You can buy all of the best stocks and still lose money, providing you buy them at the wrong time.
Back in the old days, I would go “all in” and “all out” like a fucking maniac, making outrageous splashes along the way. However, in time, I came to the realization that my buy and sell points will almost always be wrong.
The sooner you realize that no chart or divine intervention can enable you to time the top or bottom perfectly, the sooner you will stop making an idiot of yourself on Wall Street.
Investing is all about “staying in the game.” Preservation of capital during arduous times is key to making a fucking killing when times are good. In other words, you can’t make shit without food, if you know what I mean.
For young/novice investors, I suggest keeping individual positions small, no bigger than 5% of capital. This way you can experience the market, without breaking your face open on a bunch of dumb shit.
In the past, I’d recommend an asset allocation model that would mirror the S&P 500. For example, 20% banks, 10% industrials, 15% tech etc. However, since the market spits on people who do that now, I have altered my investment philosophy dramatically.
Instead of asset allocating, I now hedge my portfolios, via a myriad of long/short trades.
Let’s say I have 100k to invest and I am willing to allocate 70k on the short side, since I am a bearish motherfucker. Of the 70k, I want to allocate 10k into FAZ (300% short banks). Note: 10k into FAZ gets me 30k exposure, since it is 300%. It’s important to recognize the leverage, especially when hedging with upside longs.
With 10k to spend on a maniac etf, it’s VERY important to get good prints. Knowing my first trade will be wrong, I buy an initial 2k or 20% of my FAZ funds, at the market. I get filled at $70.
Ideally, I will buy FAZ in 5 parts, all $2,000 orders.
Right after I buy it, FAZ shoots higher to $74 and looks ripe to break the fuck out. Quickly, I buy more, with the caveat that the new purchase will be sold quickly, since the etf is on fire. Remember, I expect to lose money on my first trade.
But, life does not always work out the way you want.
So, now I have 4k in FAZ with an average cost of $72 and life is grande. The next day, unbeknownst to me, the fucking government reveals some new plan to inflate all bank stocks, sending FAZ reeling down to $60. Now I am fucked, right?
Well, not necessarily. First of all, I was only allocating 70% of my funds to the short side and I did not have a chance to go “all in” yet. To date, I only spent 20% of the 70% or 14k. With 30% set aside for long positions, quickly, I hedge my FAZ and other shorts, buying some FAS amd UYM. Trying to stay in line with my target ratios, I only spend 6k on my longs.
I know this is getting confusing, bear with me.
Let’s assume the market continues to melt up, sending my FAZ down another 10 to $50. Considering FAZ is down almost 30% from my initial purchase price, I decide to buy more.
So I step in and buy another 2k worth at $50. After my third purchase, my average cost is $62.6.
Understanding I am on the wrong side of the trade, I must be extremely patient with my next two buys. After all, they will define my final cost basis. If FAZ is to gap higher and eclipse my average cost of $62, before I get the chance to allocate the remaining 4k, so be it. At this point, I find myself in a hole. Risk management is key, not greed.
So, a week goes by and the market is on an idiot streak to the moon. Aware of my surroundings, I decide to allocate the full 30k or 30% set aside for longs. I buy all sorts of stupid shit, like FAZ, UYM and URE. However, since I base my investments on a blend of price action and fundamentals, my goal to sell a large portion of my longs, if not more, at the next inflection point, otherwise known as the time when I will become Godly.
Remember, my bias is on the short side and I am sticking to it.
A few more days pass and the market is simply out of its mind with bullishness. The news is still horrid, but stocks are going higher anyway. Almost everyone I know is bullish and mostly everyone I know is stupid.
Perfect.
By this time, FAZ is printing $35 and I am down 43% from my initial purchase point, on a 3/5ths position. Assuming I allocated 60% of the funds set aside for shorts, or 42k, and my losses in the other shorts vehicles are equal to my maniac FAZ position; total losses, following a mind numbing melt up, should be approximately 18k or 18% of my starting capital (100k).
However, because I rode the wave of inept optimism with my longs, all 30k worth, my total losses are somewhat muted. Due to my stubbornness, I was late to the bull rally. Nonetheless, I ended up making a sweet 30% on a variety of leveraged longs, or 9k.
So, net-net, my losses are 9k or 9% of my assets, aka “a fucked up start.”
With 14k left in cash, my next trades must be perfect. Bucking the trend, I step in and buy another 2k worth of FAZ at $35, despite my “smart friends” begging me not to. Now, my cost basis on FAZ is $51.94.
