Friday, August 31, 2007

More about August

I was quite surprised when I went over the Zweig screen for August. I base a lot of my trading on that screen and I figured it would have taken it on the chin during the month of August. On the contrary, it made 5.27%. Buying all the stocks you see in the chart on the first day of August and holding them through today would have beat me by 20% this month. That makes me question my tactics a little bit.

A couple of stocks caught me by surprise this month. I didn't have BW on my watch list this whole month and it was the best performer in the screen. I also ignored HRS and jumped out of VMI too soon.

I'm not sure if this month was an just a fluke, but I'm sure there is some further analysis that I can do to figure out what went wrong.

Adsense on StockPunk

I debated for several months whether or not to include any advertising on my site. Some stock bloggers I admire refuse to allow outside advertising (The Kirk Report) and some layer them on pretty thick.

I planned to take the high road like Charles Kirk until I read an article in last month's Fast Company magazine about a 17-year-old girl who started a web site that offered cute templates for MySpace accounts for free. She included Adsense advertisements and this year cleared ONE MILLION DOLLARS (you have to say it like the evil guy in Austin Powers). Holy Toledo!

So, I jumped on the band wagon this August and --you may want to sit down for this--I made THREE DOLLARS AND EIGHTY ONE CENTS (you can turn off your evil guy voice for that one). So tonight I'm treating myself to some Taco Bell (I probably won't be able to get a drink--just water please).

Month In Review -- August 2007

To put it bluntly, my trading in August sucked. Fortunately, the market as a whole sucked as well so I don't feel too awful about my performance. Judging from a perusal of other blogs, sites, and newsletters, August was tough for everyone.

For the most part, I stuck to my trading plan in August. I didn't lose more than 1% of my portfolio on any one trade. Unfortunately, I had several losing trades in a row so I ended up down around 10% for the month.

Like I've mentioned before, I've dramatically changed the amount of risk on each trade. Last year I often was fully invested in one or two stocks with wide stops. A struggling market made HUGE dents in my portfolio that were hard to recover from. I'm not seeing HUGE advances either, but I'll take a less volatile approach over insanity any time.

I've been taking a closer look at technical analysis since this downturn began. I've been a fundamental guy for years and frankly technical analysis never seemed to work for me. But during the past month I've seen some advantages to using TA when my stocks with strong fundamentals began sucking wind. It would have been prudent to look over some charts before I blindly jumped back in (and consequently got my clock cleaned).

I'm counting on a strong finish to the year and my goal is to recover my losses and be ahead by more than 43% by December 31st. I've got my work cut out for me, but with every passing month (and day) I learn something new.

What to do

I had myself convinced that I should stay out of the market today and let sleeping dogs lie until Tuesday. But the premarket and overnight trading in Asia have got me all worked up. Do I sit this one out and potentially miss out on some decent gains or do I take a risk and jump in for some short term action. Hmmmmm.

Thursday, August 30, 2007

More confusing action today

Early on the market tanked and then roared back and then tanked again and ended up down a bit. If you've got a handle on this action, pat yourself on the back. I'm hoping that September will make more sense, but historically it has been a volatile month. I'm too impatient to wait a whole month (I'm doing good if I wait a couple of days) so I plan to regroup this weekend and try my luck again on Tuesday (you know you're a trader when you look forward to Mondays and you're disappointed if Monday is a holiday).

Somebody likes StockPunk

Value Blog Review has set up a best of the stock blogs list where folks can vote. I thought I would be bumped off the list pretty rapidly, but some how StockPunk remains in the top 20. Thanks to those of you who have voted. It makes me feel all tingly inside.

Wednesday, August 29, 2007

A voice of reason

I've mentioned The Prudent Speculator in previous posts. Hulbert Financial Digest reports that TPS has averaged a 20% return for the last 20 years. That's the best performance that any newsletter advisory has been able to put together according to Hulbert. If your portfolio is doing better than thier's then you should probably quit whining.

Here is an article from the authors of The Prudent Speculator that kind of "qualifies" the recent market action. It's good to listen to some voices of reason during confusing times in the market.

