Re: TG Fantasy Stock Market League

**leejo** · 04-16-2008, 02:54 PM

I'm watching all the transportation stocks and agree with a lot that you say. Plus, I think that FedEx and UPS are decent recession plays - I look to companies like ebay and craigslist to see increased business as people try to exchange their illiquid assets (electric guitars, velvet art, used bongs) for cash.

You might also want to keep an eye on CSX and NSC. I'll be buying either one or both when the price dips a bit - with my real money.

**leejo** · 04-16-2008, 02:58 PM

Originally Posted by SmokingTarpan

Alright, let me run through this and make sure I have it. We'll say I want to buy shares at the market price of $10, and sell if they drop to $9.50.

So, I decide to buy stock XYZ. I choose the action Buy, and leave Market selected. Then under the advanced orders section, I choose "One Triggers Other: Stock". On the next page I enter stock XYZ and choose the action Sell. Then in the field "Stop $" and put in $9.50.

This will let me buy shares at market price ($10 for this), and if the price drops to $9.50 it will automatically sell for me? Hopefully I have that right.

He's got it! By jove I think he's got it!

Now, run over to investopedia and look up "whipsaw". I guess you just have to get whipsawed a few times before you get a feel for a good stop loss $. You have to set it tight enough to avoid losses, but if you set it too tight then you run the risk of getting shaken out of your position with a whipsaw. The stock will dip like $.02 below your stop loss, then immediately shoot up $1.50. You'll swear that a horde of daytraders have hacked your machine. It's like they KNOW exactly where you set your stop. They haven't hacked your ride, but the really good players can eat your lunch.

**leejo** · 04-16-2008, 03:24 PM

Damn I did it again. My brain's on Central time, and 2-3 is the last hour of the trading day. But I'm on the east coast and so I should be waiting an hour. Habit.

Anyway, just made two buys

100 NKE @ 65.94
200 PG @ 69.20

I didn't mean to buy 200 PG, I meant to buy 100. Fortunately this isn't real money but take note - fat-fingered orders are nobody's problem but your own.

**War.mongeR1** · 04-16-2008, 03:45 PM

I've heard PG is great to have in your portfolio for the long haul, so I don't think 200 shares is such a bad thing in my extremely novice opinion. I have 20 shares in them myself. They're not doing as hot today, but everything else of mine is rocking. Over $1000 profit today with only $46,753.20 invested thus far. We'll see how I fare after the trading day closes.

**Drizzid** · 04-16-2008, 04:33 PM

Just purchased 200 shares Clean harbors inc (CLHB)

They just increased their incinerator capacity which should help them continue to increase profits over what they are already doing. They also work with a number of fortune 500 companies which I think is a good indicator of future stability

**SmokingTarpan** · 04-16-2008, 04:54 PM

I bought 1000(!) shares of Blockbuster @ $2.85. While their stock is low, it seems to be on a recovery incline, and I'm also thinking that their buyout offer to Circuit City is going to bolster them some. Interestingly enough, this was the stock that was giving me the error earlier. In order to buy it, I had to put in a stop-loss as well. Yay for bugs, it seems.

Question on the Google portfolio. What does the column labeled "Day's Gain" represent? It's obviously not how much I've gained/lost in total today, as the numbers would be quite off then.

**bkelly** · 04-16-2008, 04:54 PM

The market was up significantly today, so I jumped in with two large trades.

Bought 275 shares of SRS at $89.89 - $24,719.75 purchase
Bought 825 shares of SDS at $60.70 - $50,077.50 purchase

SRS is an ETF that attempts to mirror double the inverse of the Dow Jones U.S. Real Estate Index
SDS is an ETF that attempts to mirror double the inverse of the S&P500

So, I'm betting the market will decline. I've put 50% of my portfolio into a bet that a main index of large companies (the S&P 500) will drop and another 25% specifically into companies in the real estate sector. Both are volitile, but these aren't long term positions and I'll be looking to get out after the market drops which I hope will be soon, but it could be a wait. I have a few reasons for this position.

1) The market has moved above it's average of the last month and a half.

2) The economy is in trouble because consumers, who are 75% of the market, are tapped out.

