Monday, May 23, 2011

Lessons learned from my Last Trade

I'm out BPI this morning after a two week period. I gained more from a knowledge perspective rather than actual cash; However, that counts, too.

I will add to this post tonight or tomorrow.

{Edit 5/25 - trade dynamics}
The for-profit schools are governed by the "triad of state licensing, institutional accreditation, and federal financial aid eligibility".

The Bear Case:
  • Several states are suing distant learning schools for their retention rates.
  • The Higher Learning Accreditation was summoned to the HELP Senate subcommittee in March and is throwing BPI "under the bus".
  • The senate has subpoenaed BPI to its next subcommittee hearing.
  • On July 1, new federal rules go into effect that will require that distance learning schools register their courses in the states where their students are located -- a massive amount of new red tape that was originally designed to protect consumers from unscrupulous for-profit online schools.

The Bull Case:
  • As of May 9th, The OMB has 90 days to respond to the new regulations, has included non-profit and private schools in its results, and has a favorable view of the 2010 draft.
  • A lot of Political Posturing is taking place.
  • For-profit schools have had up to a year to adjust to these new regulations, and have fixed many of these issues and problems.
  • There is a high concentration of shorts in BPI. There are many associations that are suing the shorts.
{Edit 5/25 - training dynamic}
- ACTION FIRST - buying on first blush, seems to appeal to me
- doing dd afterwards  keeps me involved and inspired
- finding new questions keeps me interested and participating
- contrary investing pursues all types of trading disciplines, including short selling
- quantitative factors are as important as financials
- insider transactions and bios are as important as financials
- and yet you have to be consistent
- don't discount politics and posturing
- dig until you find the seed of a controversy, then explore it even more
- allow for a loss,[within risk/reward and position sizing] as you are waiting for the plan to pan out
- since I work alone, it is even more important to realize biases -- no one will correct me except the market...
- avoid the "not invented here" syndrome

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