There it goes again (part 2)

I wasn't expecting that. I finally convince myself that after a big losing day where several of my stops trigger it isn't prudent to get all worked up and jump back in. Then Bernanke makes it all better and everybody jumps back in while I'm left holding a bunch of unsettled funds. Oh well, it was just one day. But I'm getting really tired of these "one days" that make no sense.

Tuesday, August 28, 2007

There it goes again

Last week's gains are but a memory. Where do we go from here? I wish I knew. There are still folks out there saying a huge rally is building up. I hope so.

Today my portfolio was down 3.10% -- its worst showing since June. It has been very difficult for me to figure this one out, but I've learned that there are some bloggers out there who have devised some valuable indicators.

Stockbee has been cautioning his readers since the decline started and has implored traders to stay out until after Labor Day. I thought he was being a bit extreme, but now he seems quite reasonable.

Whatever happens, I hope to learn from this. I hope you do as well. Stay encouraged. People have been making money in the markets for hundreds of years. This last month doesn't mean a thing.

Monday, August 27, 2007

Not much there

The market kind of churned all day with nothing really notable. Every one of my picks was down today. My portfolio was down 1.18%.

I didn't see anything concerning today so I'll just keep following the program I guess.

Where are we headed?

There's lots of chatter out there about the direction the market is going to take this week. Stockbee says that this most recent bounce will end up heading south soon. Stox Investor says the bulls are "about to get smacked". The Kirk Report says the bears are on the run.

I don't think that anyone knows for sure. I'm planning to keep my money working this week unless things move strongly in the wrong direction.

This week I'm going to try to limit the time I spend watching the market. I usually spend 1 to 2 hours a day just watching the ticks and I've come to realize that it's a tremendous waste of time. I don't really learn anything by watching and often I make bad decisions when I get wrapped up in what's going on out there.

My best time for learning and thinking is early in the morning, the few hours after the market closes, and the weekend. I seem to make the best decisions when things are shut down and the data isn't constantly changing.


Sunday, August 26, 2007

This Week With StockPunk

There are a few changes in my screens, but after a pretty good week, I'm hesitant to mechanically dump stocks that no longer appear on my screens. I'm holding on to last week's winners and dumping the poor performers that no longer appear on the screens.

I'm hoping that things continue positively this week, but there is still a lot of uncertainty out there. Have a good week!!

StockPunk Poll

It looks like the majority of StockPunk readers use stock screens to pick their stocks. The next highest choice was doing your own research followed by stock blogs.

Personally, I find stock screening the best way to go for finding my picks. I've tried using my own research, but I've found that my emotions and flawed logic always get in the way. I make assumptions that influence my decisions based on what they company does, trends, economic influences, etc. All that stuff just gets me confused and I end up holding on to losers too long.

Stock screens keep the emotion out of my decision making. If I'm doing what I'm supposed to based on my strategy, there is no reason to be upset about stocks plunging.

Friday, August 24, 2007

Stock Superstars and The Prudent Speculator

I am obsessed with looking over performances of newsletters, blog writers, and indexes and I on Friday it makes me giddy to compare my performance with the "big boys". Two of the newsletters that I check each week are The Stock Superstars Report and The Prudent Speculator. There are very few advisory services that are bold enough to post their returns each week, and both of these services do.

You'll notice that despite the brilliance of the managers of these services (I am not being sarcastic--those guys are SMART) both of them are struggling this year. Neither one of them is outperforming the market by much.

So don't be discouraged if you're struggling as well. This market isn't making things easy for anybody.

Week In Review 8-24-2007

"We've long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children." Warren Buffett

I always insist that I have no idea where the market is headed at any given time. Great investors seem to say the same thing. Does that make me a great investor? Probably not.

Although I got beat by most of my stock screens, I still ended up having a positive week this week. The portfolio was up 5.22%. Another week like that and I'll be back to where I was a month ago.

I stayed pretty unemotional throughout the week. I barely even monitored things today. It was a pleasant surprise when I looked over things after the close. I wasn't quite sure where I would end up at the end of the week.