A few more days go by and I sense an inflection point. Quickly, I sell off some of my profitable longs, at least 25% of the positions, and allocate the last 1/5th of my short funds, as the market begins to roll over. I get filled on my last trade of FAZ @ $41.
With my target exposure (70%) on the short side fulfilled, my cost basis for FAZ is $49.50. My cash position, from the sale of 25% of my longs (39k), is approximately 9k or 9% of assets—which will be set aside for an emergency or trading opportunities, such as FAZ taking another dive lower or “hot tips.”
Over the next week, “The Fly’s” prophecies come true. The market swan dives into pig shit and vomit. Along the way, I scale out of most of my longs, leaving my long exposure at a mere 5%. Net-net, I end up making 15% on my longs or 4.5k.
As God would only have it, my FAZ position spring boards to $60, gifting me a 20%+ gain. Not trusting the market, I take my profits and go to cash, leaving a token 5% short position.
On my shorts, I end up making 20% or 14k.
Unfortunately, along the way, with the 9k in cash, I made a few errors, due to the market chopping around. I end up losing 2k on erroneous trades, mainly because I listened to the advice of my “smart friends,” who had some “hot tips.”
After it’s all said and done, starting with an initial 100k, I end up booking 16.5k in profits or 16%.
Moreover, I have a 90% cash position and anxiously await to do it all over again.
UPDATE: Wood is talking about position sizing too. Get your BBQ sauce and head on over there now, ya hear?
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That my friend is good free advice right there. Rare. Lots of free advice out there but very rarely is it worth the time to read.
Thank you Mr. Fly
This post is perfect. I am writing about a position strategy that is almost the exact opposite of what you advocate here.
Good times!
You are an effete janitor with grande ideas that are based on rubish sir..
Cash is for pimps and old men. I shall buy you FAS @ 12.89 and sell much higher. Solar will slap high five on the top of your head.
The messiah is here you fool.
Regards
Chuck
I don’t know what that means. I’m just up and in a constant state of “winship.”
What kind of max position size %s do you use for stocks? Also do you scale in 5 parts for stocks too if you can get a better average cost?
When do you decide to exit a losing stock positions? When the pain is too much? Thanks for the post Fly.
Eb:
5 parts is usually a guideline, not a rule.
Often times, I break trades into 10 parts.
Max position size will never eclipse 20%.
As for losses:
When it comes to individual stocks, I sell them when they piss me off. I do not put a line in a sand. I sort of just feel it out.
When it comes to shorts via inverses, generally, my core beliefs dictate how I will trade the markets. Therefore, the paper losses are dealt with by hedging with upside longs or in rare cases, utilizing leverage to scalp some directional trades.
In other words, unlike others, I do not have a mechanical method to stop out of stocks. If I did, I am sure I would have sold FAZ at $35, effectively missing out on the big gains.
Mechanical stops do not mean one misses out on big gains.
However, they do mean missing out on big losses.
Thanks for taking the time to write that. I have watched you do this over time and figured it out, but the explanation is still helpful.
This method assumes high volatility. It helps cushion the bumps when the market is whipsawing around from day to day.
I think you’d be better off using a TA-based system that doesn’t leave your market timing to your fallible intuition. If you don’t have ESP, you are going to maim yourself with your lack of it, eventually.
Scaled trades usually build upon winning positions, not slice it up into equal parts. I like that you recognize your first trade is usually a crappy one. I call it my “feeler” trade and I keep it small. It puts me in the emotional seat of the stock I just bought, for a small price.
Stop orders exist to dump bad trades. Recognize them quickly and get rid of them so you don’t have to waste energy thinking up something fancy. The best traders can dump something and play it the other direction a few seconds later. No emotion, just seeing the momentum and moving with it.
Not sure why you don’t use a McClellan Oscillator or VIX or ?? to time your market swings so you don’t have to play “Dances with Wolves” so much.
But hey, if you make money at it, why the hell change it? It works. And it works for you. Probably not anyone else. Yours would be a hard system to teach.
Wood:
With all due respect, I’ll take my methods over yours. They work for me.
I am sure your methods are tailored for you. Since this is MY fucking blog, I profess my strategies.
You can do your thing on your blog.
Be well.
TA is for the lazy and ignorant, Brian.
However, you are correct in one assumption: my methods are difficult to teach.
HOWEVER, if you are here everyday to read me, you will see for yourself how I fucking game this market like a pig scurrying through mud.
Speaking if market timing – what signs do you look for that signal change is imminent?
How do you avoid the head fakes and panicked moves?
