One Common Theme: Frustration
I got a text today from a trader friend who is short the market saying: "This market is NEVER going down!" About 10 minutes later, I got a text from a different friend who is long the market saying: "I HATE this market!" It got me thinking about a few things. Many traders and professional money managers have recently voiced their opinions about the current market and when you read between the lines, you can [...]
Trading For Yourself vs. Trading For Others
About 5 years ago, I had the pleasure of sitting down with one of the top 10 traders in the country. Any time I have the chance to learn from success, I jump on the opportunity. (Out of respect for his request, this portfolio manager asked to remain anonymous because he is a very private person). From 2000-2009, his hedge fund had an average return of +14% per year. That performance is phenomenal, especially considering [...]
A Quick Note About Trading
There are so many different strategies and ways to trade the market. The key is to know when the time is right for your strategy. When it's right, get aggressive. When it's not, scale back. The biggest challenge for many traders is to ACCEPT the times when the market environment is not favorable for your strategy. More importantly, having the discipline to scale back is critical because forcing trades can become very costly. For example, [...]
Two Market Scenarios From Here
I discussed the following in a Market Video over the weekend. Here is a summary of the important points: 1) In my 18 years of trading, there have been 4 years where the market grinded higher for almost the entire year: 1999, 2003, 2009 and 2013. It's important to look at what happened the FOLLOWING year not only to understand market history, but also to try to ANTICIPATE what could happen this year. In all [...]
Caution Warranted
Last weekend, I wrote a post about the lack of "New Ideas" in this market. On Tuesday night, I posted a video saying I was "short-term cautious." I know it hasn't paid to say ANYTHING bearish over the past 18 months because EVERY DIP has been bought, but this pullback feels different. I'm noticing that every rally is being sold into and there are STILL VERY FEW safe entries in quality stocks. In addition, today [...]
A Few Thoughts About The Recent Price Action
1) On Monday afternoon, I heard the financial media say there was too much risk in holding stocks overnight. If you listened to them, then you probably got scared and sold some of your stocks. 2) If you watched or listened to the price action, you would have seen that volume was light and many leading stocks were barely down or even green on Monday. 3) To summarize my first two points, if you have [...]