3) We're still in real estate decline. Lower interest rates made the sub-prime mess almost a non-issue, but we still have prime and alt-a mortgages to work through over the next couple of years. Plus, subprime will start hurting when interest rates do go back up.

Let's see what happens.

bkelly

**leejo** · 04-16-2008, 05:23 PM

We are pretty much polar opposites. I'm long on financials and real estate.

**War.mongeR1** · 04-16-2008, 05:28 PM

Well, I fared pretty well today. This morning I had invested $46,753.20 in various stocks. I made $1,435.40 overall with an overall return of 3.07%! Not too shabby!

My hottest performer was Newmont Mining Company that gained 18.11%. Of the energy companies, XTO did indeed do well, gaining 4.87%. Of the 16 different things I'm invested in, only 1 had a loss. That was PG. I'm not worried, though. They'll bounce back by the end of the week, I predict. I'm gonna throw some more money XTO's, FPL's, and Franklin Resources' way tonight. This if fun! Almost as good as CS and BF, but unlike most games, I can get away with playing this one at work! Woohoo!

**War.mongeR1** · 04-17-2008, 10:18 AM

Originally Posted by SmokingTarpan

I bought 1000(!) shares of Blockbuster @ $2.85. While their stock is low, it seems to be on a recovery incline, and I'm also thinking that their buyout offer to Circuit City is going to bolster them some.

Well, although Circuit City did not accept the offer, I think 2.85 is a great buy. Back in 2002, BBI shares were around $30. Blockbuster is trying really hard to compete with Netflix, so they might just pull a rabbit out of their hat and pull back up. I think they will bounce back this summer as more kids are home from school and want to rent video games. $2.85 is a steal and too good to pass up, so I am buying 2000 shares.

So how'd everyone do yesterday? Oh yeah, and what else should we be buying in my opinion? Stock from the 4 major railroads. I'm gonna start with Burlington-Northern and Union Pacific.

Edit: I can't buy RR stock for some reason. It's doing the same thing that BBI did to SmokingTarpan. The symbols are BNI and UNP. Hmmmm.

**leejo** · 04-17-2008, 10:52 AM

It looks like there's a bug in the CBOE tool. One work-around is to enter an advanced order with a stop-loss that's entered at the same time you enter your buy order. I posted instructions for using that a few posts ago.

It's also a best practice. One thing about stop-losses: the market couldn't care less about your pain threshold. When you're deciding where to set a stop-loss, you have to look at the stock's history for support and resistance (see investopedia for what these terms mean), and set your stop-loss just below a good area of support.

For example, if I'm looking at ABC that's trading at $10.20, I may enter a buy order at $10 with the expectation that it'll dip there briefly then proceed along it's merry way to $100.

Looking at the stock's history, I may see that recently the stock had a double-bottom at $8.70ish. So I want to set my stop-loss slightly below that - you don't want to get stopped out just before a support position. That's dumb. Say I'll set mine at $8.60

So now I'm talking about a potential $1.40/share loss. How much am I willing to risk? A good rule of thumb is 2% of my working capital. In our scenario we have $100,000 in working capital, so I'm willing to risk $2000 on this trade.

Badda bing badda boom, $2000/$1.40 is 1429. That's the number of shares I should buy.

That's how I roll anyway. I rarely get anywhere near risking 2% on a trade though. I mostly just set my stops as described above, but I get in accumulation mode for a sector and pick up shares on dips in blocks of 100 or so. I'd rather buy 100 shares of ABC and 100 shares of XYZ and so on than have 200 shares of ABC. It keeps me from falling in love with a single stock and marrying my future to its fortunes.

**leejo** · 04-17-2008, 11:09 AM

Originally Posted by War.mongeR1

Well, although Circuit City did not accept the offer, I think 2.85 is a great buy. Back in 2002, BBI shares were around $30. Blockbuster is trying really hard to compete with Netflix, so they might just pull a rabbit out of their hat and pull back up. I think they will bounce back this summer as more kids are home from school and want to rent video games. $2.85 is a steal and too good to pass up, so I am buying 2000 shares.