By the way, the above story was true.
As for scaled trades:
When stocks are working in my favor, I utilize the same discipline. I suppose I can do a different post on scaling up.
I’ll get to that next year.
With all due respect, for some reason, we both published pieces on position sizing, within 4 minutes of each other.
I found it somewhat serendipitous and thought it presented a nice dichotomy of position sizing, especially with leveraged ETFs.
That is all.
Why would I tell you how to do it? You don’t need my advice.
nnoco:
Human sentiment is critical. I am in touch with a lot of people and like to trade against them, literally.
Also, I watch for near term catalysts, such as economic reports or key earnings reports.
And, I watch dollar/yen relationships, as well as oil, natty and other commodities.
Essentially, I look for the writing on the wall. I think you know what I mean, especially long time readers.
Also, sometimes, key stocks or sectors throw out red flags, such as the banks most recently.
Wood:
I’m not being a dick. Actually, I’m always a dick.
But, I know our trading styles are completely opposite. I was just trying to save each other the time of having a philosophical debate over trading methods.
Hey, you did great last year. Whatever is working for you, you should continue.
nnoco:
I avoid headfakes and panic moves by quickly hedging to flat when I am unsure.
In other words, if I am long 10k worth of FAZ, I will buy 10k worth of FAS. That may seem stupid, but it gives me time to think the market through.
Typically, it ends up with me selling out of the long for a quick profit, and reloading the short.
We’re in a bear market; so the bias is ALWAYS lower.
Fly, let me be clear.
I do not care to have a philosophical debate with you when I’m fixin’ to get some sleep.
I do, however, like driving traffic to my blog from your comments section.
Win/win
Hell, why didn’t you just ask for a link, you idiot?
there, i attached a link to this post.
Wow…I guess no clowin’ around is allowed in the comments section anymore.
The greatest blog post ever is what I’m reminded of, while reading The Fly’s immortal words on “The Important Matter of Position Sizing”. While this post wasn’t THE greatest post ever, it was pretty FUCKING grandiose and deserves attention! It’s the anatomy of a trade! A fucking blueprint to wealth. Problem is. For most of you. You can’t trade! Don’t ask questions if you don’t understand this blueprint.
A wise man once said.
“Half of you don’t deserve to read this blog half as much as you think you do, and the other half don’t deserve to read it at all!”
Great quote.
Who said such wise words, might I query?
The quote, of course, is one of the first, if not the first quote in the iBC “Epic Quotes” thread.
You may query, but I shall not speak his name for fear he will throw lunch meats at me. I’ll only say he’s banked his share of coin and…. Eh Fuck it! I said it and It’s true!
any way…
What about these education stocks?
ECI APOL LOPE.
Feel free to post some fresh PPT Education Sector Data before Tues morn.
Can I get the hybrid PPT on the ESD
Very interesting strategy Fly. I never argue with what works for others. The amount of risk your strategy exposes you to is much higher than my own system allows, but I’m always willing to look at what others are doing and see if I can learn something and perhaps add new strategies to the arsenal.
You said:
“We’re in a bear market; so the bias is ALWAYS lower.”
Which I agree with 100%. I wonder, however, if your strategy might be improved upon by further limiting risk based on a simple, but I think accurate assumption.
That assumption is that bear markets always experiences bullish bursts of enthusiasm that stick it to the shorts in the near term.
Taking that assumption, why buy an ETF like FAZ when the bears are running? You mention “Right after I buy it, FAZ shoots higher to $74 and looks ripe to break the fuck out. Quickly, I buy more, with the caveat that the new purchase will be sold quickly, since the etf is on fire. Remember, I expect to lose money on my first trade”
This tells me that your first trade is based on momentum and the assumption that a breakdown may get some follow through like it did in October. Problem is, October was rare and not likely to be repeated now that the funds aren’t under the same level of forced distribution.
Instead, why not just exercise a bit more patience and wait for that insane bull run and then start averaging into your position? It seems to me that your risk exposure would be much lower and your reward much higher.
Anyway, thanks for the strategy ideas. I’m going to paper test it using the adjustment I mentioned here and see how it works out.
Fly
I think it’s important though that people respect certain loss parameters and for most people a mechanical stop is what works best.
Not suggesting that’s the case for you as you seem to exhibit decent respect for capital oreservation , but most people aren’t that geared emotionally.
Also, one more question springs to mind here. Averaging down with 5 trades, at what point would you determine you were wrong and take the loss?