I have no idea where things are headed, and there are a lot of folks out there that are still very concerned, but I'm feeling better about keeping my money active.


Thursday, August 23, 2007

Back Down Again

I made a mistake with a trailing stop I set today, but otherwise I stuck to the program. I was down 1.35% today.

I was hoping the jump at the open would continue throughout the day but no such luck. Things still look pretty solid if you ask me so I'm planning on sticking with things until I get some bad feelings about where things are headed.

Wednesday, August 22, 2007

FINALLY!!

It's been a month and a half since I've made over 2% in a day. Today I was up nearly 3%. Man, that felt like more like 6 months than 2.

Things are starting to click again, and it looks like the market is getting its legs back after a good punch in the nozzle. There is still a lot of uncertainty and confusion out there, but we are starting to see a lot more stability.

Tuesday, August 21, 2007

Is it OK to come out and play?

Another OK day today. I made some money again. Things continue to feel "right" and I'm nearly fully invested right now. The market still seems a bit skitterish but I haven't noticed any gut-wrenching swings that were common the last few weeks.

Monday, August 20, 2007

I MADE MONEY TODAY!!!

For the first time since July 27th, I made some money. That's almost one whole sucky month. It wasn't much, but it felt good to finally make some decisions that weren't to my detriment.

I have a better feeling about the market. It feels more like it did before the dark times. We'll see.

This Week With StockPunk 8-20-2007

I'm planning on putting some money to work this week. My gut tells me that the worst is behind us for a while, but then again, what do I know. Every stock on my screens is a bit beat up, so hopefully over the next few weeks they'll recover a bit.

Looking back over the last four weeks, I think my lack of patience is what hurt me. I got a little too cocky about being up 43% and doing well during the first week of the downturn. The second week bumped me out of all of my stocks, but I was so hurried to get back in and catch the bounce that I got my clock cleaned on several buys.

I did the same thing in March when the market corrected a bit. I jumped in the next day after the big drop thinking that I was going to capitalize on a bounce back up. I got burned badly that time too (but apparently not bad enough that it taught me a lesson).

I think it would be good to take a longer break after my stops trigger. The market isn't going anywhere, and it will welcome me back after sitting out a few weeks.

Thanks to those of you who voted in the StockPunk Poll last week. There were no big revelations. Some of us have lost a lot and some haven't during the last few weeks. Congratulations to the 15% of you who have made money in the last month.

If anybody would like to write in and share with StockPunk readers how you made money or some of the mistakes you made (like me) please do. Just e-mail me your story and I pick some good ones to post to the blog.

Friday, August 17, 2007

Hard Lessons--Week In Review

The last few weeks have been tough for me. It has seemed like every move I make has been the wrong one. I felt pretty confident at the beginning of this week that things were changing for the better and they ended up getting awful by Thursday. Then things seemed to turn around and I felt that I could put a bit of cash to work this morning. Unbelievably, I lost more money today--1.57%. I can't seem to make money even when the market does.

For the week, I lost 5.87%.

Thursday, August 16, 2007

I Blame Star Wars

I thought this video from a local comic was kind of funny. Actually, it was kind of sad because as I watched it I mentally corrected the mistakes he made in quoting the movie. I'm such a loser.

Personal Finance Magazines

I haven't been as excited about receiving my finance magazines lately. A few of them are starting to bore me. I guess there are just so many ways that you can say "Stay out of debt and own stuff."

There's a good article (with reviews) about the personal finance magazines that I subscribe to at Get Rich Slowly. Take a gander.

Where are you Kirk? We need you!!

Even members of Charles Kirk's Kirk Report have been getting dribbles of information during his vacation. He's off hiking with his wife somewhere in Minnesota while the market roils. Can't he use his trusty Blackberry to help us through this time of trouble?

I hate it when he goes on vacation. I feel like I need a voice of reason when the market sucks. I obsessively click on his RSS feed only to see "Forced Selling=Opportunities" over and over.

Help us Charles Kirk, you're our only hope.

What the FLIP was THAT?


I felt reassured as stops triggered on the way down. WOW! It was ugly. And then things turned around. I had a couple of buy stops that I canceled amidst the carnage. They were down 5%. Of course the ended up +15%.

