern, considering high growth names like PNRA, AMZN and CMG have been “expensive” for years. I just used my gut, and as a result, avoided a murderhole.
The same thing happened with my LULU last week. On earnings day, the stock cratered 8 points. I was very close to just booking the 20% loss and moving on. However, I could not justify booking the loss given the paltry bear case. The earnings were good. People were bugging the fuck out. By closing time, the stock was down just $2, recovering $6 from 9:31am. The next morning, it caught an upgrade, leading to a $2.5 melt up. Another disaster averted.
My point is this: investing successfully is a lot more than reading balance sheets or charting moving averages. It is an art. As an artist, I look at things that many of you might not even notice. On the other hand, my jaded view on stocks often prevents me from enjoying huge winners. It’s a trade off that I am comfortable with because it works for me–having crushed this tape every year since 2003. If your philosophy has never worked for you, do not be afraid to get radical and try something different. Over the course of my career, I was a balance sheet guy, bond guy, VC guy, iPO guy, bank stock guy, biotech guy, tech guy, healthcare guy, military contractor guy and even a chart guy. I’ve endured millions in losses before it all “clicked.”
Do not lose faith in your ability to make intuitive decisions. Is it luck or skill, who knows? At the end of the day, does it really fucking matter?
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Le Fly, are you good or are you lucky ???
Great post. Makes me feel more at ease relying more on gut feeling like I do. People lie, numbers lie, but my gut always tells the truth.
What about Chinese lotto guy?
I visited my first Tea store this weekend. Personally, I think tea is disgusting, however I did notice a bit of buzz surrounding the store. I’m very interested considering the “less expensive” valuation since it was clobbered this week.
Do you think you may buy at some point?
I do think it will be a buy, but not until this market calms down.
That Chinese green tea is simply the best. I keep a pinch between my cheek and gum for hours at a time.
Hunches work better than charts. In a recent study it was found that “gut reaction” decisions are more often right than careful, methodical and thoughtful answers. To me it’s the difference between a quick reaction and plodding along hoping for concurrence amongst peers…
so true: my best trades were when i over slept all hung-over 3-4 hours into the market day and some POS owned ran.
trading stock not only has to be the most boring of all professions (or hobbies), but has huge risk, no certainty at any scale and contributes nothing back. Unless you are betting big (+75K a trade) you aren’t making more than a mcdonalds manager, and most likely have it hanging out on the chopping block for most of day ready to be taken. its a mad poker game, and you WILL be had.
Spoken like a true loser.
He should be banned. We don’t need that negative energy around us. He probably is a McDonald’s manager. Loser.
Kirkham- I respect your view. But unless you have family money, create a successful business (other than trading) or command big bucks for your personal services, what other possible path to significant wealth do you have in mind?
significant wealth from the Stock Market? Dude – even the fly categorizes “success” in at 15-20%, so like I said, unless your betting big, and hitting trends on a regular basis, many times in a row, i just dont see how to make any serious money.
if you are male and white, and haven’t figured out how to make money, you are at a real disadvantage.
LOL
billions and billions served. how many times have you been served? well, at least one now.
He must not be using The PPT.
Regional Manager.
Maybe not even a loser.
A dick nonetheless.
Kirkham…This game is not for you.
Don’t you mean dickless?
Wrong. As in life, there will always be natural winners and losers in the stock market. Sounds like you have already determined which category you fall into.
Kirkham, what you have said is true for most folks trading/investing in the markets.
As Yogi said below, “Most people new to this game do not realize the amount of time and effort that goes into it to get it “right”. They give up too easily.”
It takes a huge amount of studying the markets and learning about them, in order to do well in them.
Unfortunately folks on CNBC or folks trying to sell various stock newsletters, are constantly trying to convince people that investing/trading is easy. So most folks do it the “easy” way, which results in losing one’s shirt.
Well said Frog. I’ve been in the market for a little over 2.5 years. I’m young and relatively well educated.