Well I have printed out this entire discussion and will study it. Fly your technique is indeed complicated and requires ‘ your mind’ to be figuring out when to add more to your position, when to hedge, when to buy some longs to keep the short losing position from being so large, when to sell the shorts, etc… I can do some of the things you suggested.
I see Brian made some comments, he is the first person I really learned how to do trading in just a few hours or hold for no more than 1-2 days. I am not lazy but I was a beginner and his method is helpful for people who are getting started.
I just now went to ‘Dons’ website and he is get in and out with 10% gain, buy on support. But I also found a comment on Don’s website that hits directly ON ME….so I am going to study more of his site. He talks about a problem I have ALL THE TIME….See below a comment from his website:
“2. Where to Exit
Did you know that for every stock that keeps moving higher after finding support that there are at least five that make a small move and then stop? Again, this is due to professionals who have learned to fade those using average stock technical analysis techniques. Did you also know that it is relatively easy to predict the first small move, but that it is increasingly difficult to predict trend development?
We have found that money in the hand is worth much more than potential money left on the table. Thus, we show you where to take profit quickly, usually around 10%, so that you can move on to buy your next stock.”
******
I have this problem often…the stock never rises beyond just a small move, this is why I went to ‘ETF” trading like TNA, TZA, BGU,BGZ, etc…at least I normally got enough movement on these 2-3x ETF’s to get in and out. I am sitting on three stocks that are problematic making a small gain and just sitting there. Brian’s book discusses confirming your buy and sells using multiple time frames and MA for confirmation and buying when a stock breaks out.
Thanks for posting this Fly, I have kept buying a stock as it falls hoping to get a lower price on the rebound and honestly I got screwed- BIG TIME this was with Google and Apple and during the big crashes last fall. I have avoided buying as something falls ever since then.
Lots to think about.
PS..This is where I got into trouble with Brian’s technique. He requires that you buy the stock after a ‘breakout’ on good volume and I would buy something just after the break out and BAM…it stopped and wouldnt go any higher, exactly what Don was talking about. I didnt know how to solve this problem so that is why I started looking for more answers. I finally had to sell Goog and Aapl for huge losses…another problem…when do you know that averaging down is not working and you have to just ‘ eat the loss’. I lost a lot of money with that strategy.
you better kept your moth shut, fly. the kind of trading you described is poor.
Good Post.
I was almost always 100% in and out in the ’80s up to the mid-90’s only because trends were easier to spot and took longer to develop than now days where the news is instantaneous and the hegdies use black boxes and voodoo.
The futures just took a dump (compared to last night).
Off to clean gutters and pick grapefruit.
Happy MLK day to all.
I sold pounds and sterling against the buck a bit higher than here . they look like shit. have stop at entry levels and look for a pretty decent move.
Again, no point in trying to be hero in this. If I’m stopped I don’t lose any capital.
Euro looks like it could try to break through 1.30 in the next 24 hours. However there’s no point in trying to milk a dead cow if it doesn’t work.
Trader C.
The economic shit out of Europe is horrendous. The EU have just upgraded 09 GDP to be down around 3%. Meanwhile the stupid fucking ECB still has rates at 2%.
The UK had to fund more support to the banks there. Everything looks really ugly.
Instead of doing all that mental mumbo-jumbo, Fly, why not just take your money and stick it into a good, diversified, mutual fund?
Dennis
Perhaps because the good diversified mutual fund lost 30% last year and the flyswatter made 70%. Odd, hey?
j I wouldn’t know, As I said on television last year, I recomend you don’t look at your statement if you suspect it is down.
Fly – Great post. It sums it up very nicely. Thanks.
Way, way, way way way way waaaaaiiiiiiiiiit a second….
You voted for whom??
_______
Lady G- I don’t know how Brian did last year (I assume you mean B. Shannon), but I do know that buying strength and momentum has slowly lost most of its edge, over the past 10 years, but has recently taken a hit over the past 2 years. This loss of momentum in the market is quantifable, as is its reverse, which is a market that likes to return often to its mean. When will buying strength, breakouts, momo, etc. work again like it used to? Who knows.
That’s not to say you can’t profit now from buying breakouts and momo. You’ve just got to be extra-disciplined, superbly patient, and using good money-management/position sizing.
I liken the last year for breakout traders to be like playing a game of whack-a-mole, where the mole is the stock, and the whacker is the market. As soon as that little bastard sticks his head up, WHACK!!! and he’s forced back down his hole.
This is to “J” or “Jakegint”
What is your position on manipulation?
http://www.gata.org/node/7095
Euro banks getting the homo hammer so far today.
