I’ve had my share of blow-ups, being a manager of other people’s money, as well as my own, throughout the years, dating back to 1995 or so. Long ago, I believed the only way to get rich was to put all of my eggs in one basket, then watch that basket carefully—a la Carnegie.
Using that approach, building mammoth positions in a select few stocks, I “enjoyed” massive winship, right alongside HORRIFIC “losedom.” Being young and clinically insane, I put all of my personal savings in America Online, prior to the big-dicked moves in the stock. I was, in a word, NOTTOBEFUCKEDWITH.
Luckily, for my sake, AOL aka AMER turned out to be a once in a lifetime winner, returning several thousand percent my original investment.
Fast forward a dozen years, I am far more timid with my positioning. Generally speaking, I don’t allocate more than 10% of overall capital to any single name. However, from time to time, like in the case of my famous Microvision, Inc. [[MVIS]] position, I make exceptions.
At the present, I have a rather large and stubborn position in Flotek Industries, Inc. [[FTK]] . “The Fly” of 12 years ago would have been doubling down on this stupid bastard of a stock, all the way to $1.50. However, for what I have going on, blessed by the stock Gods with large dicked gains, I have zero motivation to swing for the fences. My buy orders are small, thanks in large part to my 70% year to date returns, on top of the 60% in 2008, on top of the 27% in 2007. You get my drift.
If you insist on building large positions (anything more than 20% of assets), be sure to know what the fuck you are doing. I know someone who lost over $2million in a certain penny stock, back in 2007, due to him chasing the stock lower out of ego. As a matter of fact, this man never researched the stock he was putting his net worth into. Back then, the market was so easy. Every single oil and gas stock was doubling and tripling in a period of months. So, he just, sort of, bellied up to the plate and went “all in” on a name he knew nothing about. Despite my daily warnings, he kept buying and ended up losing 75% of his net worth in a bullshit scam stock.
Don’t be a fucking asshat. The market is designed to fleece fuckers like you (the general retail investor).
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Hmmm. Never heard of a situation like this. Who would be so foolish?
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Oh yeah. Me.
lots of people Boomer. lots.
How do you like the new PPT pitch page? Pro right?
Click on add to see.
Looks very crisp. Love the authentic testimonials. $1/day positioning is smart. Wonder if there are ways to show how easy it is to make back the cost? “My name is MOOBER, and I placed my first trade with PPT info (bought FTK at 1.5, sold at $1.92) and made back my Distinguished Gentleman membership in 8 minutes. Thanks PPT!” That sort of thing.
The whole site, really, is highly improved. Jeremy is doing good work. Not easy to build and maintain a site with this much content and traffic. Congrats.
(But I’d still love to see you lean toward the orange someday in the future).
I have every intent joining the PPT. I’m just a lazy ass (and not working very hard on trading right now). Soon. Looking forward to it.
Moobs – What are you waiting for? $1 a day…
I know. Lots of reasons, none good. I am joining tomorrow. Really.
The comedy alone is worth it.
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If I could find a reason to make back the $1 a day, I would also join. The Fly is one of the rare traders on the Internet I trust that much(this post is nothing short of excellent btw).
Unfortunately I’m an addicted put seller and often drift to names that provide the downside protection(read put premiums) I like to see rather than a name that may take off immediately.
I’m sure it works great(Henry is a perfect example) but it’s not my style. Hopefully people get that here.
Fly, The pitch page is very, very nice. The testimonials really help to explain the PPT. I thought I knew what I was getting into when I subscribed, but it’s not like any tool I’ve ever used. The more I use it the more useful it becomes. Dollar for dollar it’s the best investment tool I’ve ever used.
MUCH better, nice work ‘cenzo/fly.
Looks great!!!
Market Futures aren’t looking good…. the past two options expiration weeks Monday was a bad down day and then rallied the rest of the week big time. I got spooked out of a couple 400%+ option gains because of a bad Monday. Fly – What are your thoughts on this happening again? A bad Monday and the big gains going into expiration Friday? Also, I am long time reader of you blog and would like to say you have great taste in music. I too share a love for the late 80’s early 90’s hip hop.
Futures are down a bit I suspect because Obama slapped a tariff on Chinese tires I suspect as payback to some of the Unions.
The Chinese say they may retaliate
Herbert Hoover here we come?
http://www.ft.com/cms/s/0/f67c6fe6-a024-11de-b9ef-00144feabdc0.html
PS Different TC, by the way.
Welcome to the asylum.
Crap – I didn’t see that in the 60 Minutes interview.
The Chicoms have already retaliated this morning. My guess is that the Obamatons will eventually back down.
For Democrats, there is no past to review — everything is “the future.” GK Chesterton in “What is Wrong w. the World” — written in 1910, btw — mentions this very thing in one essay… of course he is referring to the “progressives” of that day. Nothing’s changed, much.