However I quickly realized that in order to succeed in the markets, I had to eat sleep and breathe information. I had to study and understand the markets as best as one can.
The thing that separates the winners and losers is work. Of course good intuition and the balls to act on it helps. Some of my best gains have been having that gut feeling and having the balls to act on it.
Scared money doesn’t make money, but when you do your research, the world is a lot less scary.
Excellent post Monsieur Fly.
Sometimes when I read your posts I get goosebumps … it’s like reading some of my thoughts written by someone also…
Great post Dr.
Your ability to change on a dime is probably what I admire the most.
I used to awe at you ability to push the trend to the max. Hopefully it’s just temporary, cause it’s something I want to watch and learn.
Echoing the others, excellent post Fly.
The only thing I know is that for the first time in our 33 year marriage my wife watched an NFL game from beginning to end.
I think she wants a Tebow Bronco jersey for a present.
“Do not lose faith in your ability to make intuitive decisions. Is it luck or skill, who knows? At the end of the day, does it really fucking matter?”
I think Fly was talking about Tebow.
When did you convert?
______
It’s crazy, from what I can recall, interest in the Denver Broncos had never been lower than at 4 weeks into this season. Today, everyone at the bar was into the 4th quarter of the fucking Vikings and Broncos game.
There is just something about that guy.
TRUE music, at last! Sincere “thank you”.
Awesome post, Fly. Lots of actionable advice there. Thanks.
Fly,
I’ve been visiting your blog for years, and have enjoyed reading your posts. Is it me or have you’ve recently had a slight personality change? It just feels like your level of cursing/ranting has come down. Something up? Or am I just getting used to all said fun? Or are you secretly wanting to go back to your earlier promise of not cursing till the DOW hits 10K?
I tend to get more focused in times of duress. Once the POMO fueled rallies start kicking in and I can put this on “auto-idiotic pilot,” degeneracy will return.
Monsieur Fly, psssst…is the holiday season getting to you? This post has gracious and humble overtones… 😉 Many congratulations on recouping your gains.
My gorilla says he likes cocaine, preferably on his bloomberg terminal
Great post. The losers will always be with us. Most people new to this game do not realize the amount of time and effort that goes into it to get it “right”. They give up too easily.
It’s been great watching you trade the past 3 years. You’re a true SAM.
He is even “SAMCRO.”
_____
Excellent… took the word out of my mouth
I have won and lost so far, but I’m not giving up. I think you are right that intuition plays a big role alongside mathematics, to trade successfully.
Thanks for the excellent music, Fly.
Hey kirkham,
If you think your at a disadvantge for being a male and white I truely feel sorry for you.
You must be a real chud or somthing. Do yourself a favor and go to a place where no white people are. I remember China companies paying white males to attend meeting to show they have it going on.
You should take my advice or maybe just kill yourself.
regards
chuck
a mite harsh mr. bennett. the fellow is “talking his book” and should not be crucified for it.
kirkham – do well in your other endeavors and we shall do well in ours…
Chuck, you have a real talent for reading miscomprehension, my friend.
The asshat clearly said that if one is white and male, one should not have much trouble making a living. I believe he was indicating advantage, there, not the opposite.
Now it’s probably also true that he’s a gay porn star, but to each his own, no?
_____________
right or wrong chuck lays down the law. priceless.
you sold nflx at low 80’s after doubling up on the first dip run from 74 not 90
you are an idiot
Time stamped inside of PPT
You wrote: 11/10/2011
10:00 AM
@ $88.90
Edit | Delete
“sold out $NFLX”
and steve goes radio silent
Fly,
You were blessed by the timing of your kamikaze mentality. I mean, that same mentality could have put you into negative territories had the Nov selloff repeat that of the relentless July selloff. Through the years of bad luck, I am convinced of fate and how hard it is to overcome it. Personality can affect your entries and exits and therefore lose you money, but it has nothing to do with why you still end up losing money anyway when you follow someone else’s trades, blindly.