The Fly is God.
Woodshedder how true you are, I had many moles get whacked on the head. Good stocks just whacked, I realized that BS techniques while maybe worked for him or in some better market were not working for me so I went in search for more knowledge. Well I am always searching for knowledge- I try a system for a while and if I cant get it to work for me, I move on. Did Zachs, Trade the triangle, personal newsletters with buy signals,books, classes, etc…
Sr Fly’s technique reminds me of a Chef, perhaps that is why he enjoys cooking. He’s not an assembly line of exact ingredients you put in and get out results, he is a creative collection of controlled chaos that he ” as the Chef” tweaks and tweaks until he gets the perfect product.
Then he starts all over again using some of the original ingredients but throwing in some new stuff to produce yet again some great end product. If at some point the whole thing isn’t working he just scalps some added ingredients and BAM….perfection!
Off to play some tennis (72 degrees) …have a good holiday everyone.
.
…mostly everyone I know is stupid.
I can believe that.
What is your position on manipulation?
My position is that it makes too much sense for the major CB’s not to be doing it, while trying as hard as they can to paint gold as “irrelevant.”
Sort of like that allegory about the Devil’s greatest deception.
__________
Speaking of chefs, I was flicking around the hoops games on Saturday (Cards take out #1 Pitt!), and came across that Iron Chef thing you were talking about.
First, I was shocked at the level of talent they had on that show. Didn’t realize it was that big a deal.
Second, while my wife and middle son (who seems to be a budding chef, he made two meals yesterday for the family) were entranced, I couldn’t watch more than three minutes of it.
My ADHD aside, after ogling the nice Viking ranges and other high end equipment, I found I was bored.
__________
Now all you clown fuckers understand how the Fly wins when he appears to be losing. That and flitting about in a plutonium powered time machine, swinging his clawhammer at fucktards.
manipulating what though, Atlas.
they’d manipulate everything if they could. Don’t get the big deal about the link.
J – Do you think that one of the CB’s formal goals is to manipulate the price of gold down?
I am not sure the link is a big deal either, was just curious to your opinion.
It comes up a lot in my circles, and you seem to have quite a handle on CB’s and history.
Atlas, the website Seeking Alpha did a very nice analysis a while back showing that there is virtually no correlation over time between the dollar and the price of gold. Gold bugs think that gold is going to the moon when the dollar starts to inflate again. I won’t argue that the dollar won’t inflate once the credit crunch stops drying up supply but I wouldn’t be throwing all in with gold in response.
The same site also showed that stocks were by far the best inflationary hedge over time. Not sure that correlation will survive the next couple of years but don’t depend on an inverse correlation between gold and the dollar as it just doesn’t play out in reality. You can google for the article if interested. I have it saved somewhere but don’t have time to look it up at the moment.
Fly,
Excellent post. Based on your past posts, it seems like you hold your positions for a only a few weeks. Is there a reason why you don’t usually hold through pullbacks? With the kind of analysis that you do, I would’ve thought you would ride these things out for even more ridiculous amounts of coin instead of short term sentiment swings.
You need an Epic Post section to file this under.
Keep in mind, the above story is an extreme scenario. I held faz due to my strong belief that the banks were doomed. If I was buying a stock, there is no way I’d hold from 70-35.
I would have sold it all around 65.
I have very little patience with indiv equities.
Also, to answer dons question-
My first buy was a tester. My second buy was based on a breakout. Normally, I wpuld be correct. However, like I said, the fucking gov’t came out with some news that changed everything.
Speaking of the gov’t, I got an itchy feeling last week when my RBS preferreds were running up amidst the carnage on the US bank side, and dumped all but a fraction.
Turns out that itchy feeling was from standing in the shadow of an approaching asteroid.
___________
Screw savings up for college tuition, I’m getting the boys a half dozen of these, and some blindfolds.
_________
“You need an Epic Post section to file this under.”
——————
Agreed !
Good stuff, Fly !
.
Good stuff Fly-
I discovered your site towards the middle of last year and this strategy saved my cajones more than once last year as well as my year.
A file folder on this site would be a great addition to store these gems in, no?
As a side note, I screwed up holding a large quantity of SKF from Friday without a hedge, I might have to do the Fly Shuffle tomorrow a.m., or not.
Anyone know who Lyman Trumbull is?
Well, he just may be inaugurated mañana.
Fascinating stuff, Juice.
Great post fly
Agreed Fly-
Position sizing is the one of the most important but least understood components of trading. I have learned this the hard way. Staying with a disciplined system is absolutely essential.