Something as simple as the Smoot Hawley experience, a lesson learned by juniors in high school, is lost upon these utter, utter asshats.
It’s infuriating.
________
Jake:
The Dem(olition) party thinks they can remove the obstacles imposed by economic laws through legislative fiat. I think a good number of these fucking morons actually think they can ignore economics laws.
The guy in the white House is a friggen moron.
it was only in the last few weeks Barney Foggot was peddling the idea of offering heavier aid to new condo buyers.
These people are fucking insane.
You can write, j, and that’s not boring. It’s outta control here. The Oz ETF is EWA – I may buy a little on this dip.
j can’t stop watching the news.
Seriously dude, let it go.
Actually, that quote, “Put all your eggs in one basket and watch that basket carefully” is from Gerald Loeb’s the Battle for Investment Survival.
Nope: http://thinkexist.com/quotes/andrew_carnegie/2.html
Ah thanks Yogi. I do not recall Loeb mentioning Carnegie, but maybe he did. It has been awhile since I read the book.
Fly wins again, albeit a small victory. It is a victory, nonetheless.
A victory against me is no small victory. They do not happen often, even for you Senor Tropicana.
Yes Sir Mr. Fly,
I learned that lesson Friday with USO. I ‘m a dumb ass, I even knew better!
Getting spanked in that one myself if it makes you feel any better.
Fly, where is the link to your recommended books for reading? Can’t find it.
i will get that back up.
Read The Book of Business Wisdom, Gold hard cover version.
Fly,
What a post, late on a Sunday nite, hangovers wearing off, kids to bed, the world mellowing out, I’d swear, I thought for a second like you’re almost human or something….
All kidding aside, thanks for sharing stuff like this, it really helps. I’m thinking it’s time for the boys to “let some air out of the balloon.” Can’t let gramma and grampa start thinkin the market is a casino again. Might be time for a healthy elevator shaft test. On that note, I’m sure DRYS is best thing since sliced bread on the PPT (I’m bringing back the bottles and joining with MOOBS tomorrow, pinkie swear) but can you please cut it out with that shit? It’s like watching you walk around with a lit M-80.
LOL.
Thanks
Fly, I greatly appreciate your commentary day in and day out, and find myself hitting refresh like a crackwhore with bleeding gums hitting the pipe.
I am a new full time trader, with $25K and only about $15K of it deployed at any one time. I am about |—-| this far from becoming a PPT member. I currently am doing all I can to learn technical analysis and this site has been fantastic for it, along with the recommended reading. At this point I have only a subscription to stockcharts.com for the screener and to annotate the charts. Last month I realized 5% on my positions.
Your above lesson is great, and I am left wondering if it is also a proponent for risk management and diversification. Or is it egging me on to find that single blow the fuck outta everything stock and put all my eggs in that basket.
Do you find yourself trading “timidly” because you are trying to protect gains/protect other peoples money, or because you like to buy Mrs. Fly nice things? Is this a more evolved trader/money manager position that you have arrived at after years of successes and failures? What would be the first and foremost advice (besides joining the PPT) that you would give to a new trader?
DO NOT THINK YOU WILL BE A MILLIONAIRE WITH 25k. Know your positions and treat your money as if it was all you had.
You can be a millionaire with 25K, but it might take 20 years of successful trading to get there. And that is if you don’t buy your wife shit with the profits before you can compound them.
So very true
Especially the Woodshedder response. I don’t agree with his ‘we’re fucked for the next 6 months’ but the guy is clearly married and knows his shit.
lol..
I appreciate your candidness. I am not hoping to reach the the 7th digit in my trading account. However I am hoping to reach the 6th. I look at it in this way – if I can make 5% on 100K monthly then I can supplement my wife’s income. So far, the 5% on the 25K was definitely because I was scared shitless to be negative overall. Yes, for every 1 trade I was up 10-13% I was down two or three trades 2-3%. Of course positioning is what matters, and I am trying to make this a tangible monthly income.
I believe that by having realistic expectations I can achieve them. Like Woodshedder says, I am more interested in using my money to make more money then I am to buy things with it. Hence thats why I have $25K after working jobs where I never made more than $60K in a year.
I remember the first time I had a comma on my paycheck, and it wasnt that long ago.
5% a month is not a realistic expectation.
Buffalo,
Be careful about position sizing and looking for that one stock to inflate your account – so many new traders have blown out their account this way. You may get lucky doing this but without proper position sizing rules in place you will lose money. The Fly is correct about allocating a small percentage of your overall portfolio to each trade. Maybe 10 percent is too small on a $25,000 account as commission and slippage will eat away at your profits. As a rule for new traders, do not risk more than 1% of your portfolio on each trade.