If you don’t believe me, if I replicate your trades, I can assure you that you will lose. If you wonder why you lost money in RENN, it’s because I had it; same with VXX when you had it. It’s f amazing.
But RENN and VXX didnt hurt because VXX was less than a 6% loss and RENN was less than a 5% position.
Apparently not for him though. Unfortunately.
My point was that you lost money at all on these trades which I happened to have cherry-picked from you, and it doesn’t matter how little you (or I) lost. That I didn’t turn long in October when you reversed your trades. And why I didn’t pick your other winners instead. I was talking about perpetual jinx against me. BTW, I also have NFLX.
Success in the market is rather meaningless when your own country can declare you a terrorist for whatever reason they choose and smite your ass to BFE or hold you in prison indefinitely without trial or hearing.
Your money will just become the “spoils” of the never ending war on terror.
That my friends, you can take to the bank.
Where’s the thumbs up?
Fuck it.
Just trade the range until it doesn’t work anymore.
At some point, the range is broken and those on the right side of the trade make money and those on the wrong side lose their ass.
The sad thing is, the biggest winners already have a heads up by fraudulent means.
Silver’s action has been confounding.
Fly,
You should just stop worrying and follow Gary Savage @ smartmoneytracker. He’s done 25% since July with no drawdown. Save yourself the headache.
BANNED
why are the futures down on fox news but up on bloomberg dam it?
regards
chuck
I would trust Bloomberg, they were up to 97 Dow 10 S&P.
Right on Damon. Right on.
GOP propaganda from Fox.
U.S.-based Newmont Mining Corp. is the project’s majority RAPERS..SHORT THESE FUCKERS~!
state of emergency Sunday in a northern region torn by more than a week of protests against a highlands gold mine, the country’s biggest investment, by peasants who fear for their water supply.
Huh?
Fly,
New to PPT & 12631 by about 2 months. Started trading in October 08. I noticed a lot of your trades went counter to your system/algo. Friday i was going was going to ask you what role intuition played in your trading but…. i turned the computer off.
A keen intuition has been a sixth sense and has served me well for 60 years but I’ve resisted it, to a degree, in trading.
So, thanks for clarifying…. and reading my mind.
I will make believe i didn’t read you saying “60 years ” of investment experience. God only knows how old you are. As you know, Ibc adheres to a strict age limit of 47.5.
good morning fly,
60 years old. 3 years trading since oct.2008.
seem to spend all my time recouping losses….. hence ppt and 12631. onward and upward! my mental age is 14. hope that allows me continued membership. thanks, for what you provide.
Pay no attention to this OEW update … Go with your instincts …
“Since bull markets rise in impulsive waves and decline in corrective waves, and bear markets do the reverse, we decided the next downtrend correction off the SPX 1293 high would be the determining factor. Should it be impulsive, the bear market was resuming, and a Long Term “bear market” would be probable. Should it be corrective, the Primary wave II correction was over, and a Long Term “bull market resumes” would be probable.”
“This week the market surged off a corrective downtrend low at SPX 1159. We received a WROC buy signal, which usually precedes an OEW uptrend confirmation, and it has an 88% accuracy rating. This leaves us with an impulsive uptrend from SPX 1075-1293, a potentially completed corrective downtrend from 1293-1159, and now another potential impulsive uptrend from 1159-1260 (friday’s high).”
“This market is starting to look more and more like the resumption of a bull market rather than an ongoing bear market. Keep in mind, OEW never confirmed a long term downtrend in the US while many foreign markets were in confirmed long term downtrends. And, during the 2007-2009 bear market, OEW confirmed a long term downtrend less than three months after it started.”
“In conclusion, we have updated the Long Term status: “neutral to bullish” awaiting an uptrend confirmation. When this occurs the count carried on the DOW charts will be the preferred count, and the SPX count will be downgraded to an alternate.”
