Thursday, March 31, 2011

My favorite [ and free! ] Academic Earth lectures

Academic Earth offers free access to video courses and academic lectures from leading colleges and universities. Their website is here.

Equity Valuations:
One of the best free "Equity valuation" lecture I've ever seen is by Dr. Aswath Damodaran.

Wednesday, March 30, 2011

Swing Trading and Short-Term Trading

Are you left or right brained?

I get it. There are tons of different investing styles. We all use different ways to find the stock we want to trade in; However, once we have an idea, we should go into action.

If your a short-term trader or use swing trading techniques, what  is your action plan?

Sunday, March 27, 2011

What will silver look like next week?

ZSL keeps falling. The price of silver keeps rising. If there is a true silver shortage, the ultrashort silver etf is probably exacerbating the situation.


ProShares UltraShort Silver (the Fund) seeks daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of silver bullion as measured by the United States dollar fixing price for delivery in London.

Passive, index investing

During a crisis event, I've noticed the best place to be for the rebound is the index. I don't usually recommend passive investing; However if you realize that all stocks are trending up, why waste time. Later you can pick out the extraordinary finds and hidden gems.

Saturday, March 19, 2011

Scalability of your trading process

I am a part-time swing trader. I use a 2% total risk drawdown. I can only pay attention to 2-3 stocks at a time. My account is not really that large. If I want to quit my day job, how can I survive?

0) increasing my risk by making the drawdown larger

Tuesday, March 15, 2011

Google tool

Google helps track and find Japan earthquake victums

Black Swan -- so now what?

So now what?

The time to plan for an event like this is before it happens. Good article

Turn off the TV news, or at least mute it so that the terror/sensationalism is diminished.

A classic black swan

On March 19, the moon will swing around Earth more closely than it has in the past 18 years....

I don't know if that caused the earthquake and tsunami in Japan. Here's another point-of-view article.
But my point is that no one was hedging their bets on this one. I was thinking the problems would come from China, the Middle East or Europe. Not Japan. And that is the classic definition of a black swan. No one predicted this disaster.

Sunday, March 13, 2011

commodity etfs

a: when the hunt brothers cornered the silver market in 1980, the price rose to nearly $50/oz., but on "silver thursday" retraced back down to below $11. I recognize that current global issues are diff, in that china/india consumption growing, but I don't think an amt sufficient for current price. I see current price a reaction to the inflated price of gold (inflated by fear of global economic instability). I see gold inflation coming down in next year or so, and silver should come down, too....
me: that sounds likely
a: oh, good. a moderately safe way to play this: (assuming my feelings have some semblance of "rightness"...)
me: watch for daily adjustment; they will eat up your profits in a vehicle like this...even if you guess right, it will not match the market....Just a CYA...
a: can you guide me on that? further info?
me: Let me has something to do with the fact your dealing with futures/options and not the real market+they need to reconcile every night and buy in the morning because of margins and redemptions.
me: if you hold on to them for 1 or 2 days it will match; Otherwise your paying a price.
  I didn't find the exact article, but another one. Try this site for other educational material.
Good for  day traders but not investors.
a: good article. ideally, as I'm seeking to follow a big trend rather than day-to-day changes, length of contracts shouldn't be a concern. this etf (ZSL, that is...) has gone from 182 to 26 in one year. if it goes down another 50%, I'll buy more.... I did say "ideally"... :-)
Interestingly, this one has done several reverse splits (to keep the price attractive), a 1:10 a year ago, and a 1:4 last month...
I entered the words "silver technical" into google news, and got way too many rosy reports on the future price of silver. does that say a bull market (in that commodity) has seen it's better days?
me: Can I voice your side of the argument? If you capture 10x bagger when the hard asset appreciated 40x, is that bad?  and I grant you that I only speak of catching an asset/etf that is going sideways or up 4x and you losing money in the long run.....
a: 10x is 10x. the choice to use the etf vs. the hard asset is a choice of exposure. if you have the hard asset, you need to dispose of the hard asset at some point. with an etf (or other security), you need merely sell within a large marketplace.
do you mean hard asset as in hard asset, or as in instrument that represents hard asset?

 me: [plus the storage costs] You must really hit it on a trend, though. ---> when everyone knows that its going into a meltup or meltdown. 10x is a good return to me....I'm agreeing with you.
a: the hunt brothers had to dispose of quite a bit of hard asset, and futures positions came due with margin calls. I'll bet they'd have used ETF's if they could have....
that's what I'm thinking, as I look for the "next best thing" - where are the apparent trends? what aspects of this market are too high, what too low? what stocks are seemingly too high, what seemingly too low. Warren is looking for the same thing, but on a much larger scale.
me: my argument is that, unlike value stocks, there is a large cost to being "early".
a: why is there not a large cost in being early with value stocks?  it might be more of an opportunity cost...
me: exactly, value stocks have an opportunity cost, but not a daily penalty for being wrong.
if a value stock only goes up 1% in a month, you don't lose money, but an ultra-short etf would.  or ultra-long etf. let's keep them on the same side of the ledger...
me: a stock can go up, sideways or down. on value stocks you can survive till next month with 2 out of 3. on a etf ultra you can survive with only 1 out of 3
a: I don't know. I'm viewing the etf like a stock. I'm anticipating that it will fall with the rise in silver, and that I'll double up after it falls 50% or more. but, I'm fairly certain that I'm right about the overbought nature of silver, so this is the best, albeit risky, way for me to act.

And that made sense to me. The Chat stopped there. He is going for the home run, not the single. Only index etfs can be looked at like stocks. Commodity and ultra-short/ultra long etfs are like options and futures because of the underlying vehicles. They are good for short-term hedges, day/swing traders or long term trend home runs.

That's my amateur guess.

Wednesday, March 9, 2011


FNSR is down 14+ points in pre-market. What's interesting is the reason. Forward guidance was down--because they think China is slowing down. That's the first evidence I've seen that the China's rate change is having an affect on the U.S.

China has been adjusting interest rates and rules on second/third home mortgages and businesses. They are trying to slow down their economy to wring out inflation...especially food & energy inflation.

Here is Andy Xie take on China

That's my amateur guess.