Tuesday, August 31, 2010

I Woke the Neighbours Today...

... but not because of my trading, but that may change in the near future. Skip my JNSB and read on for a potentially beautiful new trade in the making.

Unfortunately, I had a bit of an incident (I love how the British call everything an incident) involving an overactive water heater located under the kitchen sink, which resulted in a major flood of epic proportions.

In any case, everything in my kitchen and living room got drenched. But I learned something about trading from this.

My portfolio has been flooded, but I still love(?) trading. Do I want to stand around and do nothing... or do I start cleaning up? I've missed some major profits by just standing by and doing nothing. I let the market ride me and I didn't like what it was doing. So, I'm going to invest some more moola later on in the year after I'm done with my PDO. Just about two more months to go! Go, go ForexDiva!

I just found an OMG type investment in the financial sector, but since I don't have any excess capital, I'm going to share with all my fellow HSFTs here. It's... (drum roll)... Charles Schwab (SCHW). Whoa, what a balance sheet!

$28.78 billion in cash and only $1.31 billion in debt. However, P/S and P/B are both high. So the question is given the new market circumstances, is this a buy yet? If people are waiting for better levels before they jump, the treasure trunk could be at $8. This would take P/S down to around 2 and P/B to 1.62 if I did my calculations correctly. If I have moola then, I might do some experimenting with SCHW.

And if I don't get in before it starts skyrocketing, then I'll blame it on people who arbitraged me. And if I get sold after getting in the trade, then I'll blame the stop-runners. LOL.

Excuses, excuses!

But seriously, now that I have had some time to do some deep inner reflection about my recent market failures, I now realise that I shouldn't mind at all about prices hitting a certain level of resistance. If prices reach a certain threshold and then retrace, then that also means our risk is relatively contained, doesn't it? Look back on the days when I bought a few market tops with BAC and C into the $50's. That was a lot more painful than a retracement from $19.86 to $12.18 or from $5.11 to $3.11. So, if the market stays this way, then it only means we have to redouble our trading efforts and readjust our strategy.

Oh, yes! We're going to be strategic from now on. We're absolutely going to be the Strategic Sovereign (that's still in debt but soon to be financially free as a bee)!

But today... still:

-0.59% on the SBA
+0.59% on the Roth IRA

Harry, I'm dying for you to fill my wallet...

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