I had two sell stops trigger and they came roaring back as well.

Pradeep said things would bounce soon, but nobody really knows if this is the end of the stinky market, or just a short stop on the way down. I know I sure don't.

I was pretty confident that I would stay out of things tomorrow, but now I'm not so sure. What's wrong with me?

Don't be a wimp

It's times like these that separate out people who beat the market and those who don't. Wimpy traders will be disheartened by several frustrating weeks and quit--possibly forever. They often jump to another strategy that continues to lose money and they grow even more frustrated. It's easy to do, but it is one of the worst things you can do.

The thoughts are difficult to stop. I know that over the long term, my strategy blows away the market. Even though I know that, these last few weeks have shaken my confidence a bit. We tend to have built-in biases that emphasize the downturns and obsess over losses. It's all part of trading, and the sooner you're able to handle a loss with the same emotions that you handle a gain the better off you'll be.

I've learned a ton during the last few weeks. Hopefully, I'll be able to use what I've learned and become a better trader in the future.

Wednesday, August 15, 2007

The Market Wants Me Dead

I have not had this many consecutive losses in years. This is the worst my screens have ever done. Today I was down another 1.57%. I have not had a positive day since August 2nd. Things look kind of bleak.

On the bright side, I'm still up over 25% while the S&P has just gone negative for the year. I couldn't have achieved that if I hadn't managed risk during the last 4 weeks. So I see that as a positive change in my trading.

I have never traded in a market like this and it has thrown me for quite a loop. I was pretty sure things would recover this week, and so far I've been quite wrong. All I can say to everybody is hang in there. If things do recover, there might be some amazing opportunities out there.

Tuesday, August 14, 2007

It doesn't look good

I made a decision to put some money to work on Monday. I should have waited, but I was feeling pretty good about the immediate future and I think my decision was sound. Things just haven't panned out the way I had thought they would yet.

I lost 1.80% today and .50% yesterday. I can't remember the last time I was on this kind of losing streak. As long as I am following my plan, there's no reason to freak and feel bad about my performance. No one has this thing figured out despite the many claims to the contrary. Losing money is all part of the game and the best traders are the ones who don't let it get to them.

I like to track the performance of other folks to benchmark mine. Two newsletters that I look at every week are StockSuperstars and The Prudent Speculator. They both post their YTD performance and it is my goal each week to stay ahead of them.

There are bright guys and gals managing these portfolios, so if you're keeping up with them you should give yourself a pat on the back. Both of them are struggling right now, so it gives me a good indication that things are tough all over right now.

I look to a few guys for their take on what's happening each day. Both Charles Kirk and Pradeep Bonde are on vacation now and their posting has been erratic. It makes me realize how much I read their stuff every day.

Sunday, August 12, 2007

This Week With StockPunk

I have no idea what Monday will bring. Stocks in my new screens did really well on Friday, but in this market, there's no guarantee that things will continue positively. I'm ready to get back in, but I'm holding out for some strong performances. I've got 7 stocks ready to go. I'm waiting to see if each one continues to show strength. I have price targets set on each and if they blow through those, I'll buy.

There's still a chance that I'll get slapped around like I did the last two weeks, but I'm seeing some strength in some of the momentum stocks that got beat up over the last few weeks. I'm willing to take a bit more risk now.

I've noticed over the last three years (I know that's not a lot of time) that two to three awful weeks with my screens often are followed by a few really good weeks. We'll see what this week hold for all of us. Good trading everybody!

Friday, August 10, 2007

Week in Review 8-10-2007

What a ride. This was a frustrating week for me. EVERYTHING that I tried failed miserably. I'm all cash going in to this weekend. I lost 3.17% this week despite barely trading at all.

I almost wish things would have been worse today. I could use some confirmation that I'm doing the smartest thing by staying on the sidelines. There were several of my watchlist stocks making 5% or more today and that bothered me a bit. That makes Monday difficult to judge.

I'm not convinced we're out of the woods yet. My best bet is to take next week off and re-evaluate things next weekend. We'll see if I can hold out that long.

