Thursday, December 31, 2009
I would like to end the year with some words about poverty. Growing up, I watched my family get into financial circumstances that got worse and worse. Technically, we were way above the poverty line, but emotionally, it always felt we were way, way below it. Looking back, we had so much to be happy about, but we were rarely ever.
It made me want to succeed more and more. And it made me realise we can all get into a state of mind and be enmeshed in it for a while even though we might have sort of outgrown it.
Money, or the lack of it, shapes the way we are whether we like to admit it or not. So, if we grew up with less, we'll continue to think we're less unless we allow ourselves to break free of that philosophy. If we have more, does it mean we're more? We should never think that way, but we should be doing more.
A few months back, I decided I could never allow myself to become part of the Ladies Who Lunch crowd. It is becoming clearer to me what I could be doing.
First, I really think if we do our part in cutting the poverty that exists in the US, we could drastically improve the economy as a whole over the long term. It was shocking to me when I looked at the statistics from Catholic Charities USA and saw that 37 million people in the US live below the poverty line. Imagine what could happen to the US economy if a lot more of the 89% of American households who contribute to charities start contributing towards charities that are dedicated to cutting poverty. Imagine what could happen if even just 5 million people who are now living in poverty step out of that definition and finally get to live with some level of dignity.
In 2010, I am going to divert all of my charitable contributions to US charities. How much should we be giving? It turns out a lot more than most people think. The average is 3.2% of income.
Secondly, I really think we need to restructure our entire energy system. I found a book by T. Boone Pickens whilst I was in NY called The First Billion Is The Hardest. Which self-respecting diva could resist a title like that? I've yet to read it, but when I looked at the Pickens Plan, it totally resonated with me.
Once I become financially free and have built up enough assets to remain financially free for the rest of my life, I hope that I will not have become so self-centred that I will have forgotten all of this. I suppose I still need a bit of time to decide the role I could play in all of this, but I've decided I am going to play a role and that's already one step forward.
Ah, a New Year waiting to happen!
In 2009, I had some hits and misses. I suppose more misses than hits, but amongst my biggest misses were:
1. not trading my Shut Up & Trade strategy
2. choosing NYX instead of TIF
3. Citi Frog
4. CPB... thought it could test $41, but has become more like the Little Engine That Couldn't
5. OMG, ABK! Bonds and shares... double band-aid.
Some of my 2009 One-Hit Wonders:
1. AMD... that was a good one. Luck and averaging in at the right time apparently played a key role in this. I thought it would test $10 by EOY 2009 and it did, but it's not due to any remarkable brilliance on my part, I've got to admit.
2. HWD, the High Beta Alpha Male gem that gives my portfolio meaning.
Stuff from 2009 That Could Make My Portfolio Six Figures+ Waiting To Happen In 2010... or 2011?
1. Citi Frog
4. JBQ Strategy (Good Six Figure Face Value Awaiting Recovery)
5. And will hopefully make some more progress with my forex trading.
And looking forward to 2010, my New Year's Trading Resolutions:
1. My ulterior motive: profits, profits, profits (I could go on and on, but then I'd bore people even more...)
2. ATAA (All Talk All Action)
3. Chase profits, but not prices.
4. Learn to think for myself, but at the same time listen to the right people. Ultimately, though, if we have to blame someone, blame only yourself.
5. Turn many three or four figure positions into five figures + consistently and the majority of the time. This is the only way to make real money in the markets.
6. Play the right role at the right time... Miss Equities 2010, HRH JBQ, ForexDiva, DiamondDiva, some lucky guy's Agent Provocateur Dream Come True. In other words, be in the right market at the right time.
7. Discover some more frogs that are just about to turn into princes. Undervalued and overlooked is what we're looking for.
8. Some more smokin' hot trading strategies, please!
Wednesday, December 30, 2009
I know I said I wouldn't blog any more in 2009, but it shouldn't be a surprise that I like to contradict myself... Whilst I was in NY, I did some more exchanges. I sold my US Steel corporate bonds and AMD shares and exchanged that for some additional shares in Citi Frog.
I got out of ED at a minor 9% profit (15% profit if we include dividends) and exchanged those for some additional BAC.
I'm really into BAC and C at the moment. I hope these two positions will eventually turn out to be a six figure profit waiting to happen. I'm not sure if I should be so excited about this, but after a discussion with my Dad, during which he encouraged me to think thousands of shares with these two, I'm feeling quite bullish on both C and BAC.
I'm not thousands of shares into C and BAC yet, but getting closer. I rather like this portfolio rebalancing action.
Wednesday, December 16, 2009
As I look back on 2009 and look forward to 2010, I wonder if I've done enough for my portfolio this year.
Certainly, I've blogged more often than I've traded, but sometimes we require this sort of downtime to define our strategy moving forward and to subtly but definitively establish our foundation for the future. I'm now much clearer on what I want to achieve with my portfolio and my life in general and have started implementing ways to get there. I've realised that on a very small account, it is not just good for one's trading ego to achieve triple digit gains, but triple digit gains are an imperative and a minimum requirement to becoming seven figures plus by using the principles of compound interest.
Sometimes, we get into a trade and it isn't until we're actually in the trade that we know - wow, I really should have taken the other direction on this one. Well, it's not too late to Stop & Reverse then. It's kind of like trying on a dress. You think the little black dress would make you look slimmer, but it turns out the little red dress actually enhances your assets a bit more.
My most important trading discoveries of the year:
1. Using a stop to exit on profitable trades is most often preferable to a fixed limit when you're riding a trend. Keep moving your stops. Finetune your stop moving as much as you can because this is where you gain a competitive edge.
2. If you have a trading ego, use it to your advantage via Stop & Reverse. I'm still figuring this part out, but I think I'm definitely onto something here.
3. Prince Turned Frog can become Frog Turned Prince in an instant. More often than not, it's not what you traded, it's the way you traded it. If you get your positioning right, your Prince Turned Frog can turn out to be the Alpha Male Prince of your dreams once again. Ooohhh...
4. Low Beta High Dividend for the Roth IRA.
5. Whatever you trade, be consistent and be persistent.
6. Look for really high risk to reward ratio trades using relatively good probability setups for the extra va va vroom ba da bing ba da boom.