My advice to you is to focus on being the best trader you can be. Develop a sound trading plan and follow it. Read lots of books. Keep a journal for your trades and be sure to learn from your mistakes. Entries are important but exits and position sizing are equally if not more important. With $25K you’re unlikely to trade for a living, but if you can persist then over time you’ll make it as a trader. Remember, the odds are stacked against you from the start, so you need to minimize those odds.
Congrats on your 5% gain last month.
BillionBucks
Tim’s latest post was unbelievably pathetic so I let him know.
Normally he deletes my comments.
‘I appreciate that. Yes, I looked at TA’s twitter activity, and his favorites seem to be TheFly, Howard Lindzon, and Andy Swan – – all of them are kind of in the same genre, although to varying degrees (disclaimer: Andy is a colleague of mine and I consider him a good egg).’
Andy is an excellent trader(unlike Tim he actually makes money)
Yes, TA, now his comparing viewer stats to somehow re-affirm what a great guy/trader he is. He’s so pathetic it’s not funny.
It’s such transparent bullshit that it’s no longer funny. What a douchebag.
I’m sure lemonj has something to say about Knight latest affront to trading.
What’s interesting about the latest stats is that his numbers began to increases just when the market began to rally after March. He doesn’t seem to realize that it means the losers are congregating there for some sort of solace….. like going to his Friday night bar to celebrate the shellacking taken that week.
The problem with this is there are so many things wrong that I can’t focus enough to do justice to a single one. For a guy that is constantly claiming to understand the internet so well (since he was online back when they delivered the packets by horse) he vastly overstates the significance of this figure to the point of invalidating everything else he says. Traffic on the internet means jack squat, monetization is all that matters so let’s see some figures on subscriber growth or advertising income instead. Tim’s calling card is hypothesis fitting, he sits around all day searching for internet nuggets that fit some big picture statement he wants to make. He does very little research or original thinking in this regard so if you press him on anything he just crosses his arms like petulant child.
Among his best defenses are comments about how his detractors must not be getting enough sex because why else would they take such issue with him, meanwhile he is on his 23rd post for the day (not to mention the time he must spend on other sites like this one). Being married much like having children is NOT an accomplishment (and it doesn’t make you less gay). There are plenty of ugly wives and drug-addicted children out there to call that measure into question. Come to think of it measuring ones manliness or stability by their marital status is like measuring the success of a web site by traffic alone, it’s only part of the story.
And by the way, scrubbing that third site that way is kind of like adults spelling out the curse words in front of a 12-year old, the kid is old enough to spell so it makes you look like an out of touch ass.
He’s just drawing traffic from those other bearish sites as they implode. As usual it’s not really about anything he’s doing that is particularly wonderful.
Wow Lemon, remind me never to get on your “wrong side”. You’ve nailed it perfectly. When I saw the blacked out third site I thought it was something an eight year old might do. I’ve removed the SOH from my saved tabs. No need to waste any more of my time there. I’ll find better contrary indicators.
successful, non-mediocre people who “know what you’re doing”,
how many times have you blown up your account? have any of you been in a position like Fly’s (huge stake in one stock, a la Carnegie) and been on the other side of the curve, but gotten back on your feet, learned from the mistake, and gone on to success?
Or, have you always been shrewd to preserve capital and disciplined allocation (a la buffet, somewhat)?
Nearly lost my business during the dot com crash. I bounced back by way of doing a 180 on investment strategy.
The world’s gonna end sometime soon.
This jackass is going to display corpses having sex. He should throw in a mother corpse aborting a little baby corpse while he’s at it.
http://www.reuters.com/article/oddlyEnoughNews/idUSTRE58A4Z220090911
I find it surprising that more hasn’t been made of the tax to retail traders to fund the health care bill …
Proposed Funding For HR 676 Program
Maintain current federal and state funding for existing healthcare programs; employer payroll tax of 4.5%, an employee payroll tax of 3.3%, in addition to the already existing 1.45% for Medicare; establish a 5% health tax on the top 5% of income earners; 10% tax on top 1% of wage earners, 1/3rd of 1% stock transaction tax, closing corporate tax loop-holes; repeal the Bush tax cut for the highest income earners.
Yes that is 0.33% on every trade. So what does that mean? If you trade 1k of MSFT @ 25, you pay $165 to buy and sell it. Compare that to now where you need to scalp 2 cents to make a profit, now you need to make 17 cents to make a profit.
Do peeps think this is not going to go through?
No way. The market will shit the shower over the next 6 months, and then it will all be about helping out the markets (again).
Citigroup tonight downgrades POT and MOS to Hold, cuts target prices to $98 & $54.
Long story short:
Fall Potash Applications Likely Weaker Than Expected
Chinese Contract Delays Create Price Risk
Debt-laden Producers Threaten Oligopoly Pricing
Farmer incomes have fallen 38% Y/Y; many cornbelt farmers are losing money with current spot corn at ~$3.15, which makes them hesitant to spend money.
others:
E-Trade ETFC: Raising to a Buy — Increasing rating from Hold to Buy and TP from $1.50 to $2.30.
