SOME CHANGES TO ZENPENNY
You'll notice some differences to home page and about page. It's not really going to effect the website very much. More for informational purposes and to give readers a better idea of what my trading strategy is about. You'll see on the home page that I now have detailed descriptions of the strategies I use on a long-term, intermediate-term and short-term basis. The core of my strategy is the long-term method I use to invest in companies like PSTR. I have other holdings, as well. I want to keep some things exclusive to members and investors, which is why you don't see them published here. You have seen my short-term strategy at work here. Trading names like TDSC, VHC, and OVTI. I will continue to feature those trades via "The Gun" The intermediate term strategy I use has not been mentioned much. I will publish trades using this system from time to...
TOP 3 MOST POPULAR POSTS FROM THIS PAST WEEK
1. A TOP-RANKED HEDGE FUND MANAGER FACE PLANTS BEFORE A LIVE STUDIO AUDIENCE 2. COMING CLEAN: I MADE A BOO-BOO TODAY 3. THE GUN: NFLX EARNINGS...
A TOP-RANKED HEDGE FUND MANAGER FACEPLANTS BEFORE A LIVE STUDIO AUDIENCE
I've always felt a need to put my trades on display. I worked on an institutional trading desk for Bank of America in the late 90's where I would talk shop 24/7 with anybody who wanted to talk trading. Then I left Bank of America in 1998 and started a blog before it was even a word. There I shared opinions, trades, methods and lessons for a number of years. Gathered a substantial following, which led to the formation of a hedge fund. Even during my hedge fund days I kept things very transparent. I wanted my investors to know every step I would take. I disseminated information about positions, analysis and opinions on an almost daily basis. My clients seemed to appreciate it. They loved me. I grew very close to a few of them. We had a mutual respect for each other. Everyone was making money. It felt good. I had just finished an enormous up year in 2003. It was January of 2004. I was already up 40% through the first 15 days of January. I was the #1 macro hedge fund in the country. I beat Peter Thiel (original Facebook investor, Paypal founder, hedge fund manager) who was #2. I got a call from a client thanking me for all the work I've done and how excellent things had been for all the partners. He asked, "I see by your emails that all of our trades have been going well. Do you mind me asking how much we are up so far in January?" I said, "We're up 40%". He nearly fell out of his chair. I thought the phone was about explode. That was the top of my hedge fund. I would never see those levels again. The next two years were tough. Tough is an understatement. I cried. A lot. I kept things transparent throughout my two down years. I had one client in particular who would dig into me after every trade I announced. Invariably she would be right as she caught me during the worst stretch of my career. She let me know that she was right. She also let me know a lot of other things. I was away from the markets from 2006-2009. I pursued other businesses. Learned a lot about myself. Got rid of a lot of material possessions. Some by force. 2006-2009 were probably some of the most formative of my life. In 2009 I started trading again. Have been doing well in the first two years I have been back. It just wasn't as fun keeping my victories and defeats to myself. After a winning trade...
COMING CLEAN: I MADE A BOO-BOO TODAY
It has been a long time since I made a trading boo-boo. A boo-boo - for clarification - is not when you lose money on a trade like I did with NFLX on Tuesday morning. That's just trading. A trading boo-boo is when you veer off of the road map for a particular trade. Case in point: VHC The trade started out wonderfully. My read on the trading pattern was spot on and my entry was a good one. The weakness was obvious from the moment I put on the trade. I didn't have an ounce of pain on this trade. Not one moment of doubt. It went my way from the very beginning and didn't stop into the close of Tuesday's trading session. In my mind, I said that once it broke 23 I would get out in anticipation of a bounce off the trend line at the bottom of its range. This morning VHC broke through 23. I didn't cover. All of traders who inhabit VHC (there are a lot of them) decided that they would begin buying/covering shorts right on the uptrend line that marks support. I still don't know why I didn't cover. I just didn't. Call it my blond moment of 2011. Even though my head is shaved and I'm a male. Today I was a blond. As the stock began rising and I was sitting there playing with my make believe blond hair, I started accessing my EDS. If you haven't read about my theory on EDS and how it influences trader/investor behavior, the link is here. I have learned over a 17 year career that started at the age of 19 trading for myself, clients and on a trading desk at a major bank that once the door to my EDS is opened I HAVE to exit the trade. I become indecisive and must move on to the next one. Start fresh. I know I have made progress since this is the first time it has happened in 2011. If you are new to the markets, it happens weekly, if not daily. Those with a few years experience should be able to keep it down to a few times a month at the most. If you have been doing this longer than 10 years and you haven't mastered your inner-trader to the point where you keep it down to once every few months, then you need to find a method that keeps the door to EDS...
TRADE UPDATE: VHC
Took a 2.30 point profit on VHC short at 24.53-24.55. Trade taken yesterday. Details here http://www.zenpenny.com/?p=1599
THE MOST UNSUSPECTING RALLY IN THE HISTORY OF THE WORLD?
If this is the beginning of another massive leg-up for the markets it will be the most unsuspecting in the history of the world. I'm saying this because the technical base from which this rally has sprung has all the makings of massive failure written all over it. Anybody who has been studying charts for more than a week can see it. Usually I'd be in love with the concept of being bullish in the face of a rally that looks technically incomprehensible. I like being a contrarian. I think you have to have contrary expectations in order to succeed in the markets. Just like anything else, there is a time and place for it. I don't think this is one of them. As much as I want to say that all the technicians out there who are studying obvious chart and volume patterns will fail miserably. And as much as I would love to say that what is obvious is obviously wrong...all the time. This is going to be one of those cases where what is obvious is obviously right. This rally will fail and all the technicians who are seeing it for what it is will be proven correct. I will be posting an article over the next couple of days specifically outlining my reasons for bearishness in the days and weeks ahead. In the meantime, leave your cape at home...
TRADE UPDATE: VHC
I tweeted this in the first hour of trading today. Forgot to post it to the blog due to the craziness this morning. Sold short VHC at 26.85. Reasons here: http://www.zenpenny.com/?p=1591 The tweet is here...
TRADE UPDATE: NFLX
Sold NFLX at 240.50. 11 point loss roughly. It's better than coffee.
TRADE UPDATE: NFLX
Bought NFLX at 251.35. Earnings trade only. Will sell the position during the first half hour of trading tomorrow. Reasons here: http://www.zenpenny.com/?p=1577