To maintain any semblance of a social life - or actually, just any semblance of a life - these may be my two cents for the year.
Will I continue blogging in 2010? Will I contradict myself with some extracurricular 2009 blogs? Those are the million dollar cliffhanger questions.
Merry Christmas, my fellow Happy Shiny Forex Traders! And a very profitable 2010 to all!
Tuesday, December 15, 2009
Unfortunately, I'm having a bad portfolio day and it's -1.44% so far.
But here's Rusty again with some more trading insight...
At least AMD is doing relatively well, but Harry Winston is in one of his moods. Even moodier is C at -5.14%!
Everyone has been talking about a USD recovery, so I wonder how that will impact the equities market. Hopefully, equities will keep going up. I'm going to try to focus and look at some charts today, but don't be surprised if I'm ATNA.
Thursday, December 10, 2009
And the poor Guys of London - getting hit by 50% taxes on their bonuses. That is pure evil! We should be demanding higher taxes for any government official that fails to deliver on their promises. They are totally going on the Fair Weather Friends List - not that they weren't already, but all the more reason.
I am hoping and praying that this will be another success story for me. I'm expecting this position to be five figures at some point, which makes me think... should I be adding more to this whilst I still have a chance?
But PDO still takes precedence. I've gone overboard again with my shopping and since I'm going to be on holiday again soon and travelling, there's no telling what could happen to my bank accounts. Hopefully, the balance will be going up if I take advantage of the next few remaining weeks of trading.
If my CPB position starts profiting soon, I'll divert that capital elsewhere. Perhaps to HWD or to my top secret company of choice.
For now, I'm continuing to nurse HWD, CPB, NYX, C, and AMD. There are much less bandaids on broken ankles now, but we've got to get rid of the crutches too!
I've been lamenting my BAC semi-profit-taking for a while. And since I finally had a ForexDiva mini success story with my Neiman Marcus bonds, I decided to rebalance my portfolio again.
This is the way junk bond trading should always be. However, it's never happened to me before and now that it has, I can't wait for it to happen again.
At the onset, I was expecting a profit of four figures from my Neiman Marcus bond trade by 2015. That is a long time to wait for a small profit now that I think about it. However, it made sense from a risk:reward point of view then. At the time I made the trade, this bond was trading at about $0.4352 on the dollar. It has since risen to $0.96 on the dollar. Due to the lack of liquidity in the corporate bond market, though, I got filled at about $0.93 on the dollar. Still quite good, if I must say so myself. This gets me so excited!
Anyway, I had estimated that approximately half of my profits would be attributed to coupon interest and the other half would be from the principal by the time 2015 rolled around.
It has now already reached about half my profit objective. Whilst I could wait around for 2015, I thought adding to BAC at this time could potentially yield greater profits more quickly than waiting for Neiman.
I really hope I made the right choice! In any case, it was a fun trade.
I made four figures on this trade. Am I grinning from ear to ear or what?
Monday, December 7, 2009
When I first started trading, I used to take really minor profits. I didn't know anything about money management strategies, but through a lot of trades with very minor profits, I was able to achieve a ROI of about 12% in my first year of trading. I had very little capital back then - even less than I have now. I remember only being able to own three or four stocks at a time then. So that first year of trading was actually pretty good for me.
Back then, I was trading the following stocks:
AMZN... bought at around $32
BHP... bought at around $45
TIF... bought at around $32
AMD... bought at around $21
ET (now known as ETFC)... bought at around $23
ABER (now known as HWD)... bought at around $33
In hindsight, I made some drastic mistakes by not realising that AMZN, BHP, and TIF could have been worth so much more. I didn't realise the importance of learning how to ride a trend. AMZN could have been a $10,000 profit for me - at least.
If I took profit on all my winning positions today, I'd have a ROI of 13.7%. However, I'm sticking to my plan, looking to the long term, and learning how to ride a trend this time.
I realise that by withdrawing from my portfolio in favour of PDO, I might be engaging in some serious self-sabotage. I could be staring at very stellar stock market gains six months from now and be lamenting that I should have kept more of BAC.
Finally, I think I've gotten to the point in my trading where I'm saying I deserve more from this position.
In my diva opinion, the best thing that could happen to your money management is owning a lot of shares at the lowest price. Duh! But implementing it flawlessly?
That requires a lot of skill!
Online shopping is nothing short of miraculous and it helps to have colleagues who travel.
I finally have my Hermes Attrape tes Reves scarf that I've been dying to buy since I first saw it. Unfortunately, as fate would have it, I looked in at least three Hermes boutiques and was never able to get my hands on one. Finally, I noticed that it was available in Japan. My colleague happened to be in Japan and I ended up purchasing the last one in Tokyo!
It's absolutely beautiful!
I'm so happy, I'll share a stock I'd been researching, which I won't be able to buy for some time. It's BX (Blackstone Group). I don't own any yet, but since it's got a dividend yield of 8.79% and a book value of 11.073, I wouldn't mind owning it, especially if I'm able to place it in my Roth IRA. It has a negative EPS though, but I think the dividend yield makes it very attractive.
Do your own homework and good luck!
I think it was a good move overall. Hopefully, he'll get rid of their $1800 engagement rings. Everyone I've spoken to thinks that was a bit desperate.
Add another two zeros please - perhaps also to my trading accounts.
Q3 results for HWD are coming in on 9 December 2009.
Estimates: -0.16 -0.285 -0.41 (High Mean Low)
Over the short term, though, I have a bad feeling about their results - not only based on today's semi-sell-off, but because the average estimate seems so optimistic. I do think we may see some upwards momentum tomorrow, but then a sell-off again if results do indeed come in lower than expected. I hope I'm wrong and they end up posting an actual profit. That would be something, wouldn't it?
Over the longer term, I do believe that Mr. De Narp is a good addition to Harry Winston, particularly because he was recruited from Cartier. If anyone would understand luxury, it would be someone from Cartier. Harry Winston is not Tiffany and it cannot try to be Tiffany. Hopefully, Mr. De Narp would understand that and bring Harry Winston back to its glorious diva days.
