Thursday, September 24, 2009

Sheep or not?

Overall the meetup was a good expereience. I suggest it to anyone new to IBD methods. Leader was knowledgeable, kept good focus. It seemed that a few people knew what they were talking about when they spoke but some of these did not talk much. One guy hijacked a lot, but he was older and had a chart printout with elliott waves drawn on the spy chart. I wanted to here of some great experience hitting home runs but did not. Most everyone there was a young sheep, not sure if they will get shorn... If you are new to active trading beware of losing funds. Very few people were fully invested in the market, I think that the heavy hitters were short after the close last night, many of them acted like the close was as ugly as it gets, I see the numbers as not that bad. I view pullback as buyable, not a collapse. I'll wait for charts and trendlines to say when. A few of my ETFs went red.

What a collective mass of buyers and sellers the IBD crowd must make.

Wednesday, September 23, 2009

Health care reform

Health care is not a right. Using the word right is just horrible use of the word. The way it is used suggests people are owed this right, but their use more so suggests entitlement to others efforts and resources. We have the right to free speech but not the right to control someone else's free speech or to cause injury with ours. We have the right to bear arms but not the right to shoot others. We have the right to make our vote be known, but not the right to control the vote of another. To say that healthcare is a right is not in a similar vein as the above rights. Stop thinking of this as a right.

On the other hand, if one were to insist on calling healthcare a right, please examine what these rights demand. For all of these, wars have been fought with many lives lost. Education has been required for proper use of the pen, weapon, and to select with the lever. These are responsibilities. If you want to own a handgun, you must get a permit. If you want to hunt you must take a safety class. If you want to vote you must meet criteria. If you want to get your free speech out to the public you must get a job, carry a sign, or be a better blogger. What responsibilities will be required for the right to healthcare?

Having a "right" to healthcare is one thing. But does the providing party have a responsibility to provide? Can we legislate the bankruptcy of our system? Are we going to eliminate the profit motive, the capitalistic self preservation that drives our innovation? Will the brightest and the best leave this industry in search of greener pastures?

If the public, with perhaps imperfect knowledge, wants the system to change then perhaps we should change the system. But lets call a duck a duck and stop calling it a right, call it what we want. But be cautious of that which can't be known until we get there.

Let's meetup

IBD works with a group called meetup for investors to get together and learn/share, sometimes they even send speakers to the meetings. Years ago I tried to start my own in town here, never got a hit from anyone real. Tonight I am going to my first meeting albeit in a larger town many miles away. I am searching for inspiration and a fun night out. I expect I have something to share though not that inspiring. I have been a sheep amongst wolves, expect I will see quite a few sheep.

ETF (IYR DGS EWT INP THD XSD EWM RSX)positions are all +0 to 4% in the short time I've had them. This brings 2 accounts up maybe 5%, two others down a bunch still. Other retirement accounts in mutual fund style investing are up 29, 33, and now 49%! I expect the ETFs to treat me well in coming months. Not as exciting but more profitable.

What is happening right now: major market indexes continue hitting new highs with good breadth, this is bullish!

Sunday, September 20, 2009

Book Review

First off, I do not regret selling out of all stocks this week even though one is quite a bit higher now. They still need five and six million dollar volume up days to impress me as that is what they did on recent distribution days.

I've just finished Tom Lydon's "The ETF Trend Following Playbook". Save the money if you understand moving averages to guide trading and can find a full list of ETFs that are tradeable. Read the book if you want to learn more about ETFs and what is available. It is a playbook in that it teaches what can be traded, general long term guidelines to follow to do so well. It lacks a coach in that it does not offer specific how to guide. I might be biased by experience in that much if not all that was written was familiar to me. My vote: save the money, wait for library. I have not looked at his website to comment on that, more of value might be there.

Tuesday, September 15, 2009

Real Estate, videos by mail

When I adjusted my portfolio I got out of the energy sector as it has lagged others. I do so at a time when I see suggestions to start getting overweight in energy. At some point I think energy will be a buy but I did not see it for now. It had underperformed everything else I was invested in. I bought more real estate in 401Ks and enjoyed watching IYR move more yesterday.

I have just a few stocks right now. The video by mail company had been looking good. I bought near the bottom of a pattern/channel/trendline when it was down, it then moved lower. Just a few days ago I got an email suggesting its better days have passed by. I have been printing charts of stocks I think could be big winners, maybe one a month. Well this stock had shown greatly increasing percent ownership by funds, and a larger number of funds owning it each month, including a chart I looked at just a few days ago. Well after the close last night I saw that these numbers are now SIGNIFICANTLY LESS, making it look like funds are getting out of this. So I have lost a lot of confidence in the stock. The close of yesterday makes it look like it will go up a bit this am, I think I will look to sell.

I am hurting in an oversubscribed issue novavax, sold half yesterday. The company story is great for the long term, I might sit with the rest for a bit. CNO has done well but I am changing how I do this.

I am more and more comfortable with the idea of ETF investing. Yes AIG, C, CNO are going to do well long term. But the pain of seeing account values go down is really incredible prior to some of the moves. In a way, I see that I will have a future with greater control over my finances when I quit work and have control over 401Ks. I need to trade bigger trends in less volatile issues. A mutual fund could work out well except one has to take end of day pricing. ETFs allow trades at the market at the time of the order while performing similar to a fund. I have lost a lot of benefit of compounding by overtrading. If I'd have traded more big picture moves like my 401Ks I would surely be a year closer to quitting work.

Sunday, September 13, 2009

Buy and hold

Perhaps I am not the best trader and need more of a buy and hold approach. I like coupling this with moving average analysis similar to many classic texts and here.

Thursday, September 10, 2009

Market sentiment, recent buys, 401k analysis

I do not have great news programs to listen to but I follow a few things on the net and read a fair amount. People are scared, do not trust the new bull. I find this to be true for amateurs and pros alike. Welcome to the wall of worry.

I bought into pullbacks of some new high (and high relative strength) generally foreign ETFs and one stock with defined risk exit points. If they pullback I expect they will not make lower lows.

On the 401K review, real estate is the bomb! Something like 15% growth in two months! Large cumbersome US based funds severely lag all other stock funds so I will likely close out that which is invested with Ferdinand and move into the others that are doing better by several percentage points. Beyond that, the relative performance of international issues seems to be better but not as much so of late. Value, small cap, mid cap have all had decent moves. I discovered IBD lets me graph these funds vs an index all on the same page and adjust the viewable date so I can see what has done better for given time frames. A great feature for just a few hundred bucks a year. The charts at the Ferdinand sight are more awkward to use.

Wednesday, September 9, 2009


This morning I find myself filled with fear as I look at charts. I see lots of good set ups, the market failed to tank last week, and I expect mad money can be made. But I feel like my teeth have been kicked in too many times. I also will be doing just fine with average returns for now. So I will look to stay long with what I have, go long with 50-100% of available cash in a handful of ETFs, evaluate retirement accounts and perhaps adjust them. I will not sell out of many positions due to short term panics, rather see our current market as slow grower worthy of owning (the big boys ain't selling). I expect ETFs to grow modestly better than the SP500 without the expensive haircuts.

I take this fear as a good dose of rational market maturity all too hardly earned.

Tuesday, September 1, 2009

Systematic set up

Today I am reviewing some recent books and evaluating statistical analysis of trading in an effort to systematize my trading better. I will likely look at setting up rules to track and trade sector ETFs and individual stocks.