If you did not read Chart Addict’s post, regarding handcuffing strange men to metal pipes, I strongly suggest doing so. Great stuff.
I want to expand upon what he said, with a little “Fly twist.”
I have tried all sorts of investment methods. During my career, I have been a Warren Buffett type of investor, bond guy, small cap guy, big cap guy, niche play guy, day trader, swing trade and finally, what I am now: “don’t give a fuck ’cause I am right guy.”
Everyone out there, trying to bank some coin in the markets, will endure staggering losses. It’s part of the game. However, with experience you can skirt dumb rookie mistakes, most likely executed by most of you retards— day in and day out.
My “Godliness” came to me, in increments, after the crash of 2000. Naturally, I made obscene coin in 98-2000; but who didn’t? However, only after wiping out my personal brokerage account, within a few quick weeks in 2000, did I learn the value of “Trading with the Gods.”
See, “The Gods” don’t give a shit about bull markets or bear. It’s important to understand your risk threshold and NEVER approach it. All of my big mistakes came when I was pressured to cover a short or sell out a long, due to margin issues. During the years of 2001-2003, I pigeon holed myself, trading only on a cash basis, fucking around with big dividend stocks and distressed debt. An experience of solitude, to say the least. But it gave me time to see things in slow motion, instead of the knee jerk action of idiot high beta stocks.
If you think stocks are stupid, you should see the bullshit that takes place in junk bonds. But that’s a whole new topic.
Before I execute a trade, my mind is already set on where that stock should be, within 1 day, 1 week, 1 month or even 6 months time. And, I always have a general thesis to trade around. For example, in 2006 I loved oil/gas. In 2007 I was a big restaurant/beverage fan. In 2008 I was all about shorting the shit out of China and banks. And in 2009 I am all about shorting commercial Re and oil.
The market runs in cycles and it is important to identify what cycle we are in, prior to setting a thesis.
After that, you need to understand that even though you feel a stock like BAC should go to zero within 6 months, it can triple in two, before going lower. NEVER put yourself in a situation that will force you out of a position, because “the pain is too great.” Whatever plan you have in your little head will likely be tested, via egregious losses. Be prepared for losses.
Fuck all of the greed. Greed is good, but it bankrupts more people than a drunken CDO manager at a Bear Sterns annual BBQ.
I view investing like driving on a road. I know where my destination is, short VNO, BXP, ESS, KIM etc. However, on the way, I might drive off road for a quick snack (scalp trades) or take a nap (cash). Nonetheless, at the end of the day, I know where I am going; and I know that I will be right.
Hence, “Trading with the Gods.”
UPDATE: Santelli still on fire.
[youtube:http://www.youtube.com/watch?v=PlcJOukNsAM&feature=subscription 450 300]
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