Sunday, December 6, 2009
It's like everyone knows a bit about human psychology and how it works and we're not afraid to practice it in everyday life. I feel a lot of it has to do with manipulation - in particular, people trying to outsmart one another through manipulation. So, a lot like trading! I've never mastered manipulation, but I do recognise when I'm being manipulated - part of the reason I didn't really like living in New York. Everyone was playing one another like air piano - or at least trying to.
I've been psycho-analysing myself: my past, my present, and how this could have an impact on my future if I'm not cognizant of the steps I take today - of the mistakes I make, more than anything. This is what happens when one is desperate and doesn't have a life - you end up with a lot of time to think about yourself and your narcissistic tendencies, which apparently is actually self-sabotage in action. I kid you not!
It's evident from my blog that aside from junk bonds, I'm really into self-sabotage. Over the summer, I bought a book called Stop Self-Sabotage by Pat Pearson and I didn't end up picking it up until about three days back. Already, I've learned that I've been doing enough self-sabotage for perhaps an army. So this is what all the one step forward, three steps back in my trading is all about.
I think my problems in trading are more deeply rooted in self-sabotage than anything. I'm quite convinced that anyone else trading similar setups as myself would have no issues profiting. However, I'm looking at my results, my constant couch-jumping, my ATNA (all talk no action), and the light bulb is finally on!
I've got to conquer this issue before I'll ever conquer my trading results. And though I've noticed my self-sabotage before, this time, I really want to change myself, especially since 2010 is just around the corner.
If anyone is in a similar situation, I suggest doing a bit of self-analysis and ascertaining whether it is self-sabotage in action. It most likely is.
1. Throwing It Away... throwing profits away because we feel we don't really deserve it. I've totally done this before. Recall the USD/JPY long I used to blow up my forex trading account with? The loss I took on that trade was exactly my bonus for the year before. It could also take the form of someone who has a retirement account, builds it up to a certain amount, and then ends up plateauing or worse, withdrawing from it.
2. Settling For Less... I don't really believe in my abilities, so I'll settle for less. You've managed to catch a trend, but somehow you end up messing it up by getting out of the trade. BAC, anyone?
3. Resignation... why bother? I know I don't deserve it anyway, so I won't even go after it. This sort of self-sabotage could take the form of someone testing out all different strategies for a few months at a time and then switching to other strategies. The strategy switching basically never stops. Ah hem...
4. Fatal Flaw... Being a perfectionist, narcissist, procrastinator, or angry. There's something in your personality that eventually causes you to turn a winning trade into a losing trade. For instance, you put in a limit order for 1.05111 and prices end up retracing at 1.0505... do you get out now or do you wait for it to hit your limit even though technically, price action is clearly showing there's no further upwards momentum? If this keeps happening, it could be self-sabotage.
5. Denial... If I'm patient enough, this loss will turn around. I guess everyone's been there, done that on this one.
Once I get to reading about the solutions, I'll share here.
Thursday, December 3, 2009
AMD is +10.27% so far and I feel like I'll be laughing all the way to the bank. Just a little bit more and I'm breakeven on this position - something I never thought would happen in my lifetime. I've been holding onto this position since February 2007. I now have to think about how to trail my stop.
My question is why isn't C moving at all?
I'm still indecisive with regard to my ABK position... I was thinking of cashing out on my ABK shares and then getting into some more Finlay bonds, but S & P upgraded Ambac Assurance. I was so ticked off - a day after I sold my ABK bonds, mind you. Good thing I didn't get out of both shares and bonds at once. Whatever! They've been saying that they can't pay dividends on that bond issue due to regulatory reasons, so I'm into Finlay bonds now.
But I've finally got a position where I'm +213.64% and that is a small position in Tribune Co. bonds (CUSIP 896047AF4).
Is this bliss? Not quite, but at least I'm bitter no more.
I exchanged BAC for PDO and now woe is me...
I think I'm going to contradict myself with my ABK shares and exchange them for some more BAC - if the price is right. Considering BAC's book value is at least $22, any price below that should be right.
However, note that BAC is planning to raise funds to repay its TARP obligations through the sale of stock. Hopefully, this will create some new opportunities, but how will this affect its book value?
Who knows if I'm doing the right thing by selling ABK, but it's better than bitterly complaining about it day in and day out. I'm going to take action after work, which would give me a few hours to decide what to do about ABK vs. BAC.
But why is ABK trading +25.93% pre-market? Something must be up!
Wednesday, December 2, 2009
My portfolio's +0.55% today. I have a feeling this might be a light trading week for me...
But there's life after exchanging my ABK bonds for Finlay ones. I actually feel better after taking the plunge. What I did was I cashed out on my ABK bonds completely and used the proceeds (three figures!) to buy Finlay ones with a face value of approximately the same as what I'd been holding with ABK. I think the Finlay bonds stand a good chance of a recovery of about $0.68 on the dollar for unsecured creditors. Don't quote me though. My portfolio's at least 40% off. My Finlay bond holdings are now worth a total of a good five figure sum.
I'm watching AMD, CPB, and HWD this week. I really hope that I'll be able to breakeven with CPB this year. Compared to the broader market, it's got quite a low P/E. Its EPS is higher than some of its industry peers, such as ADM, SLE, and even KFT and HSY. I'm targeting a P/E ratio of 20 or above with CPB, which means I'd have to watch it at about $41.
I've kind of been considering the idea of going for an MBA, but don't know if it'll actually be worth it. Last time I checked, the tuition for a two-year programme would be in the range of six figures. If I do go, I'd like to hit two birds with one stone and get the ForexDiva in London dream out of the way by attending London Business School. But six figures? That's quite an investment. The Stern School of Business is a bit less, but then I can't hit two birds with one stone.
In any case, I've got to learn French! When I called Hermes yesterday, they made me say Attrape tes Rêves and Offrandes d'un Jour. It was very embarrassing.
Before I get my first Hermes Birkin, I'd like to be able to say Chanson pour hier et demain. Un million d'années?
Tuesday, December 1, 2009
Harry Winston, I thought you had higher standards than that!
