Bread & Butter

I'm actually a much worse tourist than I am a trader. Surprising, I know, but one could probably figure that out since I'd been to Paris more than once and never actually saw the Eiffel Tower. Likewise with Taipei 101. That one should be more shocking as it's a mall.

Anyway, I forgot to bring my camera to the Coldplay concert. That's like forgetting to bring your brain to a trading session. Do I even have one?

Before I get accused of digressing too much, I have some ideas about trading I want to brainstorm on.

I've been thinking that people require a sort of Bread & Butter type trade. Every successful business has a Bread & Butter type product or service. Every successful trader therefore requires a Bread & Butter type strategy. Lately, Little Black Dress and Little Red Dress have both been MIA. Good Harry Winston had been carrying my portfolio all week last week, but today I feel like he's loved me and left me... -2.94% so far!

I don't know why I've been so lost lately. The two sparks I've had lately related to trading are:

1. have multiple contingency plans by diversifying according to asset class, market sectors, and perhaps more importantly, volatility. For stocks, this would include beta diversification. I would argue this is even more critical than sector diversification.
2. move your money from one asset class into the next.

Perhaps it isn't much of a spark, but I was definitely happy to see this report that Bank of America and Merrill Lynch see the level of junk bond defaults reaching 40% by 2013.

Am I actually on the right track here? Maybe?! Time will tell.

I hope I'm on the right track with the positioning of my junk bond holdings though as that will attribute to my success rate with these bonds.

One woman's junk is another woman's Harry Winston, I guess...