Tuesday, November 3, 2009

Trading Ego Aside... Because Tomorrow's A New Day!


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!!


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