Their marketing has gone downhill since 2006. It really has.
Harry Winston would never say: "A good diamond, however small, is a possession to be prized for generations." But their catalogue quotes him as having said that, which I find to be absolute fiction considering that Harry Winston was probably the first diva ever. This is clearly a move to make Harry Winston more 'accessible luxury.'
They are totally missing the point. Everyone knows Harry Winston diamonds are supposed to be gigantic and prohibitively expensive!
Please, TIF, acquire them!!
Today is a new day. Tomorrow's a new day... we're all going to make it some day... ode to gold & oil...
Just when it appeared I'd become senile, a new idea hit me. Maybe it's not new for you, but it was new for me.
Anyway, I've been staring at the Frog Formerly Known As Prince ABK the whole summer. Why didn't I just take a loss and actually put that capital to better use?
But I think it's now ruined. I've turned a four figure sum into three figures. I wouldn't be able to do much trading with it.
My idea was to cash out on all my ABK-related holdings - both in bonds and shares - and then use that capital to invest in my top secret company of choice. If I just stay in this PTF trade, it's almost a guaranteed bridge to nowhere. If I divert that cash elsewhere and actually invest in something I really believe in, I stand a much better chance of at least recovering part of my losses back - or even better.
Is there now even a remote chance that ABK will turn back into a prince? I highly doubt it, but looking at January 2010 options chains, it seems the $2.50 level is still significant.
What do I do? I'm going to sell my ABK bonds and get into Finlay ones. I'm going to wait until January 2010 to see what happens with ABK shares, hoping it'll test $2.50. With Finlay, I'm almost convinced there's a good probability of seeing a swift recovery - whatever it may be.
I have to admit it's very rare that any of my positions have actually gotten this bad. I think my worst position ever was the one that I used to blow up my forex trading account - a USD/JPY long that I still regret and will never forget. Other than that, I've been relatively conservative. Never again is what I say!
Monday, November 30, 2009
This other one, I'm going to keep for myself - top secret.
I'll give you a hint: it was mentioned on FT.com recently.
Do your own homework: I got these book values off of Yahoooooo Finance.
If only I wasn't so into PDO now, I'd buy it right away. But 'tis still the season to be shopping.
I'm going to go OTT overboard with my online shopping later today. It seems like my portfolio's not the only thing that's some 40% off.
Today, I'm also eyeing USD/CHF. I'm also going to look at gold and oil, which has been one of my better habits lately. Gold and oil, let me count the ways...
Sunday, November 29, 2009
Last week, I did nothing more strenuous than filing my proof of claim for the Finlay bankruptcy since I was a bitter, emotional basketcase, if I must say so myself. But this week, I am going to seriously put the past behind me and focus on maximising my trading for the remainder of the year. I promised myself I would improve my trading and although this trading year has been a bit disappointing, we've still got four more weeks to go - and they could be productive ones.
When the Dubai story broke, I was fairly oblivious, then started thinking this Dubai story could be the biggest thing since Chicken Little announced the sky was falling. My portfolio was down a painful -2.24% on Friday. Who knows? My take on Dubai could possibly turn into an actual Chicken Little incident since the UAE Central Bank offered an additional line of credit for all foreign and international banks operating in the UAE. I could be the woman who cried Foxy Loxy.
If the Dubai incident fails to shake the market very substantially, I think we have good reason to be bullish once again. It signals that the sky is not falling - at least not until the next Chicken Little incident comes along.
Friday, November 27, 2009
Oh, dear God! I open FT.com and for the 50,000th time this week, I see something about Dubai. Dubai this... Dubai that... Everyone hearts Dubai - or unhearts it, rather. Just when I was about to scream "enough already!"... it dawned on me... CIT's bankruptcy received less than a day's worth of media coverage.
The fact that the coverage on Dubai has been going on since at least Thanksgiving Eve indicates intense investor interest - and potentially lots of money involved and capital BIG bandaid ripping potential.
I should be looking for potential gold-digging - ahem, trading - opportunities. But what?
And I am probably on the brink of being on the fashionably late side.
Better late than never?
Oh, it's never too late to play the fashionably late card when it comes to trading.
Thursday, November 26, 2009
Wednesday, November 25, 2009
So there is something about alpha males - at least according to FT...
Note that the author is male, which means I'm trying to toss you an excuse that this article is not in any way sexist, which I think it is even if it was written by a guy. It's a bit like those research reports that try to justify that men inherently have a natural inclination to cheat, isn't it? It's like me with my remarks about alpha males. I do secretly like guys that are just a little on the alpha side, but not too much. Alpha alone, like the article suggests, is not enough.
Anyway, I digress.
Today, I am looking for opportunities to fade a move. I'm going to pay attention to gold and oil again, especially after the Fed has suddenly become concerned with "excessive risk-taking."
That water is ice cold, Bernanke! Here's a guy who can use a bit more alpha!
Tuesday, November 24, 2009
Not only is that not a valid excuse, but what kind of euphemism is that?
In case anyone was wondering, I have both ABK shares and an Ambac bond issue, with the majority of my position invested in the bond issue.
Whilst I'm definitely not going to be singing Shiny Happy People any time soon, I do feel a lot better after my weekly massage, even though my portfolio's -0.69% today.
It seems low beta is where the money's been headed today. Basically a lot of low beta stocks on my MarketCaster have seen price increases ranging from 0.04% up to 2.96%, most of them outperforming the minor market decline. I hope there'll still be some low beta + high dividend stocks for me to add to in the New Year. If market conditions change then, I'll have to go with a different strategy at that point. But what?
CPB has been moving quite a lot lately, so hopefully I'll be able to recover my losses on it and close out the position this year in favour of PDO.
On the prince turned frog front, ABK was -4.44% and one of its bond issues (CUSIP 023139AF5) is trading at $0.07 on the dollar on my E*Trade bond trading platform. This is definitely a bond issue I won't be adding to even if ABK does ROTB. I have a feeling something is going on with ABK. It has survived the global financial crisis almost unscathed even though everyone has been saying it's only a matter of time. The fact that it hasn't succumbed to the pressure says a lot about its resiliency. Most of all, it indicates that the market needs ABK as a counterparty. Or at least it needed it up until this point. Was ABK's going-concern statement a secret ultimatum? But what could really be going on with ABK?
