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!