Must . . . Resist . . .Temptation

Despite the general market's slide, several of my watch list stocks are showing some pizazz this morning. What I need to learn, however, is that one day doesn't mean much. My lack of patience has caused me to lose too much over the last couple of weeks.

If you read the blogs of successful traders (ie Charles Kirk, Pradeep Bonde) you'll see that they aren't stressed about not being in the market. They barely batted an eye during the huge gains at the beginning of the week. They're just waiting for things to turn around. There is no hurry to get back into this thing.

Thursday, August 9, 2007

Check This Out

Don't ask me how, but StockPunk got a tiny, insignificant, blink-and-you-miss-it mention in an article in the Wall Street Journal online. Laugh if you will, but I thought that was pretty cool. Here's the link. Look for it in the "Related Articles and Blogs" section at the bottom of the page.

Not Again!

Well, that was sure ugly. I finally have a day that legitimizes some of my decision making. I had one stock left this morning, and it's gone now. Down .50%. I still haven't gotten things figured out.

I almost jumped back in this morning. There were quite a few indicators that things were looking much better. It didn't take much to get the market all skittered. My screens are doing horribly with several stocks losing over 10% so far this week. VSEC was down 20% today and that was my most interesting candidate.

This is the first time since I started trading back in 2003 that my performance is beating most of my screens. Usually the dumb screens make me look foolish for trying to manage them. These last few weeks have ingrained in my brain the importance of risk management.

I hope everybody out there is using this craziness as a learning tool. I learn the most when thing are working against me. It's good to reevaluate and think through your trading philosophies. Don't be discouraged by this (unless you've lost everything). There are plenty of opportunities coming our way. Take a break and enjoy life and let the market take care of itself.

Wednesday, August 8, 2007

Dazed and Confused

I'm sorry to say that I have been unable to capitalize on this mini-rally that's taken place this week. Today I lost another .36%. My watch list continues to show wide swings with some stocks up 5% and some down 5%. I haven't been able to get a handle on what direction to take so I'm trying to be more of an observer than a participant.

STMX was down over 30% at the market open today and never recovered. Ouch. I'm glad I didn't own any of that one.

I'll be interested to see how my screens change this weekend. This has been kind of a wacky week, and if we're headed back up, I hope I can catch a piece.

I'm keeping a close eye on Stockbee because he's got some interesting indicators that he uses to tell him when to fold and when to hold. Today he's saying that things are looking more positive.

Tuesday, August 7, 2007

The Market Still Hates Me

I'm mostly in cash and the market has had two positive days in a row and I'm STILL losing money. Today I was down .14%.

A few stocks on my watch list had OK days today, but I'm still not seeing the type of gains that would indicate to me that I should jump back in. It's a lot easier to watch the market swing when you're standing on the sidelines, but to be honest, I'd prefer it to stay down when I don't own many stocks.

Monday, August 6, 2007

The market hates me

Charles Kirk wrote about the market's uncanny ability to read your mind and make you look like an idiot. That's what happened to me today. Despite a huge bounce today, my portfolio took a beating. It seemed like I got outfoxed at every turn. I was down 2.17% today.

Somebody made this comment on my post earlier today:

Do you really judge your trading by what happens within a few hours of putting on a trade? Reread Faith's section on outcome bias in his book.

My answer: No, I don't usually judge my trading that way. But when I trade for the wrong reasons (like worrying that I'm going to miss out on a big rally for example) I make major mistakes. That's what happened this morning. I saw a couple of stocks holding their own amidst the carnage of my watch list. I had planned to stay away from things and let them settle down a bit before trading again. Instead, I made some knee-jerk buys at their absolute highs and watched them quickly crumble. I even stopped out of one of them on a day the DOW rose 287 points. The problem wasn't with the trades I made. The problem was with the reason I made them.

You'd think I'd learned by now

My emotions suck. Despite all of my ranting about taking time, being patient, waiting for the right opportunity, I jump back in on a couple of stocks from my screens that seem to be bucking the trend. They both shot ahead over 5% in the early going as the market itself looked like it was going to have a pretty good day.