OK, Shiny Happy Forex Traders... Happy Thanksgiving in advance.
May no one be hit with any retracements...
Monday, November 23, 2009
Even if there were, my portfolio was +1.22% today and I found another few potentially interesting stocks I can look into when I'm finally done with all this stressful PDO stuff.
High dividend + low beta = less stress
Today, I haven't found any charts that millionaire dreams are made of, although I didn't look very hard, but I did realise that the next step in my learning process must be to identify when all the stop-running is done.
Since we don't celebrate Thanksgiving here in Belgium, I'm going to look for trades on Thursday and Friday. And maybe figure out what to do with ABK. During the summer, when I was fretting about it only being a matter of time before ABK files for bankruptcy, there was a small window of opportunity when I could have sold it for only a minor loss. Looking back, it would have been the right thing to do. However, since it moved up so dramatically, I thought I'd be able to recover my full investment before getting rid of my ABK shares once and for all. Nope. It turned out to be another lapse in judgment. I wouldn't mind now if ABK just decided to give everyone a Thanksgiving present and ROTB (ripped off the bandaid). That would even be like an early Christmas gift and a very early New Year's kiss from a prince turned frog. Either way, it's not good.
Four figures out the window... down the drain... water under the bridge...
Run out of metaphors...
Sunday, November 22, 2009
Jim Rogers' First Million
ForexDiva's First Million? Hopefully sooner than a million years...
As a semi-Republican, I do not endorse this in any way. In fact, I'm quite appalled.
Who in their right mind would pray for someone else's demise?
They need to get themselves in a confessional booth!
Just when I thought life couldn't possibly get more bitter or soap opera style show-stopping dramatic, I received a dysfunctional request from my dysfunctional family. I'd say at this point that dysfunctional is an understatement. I am still incredibly frustrated, angry, and most of all, heartbroken that they could even consider asking. It's like they think that their financial future is more important than mine.
One of my family members asked me to call him. I am even embarrassed to say who. He never calls me on my birthday. Last time I received a salary increase and he found out that I wouldn't be contributing any additional money to his living expenses, he didn't even congratulate me on my salary increase. So, when he asked me to call, I knew it wasn't going to be good. He actually had the audacity to ask me to be a co-signer on a six figure mortgage. Note: co-signer, not co-owner. Of course, I had to flat out refuse. What did he think I was - born yesterday?
Any of the handful of fellow couch-jumpers who read my blog even once in a while know that I've been in PDO mode for the past few weeks especially. From October 2008 to October 2009, I've paid off 60% of my outstanding debt. I'm left now with a very manageable five figure debt balance that is costing me a three figure sum per day now through to the end of my PDO deadline. The storm is practically over. It is stressful to say the least, yet at the same time liberating.
I am thisclose - thisclose - to being financially free for the rest of my life. And now, he comes along and thinks it's a very small favour to ask. The worst part is he actually told me that he probably wouldn't be able to pay off the mortgage himself, which is none-too-subtly telling me that there'll be a high probability of me being in financial prison for the rest of my life if I co-sign the loan.
I am glad I found the strength to finally tell them enough is enough.
Does it make it hurt any less?
And if anyone dares to insinuate that I didn't do enough and that I care more about getting an Hermes handbag than my family's well-being, I swear I will send them a few expletives of their very own. I think a high five figure sum over the past 12 years has been more than enough. I would already be worth six figures if I had been any more selfish.
Sometimes, we've got to stand our ground even if it means standing alone.
Friday, November 20, 2009
My portfolio was down -0.77% today, but since I was in a better mood, it didn't affect me that much. Yesterday, I was feeling bitter and +1.68% wasn't even good enough.
Anyway, more thoughts on our prince turned frog, ABK!
I've been researching possible reasons to declare a technical default, but so far have a lack of evidence.
If this was based on morals alone, I'd have tons of moral evidence against ABK, including a clearly two-faced approach to doing business:
Ambac Misses Interest Payment On $400 Million Bond Issue (circa 15 August 2009)... this was only a $12.3 million payment on the entire bond issue.
Ambac Financial Posts $2.2 billion Profit
Ambac Issues Going Concern Statement One Week Following $2.2 billion Profit
Ambac Misstates Financials To Meet Minimums
Ambac Financial Misses Regulatory Filing
Not having studied law is a bit of an impediment, but I am quite sure I will no longer invest in subordinated bonds after seeing this article about Bradford & Bingley, a company in the UK that deferred interest payments and got away with no technical default.
I'm not even sure if ABK was one of those financial institutions that received TARP money, but ABK keep mentioning that their financial regulators are prohibiting them from paying dividends to the holding company. So is it better to hold bonds in the holding company or the subsidiary? I'm still figuring this out.
Whilst I'm at it, I would go so far to say that the whole bailout was premeditated. Apparently, Congress is 'teeming with millionaires.' Fair weather friends, indeed!
Wednesday, November 18, 2009
Right now, I suppose I'm content with an occasional day where my portfolio advances by +1.68%. Now, this is uncanny. Why does my portfolio always seem to be moving in percentages involving an 8? This is a lucky number according to most Chinese. But it's real. My portfolio does end up moving in those percentages, which is what makes it uncanny.
Anyway, it turned out AMD was the second runner-up turned frog turned prince today. It was +10.57% based on news that it is aiming to retire $1 billion in Senior Notes. Good on you, AMD! Perhaps ABK can take a hint... AMD has been reporting loss after loss, quarter after quarter and even a company like this can have the honour to repay its debt. ABK, on the other hand, reports a $2.2 billion profit one week and issues a going-concern statement the next. Maybe it should change its trading symbol to WTF, which would certainly be more apt. I wouldn't be surprised if AMD closes the year with a try for $10. Would I be able to stick with AMD for the long term considering I'm really into PDO at the moment?
I've been doing some more research and found an interesting strategy that hedge funds use to trade junk bonds.
