Wednesday, July 22, 2009

A Short Story

You might be asking why is he getting back into a position after he just got whacked.... yet again. Couple of reasons.

The first reason, is that I have experienced all too often the pain that comes from identifying a position and yet not participating in said position. Case in point Back in January of this year, I was playing around with a long position called Uranium Energy ticker UEC. I never posted the position on my blog because it was a junior and a super speculative position that was not as liquid as one might like.

That said I got involved in UEC at the $0.45 area and was stopped out of the posittion. Undaunted I was back in at the $0.55 are only to be stopped out yet again. For a multitude of reasons which include but are not limited to losing track of, getting busy with other ideas, blah, blah, blah, you know the story forgot about UEC.

For those interested UEC is trading today at $2.84 and having hit a high a few weeks ago at $3.40. I do not need to tell you that the pain of getting stopped out twice for small losses absolutely pales in comparison to the pain of missing that type of winner !!

It reminds me, yet again, of a story recounted by a trader who was stalking a position which triggered a buy. This cat manages over a billion so he matters. Anyway his 'system' triggered a buy and he was stopped out. The item then triggered another buy which the trader followed again only to be stopped out. This scenario of buy trigger and stop for small loss occurred 5 times. The position yet again (entry #6 mind you) triggered a buy and as fate might have it, the position went up, as I recall, something like 5 fold.

The point here, and I am making an educated guess, is that 95% of all professional traders, let alone part time and weekenders, would NOT have come back to that same trade 3 times let alone 6. But this fella did. Maybe that's why he is a pro's pro.

You think it might have behoved this trader/blogger to come back to UEC for a third or fourth helping. I should think so.
You tell me whats more important, mental captial or physical capital? Lesson is hopefully learned and class is dismissed.

Speaking of bloggers, I happened to catch and exchange between Michelle Caruso Cabrera and Charlie Gasparino regarding Goldman Sachs. In the discussion Gasparino went after bloggers, yet again, in particular ZeroHedge with disparaging comments which included the phrase "moronic bloggers".

It could be me but I swear I heard Michelle Caruso Cabrera of CNBC in that exchange with Gasparino remark that the phrase "moronic bloggers" was redundant. What can one say about CNBC that cannot be ascertained and verified in 5 minutes of viewing.

Like Mike Morgan has oft said about pom pom TV, errr excuse me CNBC.... it has become nothing but chairs filled with boobs and boobs.



Good speculating and remind them to please don't ever forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit US Gold ticker UXG @ $3.05 stop @ $2.28
Long 1 unit Ultrashort S&P500 ticker SDS @ $50.85 stop @ SPY $96.31
Short 2 units Wells Fargo ticker WFC @ $25.10 stop @ $26.26/27.41
Short 1 unit Apple ticker AAPL @ $158.15 stop @ $162.11

2 comments:

Daniel said...

It's a freight train of stupidity at the moment. At some point(when Goldman is net short probably) it's going to turn the other way and be insanely fierce. Keep hanging in there.

CRE is cracking, revenue is down 30% in these "earnings" reports, and the FSB is going to grow a pair? http://market-ticker.denninger.net/archives/1255-FASB-Grows-A-Pair-Watch-Those-Stocks!.html

Logic has exited stage right.

Harleydog said...

Dan,

yes it does seem that way. it will matter when it does, point of recognition, as elliot wavers are want to say.

I would hate to be left without a chair when the music stops as I fear an air pocket beneath this market.

I will say that I expect short entries will be diffucult and not be for the faint of heart as they will be gaps, a la Garmin and Crox just to mention a few.

sanity will return. thx for the note and for reading.

HD