Friday, January 14, 2011

I'm Back!

I've been away for a while. OK, I actually haven't been "away". I still live in Omaha, Nebraska. I still have access to the internet. I still trade.

But I've been on a bit of a journey over the last year. I hope to detail that journey here over the next couple of months with the intent of encouraging others out there who may be experiencing some of the same things that I experienced when I decided to begin trading full time.

Last month, Charles Kirk encouraged me to share what I've learned with my readers. I fully intended to begin blogging again on January 1st, but time got away from me and my laziness overcame me. I find it hard to comprehend the time and effort that guys like Charles must put in to their websites on a daily basis. I'm pathetic.

So, for the new year, I plan to regularly contribute to the blog. Hopefully I'll be able to encourage you with some of the things I've done (and am doing) right and prevent you from making some of the same boneheaded mistakes that I've made as well.


Anonymous said...

Hi - Welcome Back!
I was preparing for the two college classes I'm taking in the new term that's starts Tuesday (I'm a first-time, 62 year-old adult student) and came across a quote by Samuel Beckett, "Try again. Fail again. Fail better."

As I have been doing almost everyday, since I first came across your blog in July 2008, I'll check-in to see what I can learn from what your share with us about your trading.
All the best, and good luck.

- - joseph

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Scott said...


I'm sorry I have kept you waiting so long. I'd like to blame my poor trading results over the last year, but laziness was also a factor.

I think I'm much better prepared to write about trading as the market has kicked my buttocks, and I've had to humble myself and pick myself up and learn to "fail better". Thanks for the quote and thanks for reading!

Anonymous said...

Hi Scott,

I'm interested to hear what you learned. I've made some pretty dumb mistakes over the past trading year pretty much because I am morally opposed to how the Fed/Govt is reflating the leverage bubble to prop up banks. But that painful lesson has taught me that if you want to make money, you have to follow the market. When you follow something, you are reacting to it and thus should not expect to catch tops and bottoms but be properly positioned for them.

My research now is focused on cycle timing and determining positioning within the cycle. Against the cycle, then evaluating how different asset classes have done in similar cycles and how they are doing now on a relative strength ranked approach, not unlike I have also seen that styles, like the different AAII styles, come in an out of favor with the cycles. The rotation is risky, small stuff off the bottom, then deep value, then value, then garp, then growth, then quality... and then you want to be long short as the cycle is likely topping as denoted by inflation, commodity increases, tight credit spreads, flattening yield curve... then go to cash or sort an index or put on a curve steepener (for which there is now an ETF).

I have found that this way of investing allows me to balance my love of research and thinking, with actionable ideas that with discipline will be profitable in the long-term. It also allows me to be in the market without having to be glued to the screen which makes me a pretty irritable person.

I still have a lot to learn and use AAII SIPro, Keelix, Portfolio123 and read the MotleyFool Mechanical investing boards regularly.

Wishing you the best in 2011!