I'm not sure how applicable this strategy is with ABK bonds, but I seem to recall ABK issuing the going-concern statement prior to indicating its failure to file statutory financial statements. So is that a preemptive strike, ABK? At the least have the decency to offer us a tender for these prince turned frog junk bonds of yours!
Tuesday, November 17, 2009
Today, I'm looking for more correlation possibilities. I'm going to monitor gold and oil throughout the week for some more inspiration. Ode to Gold and Oil...
GBP/USD looks interesting at the moment, but only for technical reasons.
I haven't talked about Harry Winston for some time and it's been a bit of no news is good news. My HWD position is firmly profitable at the moment. Honestly, I'm waiting for HWD to become an acquisition target. Along with TIF and BULIF, HWD remains one of the few remaining publicly traded independent luxury jewellers. It's a surprise that Richemont, PPR, LVMH, or The Swatch Group haven't found it even slightly intriguing for all these years.
In my world, a TIF and HWD merger would be ideal. TIF has really good marketing and they would be able to do a lot with an icon like HWD.
I really hate myself for missing out on TIF. That's definitely going down as one of my worst trading moments this year. I chose NYX over TIF! C'est moi!
Monday, November 16, 2009
The only thing that looks convincing to me is that gold and oil seem likely to break to the downside - at least for a bit.
Oil looks a bit weaker. Gold might still heat up a bit before a meltdown occurs.
I'm not going to trade either one, but am going to look for currency pairs that line up with my theory. If there's no alignment, I'll look at the slowest pair on earth - USD/CHF.
Ever since my BAC Air Piano Incident, I've been convinced that any corrections in the equities markets will be short-lived, especially for quality stocks.
This article about recruitment in the advertising industry reinforces my view. As I had mentioned earlier, marketing and advertising expenditures are the first to be streamlined (extreme euphemism) during recessions. According to AdAge, more than 11% of the workforce in the advertising industry was 'streamlined' since the Great Recession. The light at the end of the tunnel is finally emerging!
It might not be a jobless recovery afterall. If this continues, we'll all be jumping on couches for years to come!
I'm planning on rebalancing my portfolio as soon as the opportunity presents itself. Since I've been so high beta, I might have to start looking at good dividend opportunities for my Roth IRA. I was quite surprised to find some opportunities with almost 6% dividend yields.
Incredible, and yet pretty exciting...
My portfolio was only +0.81% today by the way, but I'm still in a couch-jumping mood!
The $1.9 billion seems to be from the sale to JPM.
Remember that legally, there's a difference between Washington Mutual Inc. and Washington Mutual Bank bonds, so be careful about what you buy.
If anything, I should be getting an A for attitude. I've been trading forex for more than two years now and haven't given up just yet - always getting very close, but then realising if I just put in some extra effort, maybe it'll be different. Admittedly, I didn't know what I was doing for the first year and a half, but I started slowly understanding market movements about the time that Lehman happened.
When I look back on some recent posts, I realised that I had some pretty good ideas. This does not help with the bitterness factor. At the height of my bitter rampage, I actually purchased my second (third?) Katy Perry single on iTunes. Talk about a bitter woman? Now that woman's bitter. Her songs are, at least.
Anyway, behind my own bitterness, there has been progress. It's been slow, but I want to take a look at my bitter trading habits and hopefully, this time, really, really learn from them.
I've got a pretty good setup going on here. I love my beautiful charts! They show me when the stop-runners are likely to strike. And now, I can even surmise when large players are in the house. Seriously - and I know how old that one is!
I've got a contrarian, trading ego thing going on too. Fear is my biggest psychological impediment. It's almost like I believe trading is an uber alpha male thing (which it is) and I am but a little diva who used to think praying works in trading. It's scary to be trading against so many alpha males with huge brains (and probably egos). I've only got the ego so far, but if I can get past the fear and the trading ego, I'm sure it'll be one of those One Small Step for ForexDiva, One Giant Step for Divakind situations.
Stop & Reverse... it's a double-edged sword. However, I truly feel it is useful in many cases. I just need to ascertain when.
All trade setups are not created equal! I think I'm having a bit of an issue discerning why and need to be all practice what you preach and review my post below on how to move trading probability in one's favour.
Trading the news has killed me twice this year. But everyone knows Fraidy Cats have many lives.
The market runs on a rhythm of its own. Impatience is my forte, but it's not a virtue. I might stop trading some of the slower pairs altogether unless the risk:reward is really too good to resist.
Anyway, it's a new week. I'm going to try to turn bitter into better.
Here's to my fellow couch-jumpers!
Friday, November 13, 2009
a. been a top-notch fraidy cat
b. used Stop & Reverse without any level of forethought
c. required beauty sleep
d. all of the above
It didn't quite reach my target yet, but the profit probably would have been better than most of my other trades. I woke up yesterday and the first interesting thought that popped in my head was I have to stop being such a fraidy cat. Easier said, I say.
If I have the audacity to send ABK a collection notice for a very small sum, I must have the audacity to stop doubting my trade setups.
But I did learn from this trade and I'm saving my energy for another round next week. Market correlations are major and I need to invest more time learning about these!
Hopefully, next week will be much less bitter and far more optimistic. There's enough bitterness already, isn't there?
Thursday, November 12, 2009
Today was another one of my Stop & Reverse Days.
At least my BAC credit line incident had a bit of a happy ending. My credit line on one of the accounts has been restored.
In another bitter rage, I sent ABK a collection notice for the bond issue that I own. What? If they can exercise their First Amendment rights, I can exercise my bondholder rights under the Trust Indenture Act of 1939.
What was my Stop & Reverse all about?
I shorted USD/CHF based on a very terrible DJIA performance. All risk assets across the board seemed to be underperformers today, and so the light bulb went on and I thought safe haven again.
So is the safe haven to be USD or is it to be CHF? That was the question. I noticed the price action that I like seeing on charts, but kept doubting myself.
I'm now short again and targeting the 1.0113 area.
Oh, pretty please! Never mind. Praying rarely works in trading. In fact, I'd be better off trading more carefully. No one wants to end up being a trading slut!
I should definitely try being much more selective about positions from now on.
