Sunday, March 30, 2008

The Secret of my Success

I am my own contrarian indicator.

Whatever conclusion I draw, I invariably do the opposite. I do it consciously with the conviction that anything I would think is so correlated with the herd that it has to be disastrously wrongheaded.

So I'm loaded up with stocks and mutual funds. Because I decided that staying in cash is what everybody is doing, so I'll do the opposite. So if that's what I do, how right could it be?

The real secret of my success is patience and time. I stick with my mistakes until they pay off.

Saturday, March 29, 2008

Don't Mess with Mr. In-Between

I'm terrified of becoming Rev Shark's poster child for losers. Every day - and I mean, every day - he says anybody who buys stock right now is a sorry sap whose money will go bye-bye in a hurry.

I read him every day and I believe what he says. The problem is, I'm also reading these other smart guys, like Dick Arms in Barron's today, saying that this is the exquisite moment, the inflectional cusp, on the crest of which all my dreams will come true. If I'm in.

I'm in.

Somehow, I have managed to commit half of my available funds to stocks and mutual funds, and they are now going down.

I was early getting out, last year, and now I'm early getting back in. Years ago, when I used to hang out at the Merrill Lynch office, I heard an old trader say that, when a stock doubled, he didn't care about getting the first 25 percent or the last 25 percent. He was happy to get the 50 percent in between.

I took that for wisdom. In my case, right now, I'm getting the 2 percent in between.

Friday, March 28, 2008

The Big Ledownsky

GOOG today: TGIF

I took the advice of a commenter and didn't sell all my GOOG this time. Now, whatever happens, I'll have something to feel bad about.

Since I sold, GOOG seemed to get tired of going down. At this rate, I can't see 350, or even 400. I know what's going to happen. I'll talk myself into buying it all back, down ten, just in time for the big down hundo.

Thursday, March 27, 2008

Kudzu Blues

I'm worn out from managing my money.

I never used to think about it. I put money in mutual funds and checked it once a month. Now, I'm a lot smarter than I used to be, I get tons of information about the state of everything, I make decisions left and right, and I'm a little better off than I used to be. But I'm worn out.

Last night, the kudzu had my pasture again. In dreams, I saw Cramer, speculating about GOOG's multiple, saying, "20, 25...", over and over. I'm not stupid. Even in my dreams, I can multiply. I got up, went to work and sold 2/3 of my GOOG. I didn't want to go into the next earnings report with all those shares.

I got 445.29 and made $3,900 on the deal. But I blew out the dream again.

I don't know what's going on with Google's clicks. I read all this stuff and I decided that I didn't care about Google's clicks. I don't want to have to keep thinking about it all the time.

I don't even want to think about how to get out of this piece. I'm tired. I said, tard.

Wednesday, March 26, 2008

Google Hell

Yesterday, GOOG went down ten. This morning, it went up ten and then, at midday, went down ten, and then closed, up seven. Which is almost ten.

Now, after hours, it's down 15 and I'm wondering, what happened? The news was all about Google, kicking butt again in the click share business. That wouldn't make it go down. It had to be something like Congress makes Google illegal. The news didn't have anything like that.

So I made the mistake of going to the Google Message Board to see what was going on. Now, I'm really shook. I gotta stop going there.

Monday, March 24, 2008

In my room, quiet, with spreadsheets

I'm still here.

I've been spending a little more time than usual in my little room upstairs. Figuring on my spreadsheets. A quiet time for me. My wife understands.

I enter data, make formulas, draw conclusions on the wall. A hundred different ways of asking the same question: how'm I doing?

So far, in 2008, I have a net profit from all my stock sales of $17,140.56. That wouldn't make Josh Hayes happy, but it's not bad, considering that the year, so far, has been a bitch.

Thursday, March 20, 2008

Diary of a Madman

I bought my first GOOG on November 5, 2004, at the lowest prices I have ever paid for GOOG.

In the morning, I bought 25 shares for 181.98. In the afternoon, I bought another 25 shares for 172.03. On January 12, 2005, growing bolder by leaps and bounds, I bought 50 more shares to bring my total to an even 100. The next day, I bought another 100. Exactly one week after that, I sold all 200 shares, booking a profit of $227.40.

Wednesday, March 19, 2008

Epiphany or Doubt's End

Every now and then, I venture an opinion about the market, as though I know something.