NILE: Downgrading to Hold ( Again ??!?? Shocker.)
also, no ests or ratings changes (still at Hold, $19.50 trgt), but they did say this about PALM:
Price Cuts Concerning, Especially as PALM Likely Bears Cost — Recent $50 Pre price cut at Sprint is concerning & raises questions regarding sustainability of demand. We’re frankly a bit surprised to see a substantial price cut less than 3 months into “the most successful launch” in Sprint’s history. Additionally, our channel checks indicate PALM is bearing the brunt of the $50 price reduction.
My poor wife has been having to deal with my “big position” for a very long time now. She is a tiny little thing, too.
Moving on, the market seems bound and determined to reach 10,000, regardless of the facts.
Joe Friday (or perhaps Art Cashin) wouldn’t have liked it one bit.
Whenever the Fly writes about his multi-thousand percent gains on AOL/AMER, it takes me back in time to when I also dumped all my savings into it (Summer 1994). Of course, my savings at the time were about 20 grand!
Those were the days….going for 20% on a position today, seems way too aggressive/greedy now.
To be honest, I really want to short this bitch of a market.
Time will tell….what’s up with the futures down 75 points?
I hear you shorted your wife. At least that’s what SHE said!
Back In April I put one third of my networth into one stock hoping to strike it rich. Of course, the opposite of what I expected happened. The darn thing dropped like a rock(over 50%). I bought more, and it dropped further. For 3 months I was shitting bricks every day, afraid to wake up in the morning. I thought of selling it all and buying a double inverse ETF to get back to even but better sense prevailed and I just hung in there. Finally I broke even and was up by a few meager percent. I bailed out, thankful to have made it back from this deep hole I had gotten myself into.
I hope no one here is dumb enough to make the mistake I did, but I typed out my wretched story just in case.
Good luck to all, take care. Don’t let your excitement make you do stupid things.
Thanks, Devil Dog.
______
rofl
So…
Ch-Ch-Ch-China is going to have to start paying tariffs on the
Ch-Ch-Ch-Chia?
http://www.ft.com/cms/s/0/f67c6fe6-a024-11de-b9ef-00144feabdc0.html
It’s about freakin’ time……if you want your children and/or grandchildren to ever make more than $10 bucks an hour working in America, that is.
Dude, i don’t want any of my kids or grand kids ever making around 10 bucks an hour. That’s why low paid work goes overseas.
It’s all about specialization, capital intensity and comparative advantage. If cheap always won out we should see the unemployment rate at zero in paces like Malawi. It’s not.
The labor always ends up getting paid its marginal product.
Exceptional!
Indeed.
What REALLY happens when you try to restrict global trade:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ankjxH7XIn8Q
Yeah, Hankook ships tyres [sic] from Korea rather than China. OK Labor get’s its bone, can we grow up and move on please?
I can only hope this was some pre-arranged tit-for tat (sort of like Failsafe) and it stays contained.
Can you explain what the PPT is about? I don’t understand….
I am interested in joining but would like to know more about it. thanks
it is an analytic engine that ranks stocks + boss community.
That friend of yours who lost $2M, was he trading FXPT by any chance ?????
because I got suckered into that scam as well…. lost 50% of capital….
total market fuckery…..
anybody here having problems with TD Ameritrade?
gorning senor tropicana,,, where is the master trader alphadawg? when wil he be returning to IBC?
any thoughts on S getting picked of by the krauts?
Hi Fly,
Here is the latest on your friend, Lenny D. I am thinking of buying the damn ring is melting it down. I still have nightmares of that world series.
http://www.bostonherald.com/sports/baseball/other_mlb/view/20090914on_sale_soon_lenny_dykstras_1986_ny_mets_champion_ring/
FWIW, Lenny sures seems to fit right in with your image, lol.
“Dykstra filed for bankruptcy protection in July, saying he owed more than $31 million and had about $50,000 in assets.”
Fly did you ever think you’d see MAC back from the dead so fast?
I’m getting the feeling the trade issue with China is a bunch of political posturing bullshit by Obama to make himself look good in front of the union schleps and has no intention of going with it for the long term. In a week or so after spirited negotiations the US lifts the tariffs and China does too after reaching some understanding. Obama then says he couldn’t do it as it would cause a trade war but he extracted a lot of concessions from the Chicoms.
it’s bullshit.
Sure feels that way. Someone on CNBC said he couldn’t give labor card-check so he threw them this bone. Political BS. That’s all.
The Gay Meatball is talking from the floor of the NYSE…… shouldn’t that meatball be at WORK?
do you still have a position in mvis? and is it your largest?
Ring. Ring. Ring. Ring.