Wednesday, November 11, 2009
I don't know what it is. A day off from work often translates to financial despair for me. If it's not a trading loss, it's an expensive purchase.
Today, it was a heated exchange with Bank of America (BAC). After checking my credit report, I noticed they had recently closed one of my newer credit cards for 'inactivity.' It cost me three points on my credit score and after so diligently paying off my debt with others, I was thoroughly ticked off.
I had heard that banks are squeezing consumers prior to new legislature, but I never thought that I, with my stellar, stellar, stellar (not a typo) credit score would be affected.
If there's one thing I do well, it's a credit score! A credit score that has earned me an aggregate credit card credit limit capable of buying a house. A credit score that has shaped my identity and trading ego for the past... decade.
Anyway, they not only closed out that credit card, but also reduced my credit limit on a credit card that dates back to good old Party Like It's 1999. At that point, I was all four letter words.
Who does that??
This won't kill me because honestly, I don't even need that credit line. I don't need their entire credit line, but what'd I do to them? I've paid all my bills on time, my salary has increased since my last conversation with them, and my debt level has never been lower. Just because I haven't been an active shopaholic with them does not mean I am not a shopaholic at all.
The worst bit is that we as consumers have to beg them for a slight credit line increase and all they have to do is tell us that the credit conditions have changed and that is sufficient for them to give us the credit card equivalent of a slap on the face. And we have to turn the other cheek?
And they even had the audacity to ask:
1. What did your credit card purchases comprise of for your balance with Citi?
2. What is the value of your stock portfolio?
Is it me, or was that totally out of line?
I had just enough sense not to mention my Tiffany addiction.
Tuesday, November 10, 2009
In my experience, it will usually take several months before anything concrete occurs, but my hope is that the bandaid ripping will occur much sooner. This could be a special case with all the financial regulators involved. Nonetheless, it's financial hypocrisy at its best. How can ABK announce a $2.2 billion profit one week and then cry wolf the next?
Looking back on previous companies that have filed for bankruptcy...
1. Metaldyne did a tender offer before it finally succumbed to bandaid ripping.
2. Finlay tried buying time with a debt exchange offer with its vendors several months prior to ROTB (ripping off the bandaid).
Is ABK rolling over and playing dead?
I had a feeling it was only a matter of time, but I'd like to know what's happening to that $2.2 billion profit? Bonus time!
I'm more surprised about why the +10% unemployment rate didn't spook the markets at all. My Dad tends to think that it's because everyone's been expecting +10% unemployment for a while, so it's already been priced in. People are probably taking it as good news that it isn't worse. He's experienced two market crashes - the DotCom Boom and the recent Global Financial Crisis, so hopefully he's right and I can continue buying small lots here and there. Apparently, he also believes it's OK to have a few losers in one's portfolio as long as the winners offset the losers.
But this article thinks that the pivotal point may be 20 November, when options are due to expire.
My highlight of the day was adding to C. I wish I had enough cash to add to BAC too, but perhaps I'll add to BAC in the new year. Sooner or later, some more profit-taking will have to occur and that'll be my moment to (hopefully) shine. I'm only praying that my JBQ tiara isn't too big for my head. I've already got a trading ego the size of Belgium. A tiara that won't fit will really give me anger management issues.
Too bad my Buy 1 Get 1 Free on EUR/USD turned out to be a false alarm. Since it still needs some time to setup, I'll have to review it again tomorrow. Tonight, I hope I won't have any more BAC dreams. I wouldn't mind dreaming about Harry Winston though.
Monday, November 9, 2009
I had a nightmare last night about BAC going to 16 and missing out on all the extra profits. But I'm looking for an opportunity to add more to BAC and C over the next few months.
Debt obliteration or profits? Debt obliteration or profits? Difficult to decide, but I've been focused on profits the past few years and this mindset has slowed my debt obliteration tremendously. The market will still be here after my debt obliteration. So, I'm going to have to stick to Le Grand Plan and continue the slow and arduous process.
I'm excited about a few forex charts, including a Buy 1 Get 1 Free pattern I see on EUR/USD as well as a very precarious looking USD/CHF.
Let the volatility begin!
Thursday, November 5, 2009
Shorted @ 1.65539
Target = 1.6453
Why do I do this to myself?
Maybe that guy who read me like a book was right. Maybe I do secretly like difficulties. Who else could spend hours upon hours just making +3%? If I continue to miss any beauty sleep, I'm going to look 50 by the time I turn 31.
If I'm not feeling any less bitter tomorrow, I'm going to have to force myself to take a few days off. And my favourite day of the week is Friday, my lunchtime date with the Guys of London and the Men of New York.
I'm focusing on three setups from now on:
1. Little Black Dress (bearish divergence)
2. Little Red Dress (bullish divergence)
3. Buy 1 Get 1 Free (second pattern break following a failed pattern break)
Wednesday, November 4, 2009
Enter technically, exit emotionally? Common denominator of all my trades...
Happy Anniversary, Obama, my fellow all-talk-no-action semi-whatever... We've both got that je ne sais blah...
Right now, I'm looking for some low beta plays. There must be an easier way to gain more than 3%. I'd like to reiterate how anyone can do +3% - especially this year. If I sound bitter, that's because I am! LOL.
I'll now look for opportunities to fade some moves. I think I see something on GBP/USD...
Tuesday, November 3, 2009
What's going on with my trading ego? My portfolio's +1.29% today and I'm still not happy. I'm going to be the perpetual diva - impossible to please. I had to let go of a partial position in BAC yesterday, only to watch it gather strength today.
This whole drama, i.e. my portfolio declining very dramatically in a very short timespan in an eerily similar fashion as last October, made me put my trading ego aside for a brief moment to re-evaluate what exactly is going on.
1. 34.5% of my portfolio is now tied up in junk bond holdings. Not very much room for growth then. This equity is stuck for at least another year. It doesn't help that I've built up my JBQ holdings to such an extent that the Income Estimator on my E*Trade trading platform now expects me to post a 5 figure gain in interest income over the next year. Wow, if that were really true! Instead, all these bonds are trading flat and I'll have to patiently wait for years. If I'm looking for growth, I'd need to add more to my portfolio to counter-balance the lack of mobility of these junk bond holdings. So, I have to accept this as a matter of fact.