I would agree with j though that a mechanical system is best. It takes out emotion. It has been working better for me lately anyway
Awesome post Fly!
Yeah, I got shafted with my RBS holding.
There are only a few reasons to use a stop:
1. You are over-leveraged
2. You don’t trust your future-self
3. You aren’t monitoring your positions often enough (runs parallel to #1)
4. You think there is some magic number that “will hold” and save your lame trade.
5. You have zero concept of scaling in or of using proper hedging products (leveraged ETFs, options sales, spreads, etc)
Now…all 5 of these reasons are extremely valid reasons to use stops.
More importantly, however, all 5 of these reasons are extremely valid reasons why you shouldn’t be trading at all.
Any newbies reading Flys methodology above – be careful. It works for him, but to most it looks awful complex. Prolly best kept 10x simpler.
There are 3 reasons to trade with a stop:
1. Your an idiot if you dont.
2. Dont forget #1
3. er … thats it.
Fascinating, or just plain nutty?
One very important case involves Oprah Winfrey, who has been identified as the reincarnation of James Wilson, a Caucasian leader of the American Revolution and Signer of the Declaration of Independence. Wilson also loved books, as does Oprah, and he taught English literature at the University of Philadelphia. Of interest, Wilson invested in frontier land that eventually became Chicago, the place that Oprah has made her home.
Another case that demonstrates a change in race, which will be of interest to sports fans, is that the Caucasian inventor of basketball, James Naismith, has been identified as having reincarnated as African American basketball star LeBron James.
Bong! Bong! Cuckoo!
________
With all due respect to your considerable trading talent, Andy, stops can be a very valuable tool that might be part of someone’s system trading or for those of us who do more than trade online (like work at something else) and find it impossible to spend the entire trading day actually sitting at the screen… and still want to swing trade.
To paraphrase the old Almond Joy commercial, sometimes I feel like a stop and sometimes I don’t, depends on the trade. JMHO – I’m not a big trader, and know it, so feel free to disregard.
Leveraged ETFs’ numbers don’t always add up.
http://online.barrons.com/article/SB123155505487470527.html
No worries boca….I just think you have to match your trading style to your availability. If you’re swing trading from work, I’d always exit at next market open after an alert (instead of a stop) is triggered.
I think, based on my experience, that it would improve your performance.
Private Parts, thanks – Cramer once proclaimed on his show with much enthusiasm and certitude, that one should *never* use a stop, they were unnecessary, and essentially for small-size cats. Ironically, this was mentioned with regard to some stocks which he held and later lost a great deal of money on. What happened to his money management principles? Everybody knows I don’t love Cramer btw.
Jake, wtf???? resurrected civil war politicians? File under more things not to believe on the Internet.
Andy, it would probably improve your performance, but what I do is working for me, which is kind of my point.
Its a damn shocker that Jake don’t go for that kind of shit. I am shocked ! shocked, I tell you.
A few various quotes from some famous guy:
“Over the course of incarnations you shall train your spirit and your consciousness and allow them to develop to perfection, so that you become one with Creation.”
But X replied to them, “Truly, I say to you, some of you who have followed me will embrace the wisdom of my teachings, so you will be spiritually great in reincarnations to come. But some of you will not recognize the wisdom of my teachings and will disseminate erroneous teachings about me. Those ones will have difficulty finding the truth in future incarnations.”
“through his kindness, I have added to my knowledge in this incarnation by gaining great insight and learning true wisdom, which was imparted to me by his teachers over a period of forty days and forty nights.”
Boca….fair enough. My posts are never directed toward the successful. I prefer a large audience 🙂
Karen Tso is Grace Kelly reincarnated. I am Bruce Lee reincarnated.
Tried to edit my earlier post – and didn’t make it in time, sorry about that.
Meant to mention that I work for myself, so when I’m at work I’m in my home office and can enter whatever orders I want, but most days my business comes first, trading second.
I love you too, Brucey, you lovable nut. Maybe next time you are pushing the Star Magazine celebreality religions that cadge off the many already in existence, you might want to reconsider the one to which you were born? I assure you, the Talmud is a much more fulfilling read, even without the space aliens and crystals.
______________
Meanwhile, I also love Charles “Last” Gasparino:
(From today’s NY Post)
It’s not the only buzz brewing at the cable channel. On Friday, CNBC on-air editor (and former Post reporter) Charles Gasparino got into a nasty squabble with Media/Technology Editor Dennis Kneale over whether or not Citigroup CEO Vikram Pandit should stay with the financial giant. The financial blog Dealbreaker described it as “a shouting match only dogs can hear/understand.”