“Once this uptrend is confirmed [the market is not that far away from doing just that] the preferred count would be a Primary Wave II low at SPX 1075 and Primary Wave III already underway. The first uptrend of Primary III would be Major Wave 1 from SPX 1075 to 1293, and the downtrend to SPX 1159 Major Wave 2. This uptrend, then, would likely be Intermediate Wave 1 of Major Wave 3. To confirm this scenario, other than an uptrend confirmation, we would like to see weekly RSI get quite overbought. Something we have not seen since the Feb11 uptrend high. The weekly RSI gets quite overbought during bull market uptrends, and only barely overbought during bear market uptrends. And, [we’d also like to see]the weekly MACD rise above neutral which is another bull market trait [as well as] the monthly RSI substantially clear the neutral zone, and head towards overbought.”
“Technically, the market is already displaying improvement. Our DOW momentum indicator has already made a higher high than the October top, and NYAD market breadth has remained in an uptrend since the October low. Three of the nine SPX sectors we track are in confirmed uptrends, and the housing HGX index has also confirmed an uptrend. On the international front five of the twenty indices we track are in confirmed uptrends. The one concern, at this point, is Corporate bond risk continues to rise.”
“Support for the SPX remains at the 1240 and 1222 pivots, with resistance at the 1261 and 1291 pivots. Short term momentum has dropped below neutral on friday, after hitting extremely overbought on Wednesday. This week’s rally off the SPX 1159 low looks impulsive. The market has rallied to SPX 1260, (8.7%), in just five trading days. During the previous uptrend the market had rallied from SPX 1075-1195, (11.2%), in five trading days. During that last uptrend the market had six pullbacks of 20+ points each. This potential uptrend, while only a week old, has had four pullbacks of only 10+ points each. Less volatility while maintaining a similar upside momentum trajectory.”
“There are two potential counts short term. First, using pullbacks alone, suggests one more higher high before the market has a more substantial pullback. Second, using technicals, suggests the market has just completed the first of five waves up and a more substantial pullback is already underway. We do have a negative RSI divergence on the hourly charts and a weakening MACD from overbought levels. Should the latter be the case, initial support is at the OEW 1240 pivot range (SPX 1233-1247), with more substantial support at the 1222 pivot range (SPX 1215-1229). Short term OEW charts remain positive from Monday’s gap up as long as the market holds the SPX upper 1220s.”
http://caldaro.wordpress.com/2011/12/03/weekend-update-321/
PS: Waiting for confirmation to rid myself of this Bear Shitter suit (Grizzly Adams).
Fly, an opportunity for you to test your IQ and math skills … Only 15 people worldwide have cracked the code so far …
http://www.telegraph.co.uk/news/uknews/defence/8926984/GCHQ-solve-the-online-code-become-a-real-life-spy.html
Pr0t3ct!on#cyber_security@12*12.2011+
Cheater! (Jk).
lol.
Fly, It is So True..this is the Greatest of all Artforms. Drama, Comedy, Conflict..Theater in its purest form. To be a great Artist..takes passion,vision and a natural gift we must be born with. Greed is not required and imho just gets in the way, samething goes with Fear. Not sure how anyone can call this boring.
btw, this week is all Merkozy imho. The ECB rate cut, BoE QE2ing is all priced in so no new surprise. That Short Squeeze in copper from RRR cut out of China and Clam Action should be shaking out now with Copper back kissing 8,000 LME. PMI Service numbers coming out tonight, china under 50, hasn’t done that since 2008..fwiw.
Love this post. Great stuff.
The deal values Zynga at as much as $9.04 billion, about a third less than the $14.05 billion valuation that the company cited in a filing two weeks.
ago.http://news.yahoo.com/zynga-plans-1-billion-ipo-report-023943285.html
GSVC exposure to ZYNGA
http://s3.amazonaws.com/twitpic/photos/full/462151960.png?
thanks. nice post (thats european for great post)