2. Secondly, my portfolio is heavily weighted in high beta stocks. BAC, HWD, C, AMD, NYX, are all pretty high beta. I was going through days when my portfolio was moving up much faster than the market. How could I have expected this to continue? The move down would be just as fast, if not faster. With my recent sale of KO, my portfolio is even more heavily weighted in high beta.
However, due to my recent sale of KO and partial sale of BAC, about half of what I'd invested from the escalation of the global financial crisis is now out of the market.
My hopes are now pinned on:
1. PDO. I just don't want to be tied down financially any more.
2. HWD & NYX.
3. Continuing to look for good forex trading opportunities. I can't give up now. I just feel like I'm getting very close to success too. I know I've been saying that all year, but how much worse can one's trading get? There's only room for improvement now.
4. Possibly adding to BAC again. However, PDO is my top priority now.
Tomorrow is a new day - and an exciting one, no doubt! And Q4 is not over yet!!
Monday, November 2, 2009
I was really regretting not selling earlier. Earlier in October. Earlier in the day. Any time earlier would have been better. But as I mentioned earlier, I am trying to prevent any further damage to my portfolio. I still have another two partial lots on BAC and once I successfully complete my PDO (premeditated debt obliteration) process, I'll be in a better position to look for other trades.
But admittedly, I am a fraidy cat. BAC had broken out of a rectangle consolidation and the 200 Day Moving Average was right above my original entry price on that lot. According to my stop-running knowledge, there's a good chance that BAC might hit $12 again. I wasn't in a frame of mind to risk that, but I probably should have been faster and smarter too.
Anyway, getting back to regret. I was looking at this trade from the following point of view.
I have two choices:
1. Sell BAC now and get some peace of mind
2. Wait until it retraces and puts me at a loss. Should I put my trading ego aside again? What if it takes out the $12.80 level? Then, it’s too late to cry.
I'll continue to nurse HWD and I'll wait for C to go further south.
Harry Winston, further north please!
I'm worried. I hope I’ll be able to make some other more profitable trades very soon because otherwise, I’ll only close out the year with a +3% gain. It beats inflation, but anyone can do +3%! Especially in a year where you could basically buy anything and make money.
My biggest regret of all: being too greedy.
Still, my partial position in BAC is in a very precarious position.
Good thing I've got a day off from work today, so I can be around to nurse my positions in case anything majorly bandaid worthy happens.
After all, CIT's bankruptcy potentially has a $64.9 billion impact on the market.
My feelings are really, really hurt. Friday’s session was no picnic for me and I experienced a classic dose of the It’s Not What You Traded, It’s the Way You Traded It. My portfolio was down -4.84%. After adding to my Finlay bond holdings, I was down 6.3%. It was déjà vu all over again. Last October? Not a time I want to relive. Talk about Halloween…
My portfolio now would put all divakind to shame. I allowed BAC, NYX, and HWD to fall back into negative territory. These were my full-time super heroes! The strange thing about this sell-off is that I see no movement into some of the safe haven type stocks, such as utilities. It was a true broad-based sell-off. No one was spared. A sense of foreboding?
I spent a good part of the weekend worrying about what to do. Rather than condemning myself excessively, though, this time, I was quick to switch gears. I’ve been through a sell-off before. I can survive another storm.
I had already started reducing my market exposure a few weeks ago by selling my KO position. I wanted to use the proceeds towards my premeditated debt obliteration objective and have successfully accomplished this.
What do I want to do with the rest of my portfolio now?
I’m going to prioritise my positions and figure out which positions I want to nurse and which positions I want to get rid of if absolutely necessary. Capital preservation is my main aim now.
BAC and HWD are still partially profitable. If I sell part of my positions now, I stand a good chance of taking a partial profit and still being able to buy back at a lower price later on.
However, the question is, just how much of a panic will investors be in? CIT has just recently filed for Chapter 11. Would there be other potentially worse news to come? Do I care? I’m not going to let last October happen again!
On the forex trading front, I got into a long GBP/USD position during my Lunchtime Fun with the Guys of London session. I was up about 11 pips on the position, but the position started quickly retracing. When it was down about 8 pips, I stopped and reversed. It would have been a good directional move, but since I had to get back to work, I had to close out the position entirely for a net 2 pip gain. The whole point of my Stop & Reverse was to reverse my loss. However, I think I might be onto something from a money management standpoint. I’d have to keep experimenting with this strategy to gauge if there’s some real long term benefit to doing the Stop & Reverse.
It did make me realise that the velocity of a move has a lot to do with probability. Something to explore!
Thursday, October 29, 2009
I stopped myself out of this trade with a Stop & Reverse, which I promptly closed out with an additional small loss. Total loss on this trade was -24.72.
The thing I'm most ticked off about is that USD/CHF finally did start to break down after I got out of the trade. I know this sometimes happens, but how does one distinguish between a trading ego and trading conviction? It's a very fine line isn't it. I think my mistake with this trade was being emotional and inconsistent. I always wait for the break to happen before getting into the trade, but this time, I jumped in head first too soon and hit the bottom of the pool.
For those that secretly smirk about my mini-lots, there's nothing wrong with having a small account and big dreams. Still, I am looking to develop a scalable strategy and since I'm still experimenting with my trading, I'd rather continue with mini-lots than have any unwelcome surprises.
I'd been condemning myself since last night, but then finally realised that we are not only as smart as our stops, but also as dumb as our stops. So, my previous Bimbo Trading the Wrong Side of the Road Trade was only a -1.97 pip bimbo trade whereas this USD/CHF trade turned out to actually be more bimbo from a money management perspective even though the trade philosophy was actually sound. Whatever your reason or bias for being in a trade, sometimes, I think trading conviction actually ends up hurting us more than we realise.
After a stream of expletives, I'm finally a bit calmer. The positive US GDP report and my portfolio being +3.57% so far do help.
I've got to at least do better than minimum wage on my next trades. Otherwise, this would all be a colossal waste of time, wouldn't it?
Guys of London, help me out here!