They held up when things very quickly went south. I'm a genius in ANY market I told myself. I then watched them plummet.

The day is far from over, but I wish that I would have taken my own advice and quit being so desperate to recover a little loss. I know better.

Sunday, August 5, 2007

Cramer Meltdown

A few of you have directed me to the video of Jim Cramer's rant on the Federal Reserve's blindness to the struggles of the current market. CNBC has since posted a clarification of his comments on their website here.

I think people took his emotionalism a little too seriously. In his second interview he presented his case a little more rationally.

Although I'm not sure if this is the time to be buying stocks, I don't think that we need to blindly sell all of our holdings either. It won't be more than a few weeks (maybe months--who knows?) until our screens are "working" again and we're back to making money.

Let me stress again the importance of managing your trades. Despite my disappointment in some of my trading decisions, I've only lost 2.5% in the last two weeks. No big deal. The world is not over.

The advantage we have as individual traders is that we don't have to go with the flow. We can maneuver in and out the market pretty much at will. So use that huge advantage to make the most of these uncertain times.

This Week With StockPunk 8-05-2007

More stocks are showing up on my screens as the market struggles. That's usually a good sign. However, after getting knocked around last week, I'm very hesitant to jump back in this week. We'll have to see how things play out. It's harder right now to determine whether a bounce back up is going to last, or if we're in a losing trend for a while longer.

There are a lot of folks screaming out there about losing 20% or more over the last couple of weeks. That's probably what would have happened to me a while back. Controlling your position sizes and the risk of each trade is EXTREMELY important during times like these. When the market is pushing ahead as a whole, it's easy to think you've got things figured out and that you don't need to protect yourself from risk. There is a lot of uncertainty out there right now and thinking that you know what's going to happen is a sure recipe for disaster.

VSEC has appeared back on my screens this week. It lost 9% last week, and looked like it was recovering until Friday. I'll keep my eye on it.

SMTX still shows up on my "To The Moon" screen despite losing 50% since I sold it in mid-July. I'm starting to see why mechanical investing can create problems for a trader.

It should be a very interesting week this week. I still have a couple of positions open that I'm sorry that I took last week. They are very close to triggering their stops so we'll see if the portfolio is all cash by the end of the week.

Friday, August 3, 2007

Week In Review 8-03-2007

I guess if this was a stellar week and the bulls had come roaring back, I would have been upset that I had stayed out of the market and would have been cursing my timidity. Instead, I jumped back in on Monday and Tuesday based on my emotions and very little data and now I'm cursing my lack of patience.

Luckily, I had to wait for a portion of my portfolio to settle for three days so I didn't cause as much of a disaster as I could have. I would have been wise to follow the advice of Stockbee (and other intelligent traders) who called this week pretty accurately.

For the week, my portfolio lost 5.44%.

Well, that really sucked

There's not much good that can be said for this week's insanity. Today was just plain ugly. My portfolio was down 1.54%.

Thursday, August 2, 2007

Over at Value Blog Review he's posted a list of the Best Stock Blogs. StockPunk is number 11 right now. I'm guessing the thing is broken or something.

I just got done reading Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders. It was interesting, but to be honest, any time someone writes about trading coffee futures my eyes glaze over. There wasn't a lot of meat in the book for somebody looking for interesting takes on the market or looking for better ways to trade.

A book I liked better that I read recently is
Trade Your Way to Financial Freedom. There seemed to be quite a bit of information that I found very useful. I went back and read several parts two or three times and I don't do that very often with books I read.

Today I was up a little bit .19%. I haven't been able to figure this thing out yet. A few of you are ticked off because I appear to be "market timing", and I've whined about how that hasn't worked in the past. But it's so dang hard emotionally to stay on the sidelines. I'll discuss my internal struggles more this weekend.

Wednesday, August 1, 2007

I'm still dumb

The market has not been nice to me. Who can figure this thing out lately? It came roaring back late today but my portfolio barely noticed. I almost wish the market would just keep falling so that I could be sure I made a mistake by getting back in.

Today I was down again, 1.62%.