So how'd everyone do yesterday? Oh yeah, and what else should we be buying in my opinion? Stock from the 4 major railroads. I'm gonna start with Burlington-Northern and Union Pacific.

Edit: I can't buy RR stock for some reason. It's doing the same thing that BBI did to SmokingTarpan. The symbols are BNI and UNP. Hmmmm.

I wouldn't touch Netflix or Blockbuster or Cirtuit City with a 10-foot pole. Blockbuster and Netflix are in a death struggle from which only one will walk away. Unless of course someone like Apple changes the distribution mechanisms entirely and the market disappears out from under them. Seems to me that Blockbuster and Netflix are in roughly the same situation the record companies are in today, and I expect the same problems that exist in digital music distribution to filter to digital video distribution with the same woeful tidings for the current players. And until I walk into a Circuit City that isn't empty and depressing...

I did fine yesterday. Right now I'm sitting on the following stocks:

AAPL
BAC
GS
NKE
PG
PHM

I'm also short on a stock I'll decline to name

Looks like I'll be picking up a few more names today if the market stays a little soft through the day.

I am so bullish on homebuilders right now. If you look at their tickers, they really bottomed out in January and have been trading very strongly since. They react to bad news by dipping modestly on low volume. They react to good news by surging on high volume. What's not to love other than the lack of dividends?

So, FWIW my basic strategy is to accumulate homebuilders and financials while also hedging by picking up stocks that do well during "flights to quality" (see investopedia). These are the utilities, consumer non-cyclicals, etc.

I'm trading energy stocks, which have been stuck in a slightly bearish trading range for the last 6 months. I've been watching these stocks for a while so I feel like I "get" them well enough to know when to go long and when to go short on them while they're in this range.

To sum up, I'm "investing" in the financial and homebuilder sectors, believing that by election day I'll be smelling like a rose with these guys. I'm hedging with all sorts of consumer, industrial, and utility stocks. I'm basically bearish on energy, but there are still opportunities there to make a buck after a sell-off, so I'll go long one day on a stock and short it the next.

**SmokingTarpan** · 04-17-2008, 01:01 PM

Originally Posted by leejo

I wouldn't touch Netflix or Blockbuster or Cirtuit City with a 10-foot pole.

Amazingly, Blockbuster is currently the only stock that's making me money right now (not to say that there's zero chance of it sliding down the mountain the minute after I post this, though). Blockbuster has actually made more than double what I've lost on my other two stocks. Currently I own:

BBI Blockbluster Inc
INTC Intel Corporation
NVDA nVidia Corp

Yesterday I finished about even (down if you take into account commission fees). I'm watching a few stocks right now, and I'll probably purchase some before day's end. I suppose my problem is that I'm quite timid about making deals, even if it is just fake money. :P

**leejo** · 04-17-2008, 01:44 PM

Originally Posted by SmokingTarpan

Amazingly, Blockbuster is currently the only stock that's making me money right now (not to say that there's zero chance of it sliding down the mountain the minute after I post this, though).

Or I could be totally wrong.

It's rare, so you have to savor these moments. Mark your calendars people!

I suppose my problem is that I'm quite timid about making deals, even if it is just fake money. :P

Good plan. I guess if fools and their money are soon parted, then the corollary would be that it's very hard to pry money from a wise man's hands.

Fear and greed dominate these decisions. Fear of losing money. Fear of looking stupid (this is especially the case when you're married and can't just keep your mistakes to yourself). Fear of missing out on a stock's run. Greed tells you to hold on to a stock that's near the end of a run just a little bit longer. It makes you buy stocks you don't understand. On margin! It makes you throw good money after bad. Etc.

I haven't been shot at but I certainly recognize that playing a FPS and having a crew-served .50 tear a building down around you in real life are simply not the same. If you feel a little uncomfortable making these paper trades, you'd better get used to that feeling and learn about yourself. When we get into using real money, what we're really doing is managing and investing in our futures. Them's high stakes.

**Switch** · 04-17-2008, 03:27 PM

Originally Posted by Drizzid

Right now how can you go wrong with oil?

Financially or Ethically?

:P

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