The two had previously butted heads after Gasparino, in a segment on ex-Gov. Eliot Spitzer, jokingly accused Kneale of having been a client of call girl Ashley Dupre.
LOL! Charlieee!
___________
Thunder:
I think a “meeting” is due between yourself and This “Walters” guy.
Like, yesterday.
_______
OK, show of hands, who has a BamaBoner going into tomorrow?
And I didn’t even use Viagara!
Jake, wtf???? resurrected civil war politicians? File under more things not to believe on the Internet.
Kind of coincidental, one might think, no? And what should one draw from this information, that there are only a very small handful of “special” people in the world, who are being born again and again?
Doesn’t say much for the chances of the average schlub, does it?
Of course, it would fit with that whole “Fly- Jesse Livermore” reincarnation thesis thing, though.
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Jake-
Yes, I know about him. One well-placed kick in the groin and he’ll never think of placing his hand on my destiny’s hip again. Crocodile Dundee will be feeling much like this guy:
http://www.youtube.com/watch?v=tm6cqpJvsT4
Jesse spinnin in his grave
Jake – you still in CBL?
Moobs –
Just the preferreds.
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They say empty vessels make the most noise?
The Fly demonstrates how to explain dollar/cost averaging in as many words as humanly possible. I’ve seen it explained in brochures in 5% fewer (and more interesting) words.
Hardly FAZinating Fly, you do go on sometimes, I stopped reading after the first 20% went in. Wanted to avoid a headache.
I’ll say no more, wouldn’t want to be a hypocrite!
Say goodbye to your future USA, tomorrow is the first day of your swansong, such a shame you’ve all been shafted by dumb/greedy bankers and politicians.
Who is more senile – Warren Buffett or Tom Brokaw?
Tom should just farm algae.
Hey I have a short, interesting, sentence for you:
Go fuck a bag of cilantro.
Jake – dumped all my WRIpD at 15.8somethin, which proved to be smart (thus far). Made about 20% on that trade.
My new thoughts are, I’ll get to buy lower. Hell, I could buy back Monday at the open 20¢ below my CB.
Also, why not buy DDR in with the reit cohort? They have no div as it stands for first part 09. How much worse can it get (imagine alfred e. nueman what me worry face)
As it stands, you still know my favorite high-yielding, shouldn’t have to lower the div, and won’t go bk reit is WRIpD.
More importantly, Moob, when, in your esteem, should I smoke one of my opus’?
March 1st No matter what?
The day I am at 10% YTD gains (could be next week, half way there)
20%?
My birthday?
What say you?
I am the reincarnation of Jimi Hendrix. Consider:
My african-american friends call me “the blackest white man they know.” This is true, they really do.
I play electric guitar.
I am currently enjoying the benefits of oxycodone, due to a foot injury.
I have “big feet.”
I smoke (not hippy lettuce, but prefer nice cigars). Opus X in my mouth right now.
I have made love to the same woman thousands of times, as opposed to 1000s of women one time.
Deal with that! Purple haze, bitches!
http://www.youtube.com/watch?v=5hSW67ySCio
In a past life I probably fucked a Mexican girl named Cilantro.
Danny – smoke an Opus X anytime you can sit and enjoy it. Don’t rush it. Peppery, high nicotine. Maybe some scotch with it?
New U2 is out. Sounding great!
http://goyb.u2.com/
As it stands, you still know my favorite high-yielding, shouldn’t have to lower the div, and won’t go bk reit is WRIpD.
That’s a good’un.
_____________
Moober:
No, I’m the reincarnation of Jimi Hendrix, ’cause I just threw up in my mouth after reading your post.
______
Don’t rush it. Peppery, high nicotine. Maybe some scotch with it?
Woodford, or one of Swannee’s Pappy’s if you can source it.
Tough to source, though, out there in Godless Kally Forn Ia.
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Moober, I’ve been looking for you. Why won’t you call me back?!
Jake – pass out on your side, not your back. Learned that the hard way, last time ’round.
Dang, that new U2 track kicks ass.
I practice Fly’s system in my own simple way — often to exit big bad positions and get back to square. Correlate the day’s news, the overall macro trend with the market’s current insanity and get a gut feeling where stuff’s heading over the next few minutes or hours. No stops with etf’s, no hedging, possibly some intra day reversal trades, no individual stocks.
Trust instincts, have cash for adjustments, take profits, seldom hold overnight. Like markets where i can form a solid conviction ahead of the day.
