Saturday, August 23, 2014

You can't be serious?

That's right folks, 
I am officially back. I did complete one of my objectives however; I am still in the thick of two projects that are taking much more time than I had anticipated. I am also getting ready to embark on some do it yourself home remodel projects so I will continue to be stretched for time. With that in mind I am going to try and get a video out at least once a week.

During my sabbatical I was still actively trading. However, I was focused on my execution, tweeking some of my indicators and broadening my horizons. I had never shorted stocks, I always felt like it was UN American or a bad karma thing to do. I have begun to dabble in that realm and it’s been a great experience so far.

One of my best trades was $LOCO I love the food there and I was anxiously awaiting the IPO. As you probably know it had a tremendously successful IPO. However it had gotten overdone and ironically it was my first short when it struggled near the 41.50 area. I held it for three days and made a nice chunk on it. It was a great experience and helped me view the market from a whole different perspective. Usually I can't walk away from the computer because I fear a trade I took might tank. It was strange being afraid to walk away from the computer out of fear a stock might take off. My latest short success story was just last week in $JRJC. I rode $JRJC long for its massive move up off of pr. I was down to my last 200 lotto shares that I had a limit sell order on for 12.50. The stock had just spiked over 11 with authority and then had a sharp reversal off of some Citron tweets. I immediately sold my lottos and shorted some shares. I have learned the hard way that once Citron gets involved it can be very painful for longs. I made a nice chunk on the way up and a nice chunk on the way down. I took another short on it yesterday near 11 when it failed to break through with conviction and scaled out most of my position @ 10.26 I hold 100 shares for lotto short. 

Why the change of heart? I realized that it’s just a trade, whether long or short, I am just trying to make a few bucks. I don't want JRJC or LOCO to go bankrupt and I certainly don't want people to be wiped out of thier investment. Stocks get undervalued and they also get overvalued and if I can make a few bucks on a rebalancing of price to fundamentals or a temporary shift in momentum then>> why not?  

As a former buy and hold investor I would get emotionally attached to a company because of all the time spent on research, forming an opinion on their long term outlook. I am still an investor for my IRA but when I am trading it’s a whole different mindset. 

Vringo was a perfect example of emotional attachment $VRNG and I took a pretty good hit on that one recently with the Supreme Court decision. At one time it was my largest holding, thankfully I reduced the size of my position significantly when it started to become clear to me management were the only ones making money and that their entire business model was built on the outcome of opinion from a few judges. It was a binary event just like owning a biotech. It was high risk with potential for high reward. I was still overly exposed to that position even with my reduction and it was a hard lesson learned but it was also a blessing in disguise. It was an epiphany event!  

Another thing I was doing was seeing how my trades did without sharing them through social media. I wanted to see if there was a measurable impact on my performance results. I found that I was much more focused and my results did improve by several percentage points. However, it was not nearly as fun!!!!

So without further ado here is this weeks video!

Hope you enjoy the video have an awesome weekend and fantastic week tading next week!
Best of Success!