When I went to cash in September, last year, I was thinking that a crash was coming and it would be nasty, brutish and long. I had been through two of these things before, so I had an idea of what it might be like.

I don't remember much of the pain from the seventies, even though I was there. I rode out the millenium crash, every bump down. Still, I wasn't making any decisions back then, so my gut didn't learn anything.

I figured, this time, I would stay in cash for a year or more, while the market fell off a series of increasingly big cliffs. Finally, when it was exhausted, there would be plenty of time to go around picking up Apple for 7 and Google for 85.

So far, for all the sturm und drang, we've fallen off one puny little cliff. Somehow, it doesn't seem enough. In the back of my mind, Dundee is grinning and saying, "That's not a crash!"

But I allowed myself to be swayed by the learned opinions that I heard on the Stock Channel. Unpleasantness in the first half, they said, and gangbusters from there on. The crash would somehow fit itself into those parameters. I took on a trading mentality. Every day, I decided which way to lean.

I went nowhere, fast. I'm flat on the year, but that's a consequence of going to cash last September. Nothing I've been doing lately has affected my bottom line, one way or the other.

This week, I took a step back. I decided that I didn't have to buy low and then sell high, the next day. I kicked back. I chilled. I read Rev Shark's TSC postings over and over again.

I'm beginning to understand, now, how long it's going to take. I'm beginning to believe.

Tuesday, March 18, 2008

Faithful Companion

Today had a strange feel for me. I sat out the rally. Normally, I would have been buying on Monday. Selling today. But that little play was getting too hard. I became averse.

Kass is downright giddy, these days, but I'm a believer in Rev Shark, now. It ain't over until the Klaxon sounds.

But I'm not totally bereft. My C Fund caught the thermal, like a Rocky Mountain High. And I have now re-established most of my full position in GOOG, reducing my cost basis by 11.5%. The rest of my money just sits there like a good dog.

Sunday, March 16, 2008

The great white bird into heaven

I don't care what his religion is, or what his politics are, Cat Stevens has the spirit in him. He always has.

Anyone who could sing, out of his original mind,

"They will vanish away like your daddy's best jeans,
Denim blue fading up to the sky..."

has the spirit in him. Like Dylan. In the sixties, everybody had the spirit. The music was tremendous. It's all gone, now.

Once, for about a year, all my thoughts took a poetic form. Iambic pentameter in my sleep. I wrote everything down in a journal. I'm afraid to look at it, now. Either it's gone, or I am.

Why am I going into this?

It's Sunday, Jake.

Friday, March 14, 2008

Oh, the humanity

I read the news today oh boy.

Crash and burn. The great men of finance, hanging out the discount window until they can't hang anymore. It's better not to look. But we can't help looking.

Wednesday, March 12, 2008

Where's the Grief?

The TSC traders were in a grouchy mood, this morning. The Fast Money traders, except Karen, were downright indignant, this evening. Their numbers were legion. Nattering nabobs of negativism, as far as the eye could see.

They couldn't find yesterday on their charts. They wanted capitulation and they hadn't gotten any. They wanted everybody, except themselves, to be really sorry that they'd lost all their money. And they wanted to buy up everything for practically nothing. It didn't happen and they were petulant about it.

Just a short squeeze, they said. And they were probably right: if yesterday was all short covering, then the only sellers were the shorts, themselves. Out in Lukenbach, Texas, ain't nobody feelin' no pain.

I consider my position. They might be right. Might not.

Tomorrow, I might sell my SPY. Might not.

Tuesday, March 11, 2008

I Dragged a Comb Across My Head

This morning, I found my way downstairs and drank a cup, and looking up, I noticed...

... Steve Liesman, on the Stock Channel. He was in Washington, with news. The fact that they sent him all the way to Washington to pick up this news got my attention.

I figured out, right away, this must be a turning point, so I went back upstairs and committed a portion of cash to the market for the open. The usual suspects: SPY, VTI and, of course, a little GOOG.

Then, for most of the morning, I felt like an idiot - schlemiel and schlamazel, at the same time. But, by mid-afternoon, I was a mensch.

Monday, March 10, 2008

Say Hayes

Joshua Hayes is a new scribe at TSC. He is an engineer of trading.

His theme is, "Through technical analysis, you, too, can find happiness by getting rich, like me."

By all indications, including his picture at the top of his posts, he is a happy man. I enjoy reading him because his strategies unfold with mathematical precision. Nothing is left to chance.