Probably grade school system to many, but works. Wouldn’t trust TA.
Ah, such sparkling repartee.
“I buy all sorts of stupid shit, like FAZ, UYM and URE.”
I am sure that is a mistake there. That first “stupid shit” you are buying was supposed to be a long. Therefore it should have been FAS not FAZ. You should only have had bought 3/5th at that point, and be hedging your longs. Otherwise you losses would have been 57%, not 43%
Confusing, I know. But bear with me. 🙂
Fly, thanks for the informative post. Proper position sizing is the closest thing I have to a New Year’s resolution.
Thanks for everyone else’s informative comments, also. Group hug. I’m sure we will all go back to feeling the hate really soon.
Jake … as for the cult I was born into: in reform & conservative judaism, they do not teach, let alone mention reincarnation. But orthodox, hasidic, and particularly kaballah, they do.
Humans not originating from earth play an indispensable role in the majority of earths religions.
Unless you think the earth is still the center of the universe … uh, I mean, unless you think the earth is still flat … uh, I mean, unless you think the only intelligent life in the universe, exists on this speck of dust, aka planet earth; in the cosmic scope of things.
No Bruce, I believe the Greys exist.
Underneath my desk.
From there, they direct all reincarnations.
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funny
http://www.youtube.com/watch?v=aQHp9bGVDB8&eurl=
Forget about reincarnation. This is all just a computer simulation anyway.
http://www.simulation-argument.com/simulation.html
From the comment section (really funny):
i agree with a past life myself as i remember that i was a antilop )(sic) in kenya when i went there about 3 yrs ago i felt weak only to remeber (sic) i was in the place i was eaten and all my ancestry were taken at the time, still hurts
🙂
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you HAVE to watch this…..ROFLMFOGHGJFJDKERIKDIIOS!!!!!!
http://www.youtube.com/watch?v=DcKSwRzG0pg
Check out my new 10x levered inverse material fund : SUKM
I guess I missed quite a bit while I was out and about today, reincarnation, greys, asteroids hitting RBS, stop loss tom foolery, OpusX, Double inverse ETF’s, and WRIpD etc. Quite a potpourri. BTW the year of the rat ends on January 25, 2009. I for one will be glad to see it go.
This was one of the classics.
Bearing in mind that, I’ll never think in this way, I’ll file it as a reminder to figure out who not to be on the opposite side of a trade when it comes time for the inflection point.
First ye get the time machine…
Then, ye get ye a pair of these!
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Futes softening quickly.
Links to websites authored by REGISTERED SEX OFFENDERS are illegal on iBC.
Thanks.
Thanks for the schooling Fly, really.
One problem with stops is that the fucking market makers have the ability to see where they are placed. So you have to set your stops lower than where everyone else sets them, and everyone else sets them just below technical support levels.
So when I say use stops, I am saying they are good for when bad news happens and you are about to lose your ass, but your ass gets caught in your own net before it hits the ground.
If you can set the net to reduce risk, and you don’t, then maybe you like risk. Maybe you get off on it and it helps you trade better.
Other than that, stops are pretty useless. Though trailing stops is a whole other art form.
“Well, not necessarily. First of all, I was only allocating 70% of my funds to the short side and I did not have a chance to go “all in” yet. To date, I only spent 20% of the 70% or 14k.”
call me stupid Fly, or a n00b wants to learn more, how come you have only spent 14k on FAZ while you only bought 2/5th yet? I am def missing something there and I would appreciate if you elaborate on that. Am I concentrating on the wrong thing?
One other thought — John Ehlers has created black box trading systems that use only technical analysis, and that profit without human intervention. The shit works. I’ve discussed this with several hedge fund managers, and industry gurus, and they tend to agree with me on this point.
Plus, Dimitris Tsokakis was my mentor on the Amibroker forums 10 years ago, and that fucker OWNS people like the FLY and eats them for breakfast. He’s the real shit. And he’s all over the TA.
Tits and ass. Works every time.
Jim Rogers says the UK is finished – nationalized banks plus end of North Sea oil. Maybe all those third worlders will stop moving there now. China and Japan and India need some “diversity” and “multiculturalism”.
Awesome!! I’ve lost out on some great potential profits due to stop losses. That said I’m also at my computer 24/7.
That said I was jumping in and out like an idiot with 100% of the capital I was going to alot. As you said like a fucking idiot or something like that. I’m buying in much smaller chunks coz as you said the first position you buy in usually sucks or atleast mine do.
Great post really like this blog; thanks for writing it.