I’m up late on a Saturday night, prepping myself for next week. The news is flashing fast, just like AC-130 gunships over Libya. I think it’s time to discuss losses and how to take them.
Are you ready?
Just do it.
It would be easy and naive for me to simply say “do not buy what I buy.” The reality is, many of you look up to me, for my divine powers, and often follow my trades. Now, if you get MOTR boated or VXX’d, I feel really bad about that, even more so than my own personal losses. That’s who I am. Money is just something that I use to buy shit. It doesn’t define me, which is why I fucking own it. The point I am trying to get across is to stop holding onto losing positions. I can’t condone building long term positions in this wacky world. I cannot promise you anything but death and national debt. So, when you are buying stocks, three conditions must be met for proper risk management.
1. Never build it bigger than 20%
2. Evaluate whether you should cut the loss at -5%.
3. Strongly consider selling all at -10%.
Notice how I didn’t tell you to sell at -10%? Only idiots do that. The market gets hot and cold and coils back and forth for all sorts of oddball reasons. You can’t apply one set of rules for all markets. Again, only idiots do that.
With regards to earnings: at heart, I am a fundy guy. Even though I shit on it, technical analysis is effective. There I said it. I’ve seen Chess, RC, Wood and Scott nail one technical call after another. But, the majority of “technicians” are monkeys, using the religion of technical analysis as a crutch to avoid reading 8k’s. Personally, I believe the future and the present of investing lies within algorithmic trading. Again, there are A LOT of hucksters out there who claim to have the holy grail, when in reality they have shit.
I designed The PPT to tell users what it nails and what it doesn’t do very well. Yes, I advertise its flaws, a cardinal sin for all internet bucket shop hucksters. In other words, there is full transparency as to the accuracy of the algorithm, per stock, per ETF. So if the algo is telling you to sell a stock with 95% success rate over 15 tries, you’re gonna listen. On the other hand, if the hit rate is just 20%, you will know about that and take it with a grain of salt. NOTHING is fool proof and no one has unlocked the secrets to human emotion coexisting with the ebb and flow of capital. The smartest guys in the room have tried and failed. They failed because of hubris.
I have my own money and do not rely on this website to finance my eccentric projects.
Who am I and why should you give a fuck?
I’m no one. I’m the guy behind you on the Dunkin’ donuts line. I am a guy with an edge and a gift at making money in the stock market, doing so professionally for over 14 years. That’s all.
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