I favor a more tortured approach. The essential ingredient of my method is madness. It works for me. I am happy for Mr. Hayes, but, on the whole, I'd rather have my face.

Sunday, March 9, 2008

Undercharged again, at the QuikTrip

Do right to me, baby
And I'll do right to you, too

The time change threw me off, this morning, and I was late getting to the QuikTrip for gas and my New York Times. Even when I'm not late, I often get the last copy, so I wouldn't have been surprised if they'd sold out.

There was one copy left. So I was happy when I came up to the counter to pay. The clerk looked at the paper and said, "Two bucks."

I reminded him that it was five bucks. He took another look and saw I was right.

He said, "A lot of people wouldn't have said anything."

I told him it was Sunday. I don't want to cheat nobody. Don't want to be cheated.

Altucher is Trouble

I never intended to buy back GOOG so soon.

But I watched a TSC video with Altucher on. In the beginning, he was hitting on Farnoosh Torabi pretty good, but she used first person plural on him and that kept him from touching her.

Then he started talking about GOOG and that got him even more excited. He said that GOOG was a short term buy. The way he said it sounded like he didn't like it for the long term, but he likes it long term, too.

Anyway, he got me excited and I bought the GOOG, even though my published objective was to buy it back much lower.

I like Altucher. He responded to my Facebook poke at him. And he's always right - two years later.

I'm still waiting on Dow 16,000 that he promised last year.

China Shop Research

Everybody wants to know when the bull is coming back. Me, too. So I checked out the local China Shop.

I didn't see any bull in there, but the bear was tearing up the joint.

Good times or bad, sell the China Shop.

Friday, March 7, 2008

They said it was a bad day

When the night comes falling
From the sky

63 thousand hedge fund managers lost their jobs, last month. Joe Kernan and the boys, and the girl, were all over it. They had guests on who were prepared to certify that the economy is now going to hell, but they didn't need guests. Kernan kept shouting while they were trying to speak. For a while, everybody was yelling at once. It was pretty scary.

I say it's a good thing Santelli is in Chicago. He wanted to fight somebody.

The market itself, when it came on, did a pretty good rendition of "Up a Lazy River, by the Old Millstream."

Yesterday, I bought some GOOG for 447. It closed around 432. I needed another falling knife. Now, I have a full set.

Thursday, March 6, 2008

"He breaches!"

For the past year, Rev Shark has been writing amazing stuff, every day, directed, not at professional traders, but at shlubs like me, repeating the same message again and again - stay the course, be patient, the time will be long in coming, wait, wait...

We need this guy. These are perilous times. He reminds me of Ahab's First Mate, Starbuck, in the long boat with his men, waiting for the whale to breach, saying "Steady... Steady... Steady..."

Wednesday, March 5, 2008

Blumen notices a bird, outdoors

I'm in cash. 100%. I don't have to read Cramer or Rev Shark, anymore. I don't have to look at the Stock Channel. I don't have to buy the Wall Street Journal when I have lunch at Panera's.

Today, I noticed a redbird in a bare tree. He looked down at me and cocked his head. I got the feeling he was in cash, too.

Sunday, March 2, 2008

Slow Boat to Hallelujah Land

I was doing so well.

Mostly in CASH and GOOG since the fall of last year, I converted the GOOG to cash this month. In my Thrift Fund, I stayed in C for a little hedge against good times.

And I did a little trading, mostly in SPY. I bought the dips and sold the rips, several times, and made money each time. Not a lot, but not bad when everything was down from day one of this year.

Then, in the past week or two, things firmed up. I started paying more attention to guys on TSC who were saying that happy days were possibly in the offing. Even Kass was buying at one point.

I let my guard down. Last week, I bought a rip with the intention of letting it ride until the good times arrived. Even though the charts were still screaming that it wasn't going to happen, I doubled up.

Friday wiped out half of my accomplishment in 2008, so far. This market clearly has further work to do in the down department. My usual suspection, at a time like this, is that it is too late to get out. But the thought of riding it out fills me with dread.

Monday morning, I aim to go completely to cash. I will collect my 2% a year and throw in as much free cash flow as I can squeeze out of my day job.

I can't imagine why anyone would be interested in hearing about this, except, possibly, my heirs. I wouldn't be going into it at all, if it weren't Sunday.