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  • #91
    Re: TG Fantasy Stock Market League

    Buy 125 shares of Honda (HMC) @ Market

    This taps me out - I'll have $119 in cash after my trades are executed tomorrow.

    ST -

    I'm just using the main stock trading page and selecting "Short" instead of "Buy." I'm not bothering with any stop loss: Go big or go home!
    A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

    "$250,000 a year won't get me to Central Park West."

    Comment


    • #92
      Re: TG Fantasy Stock Market League

      Tybalt's ridiculous "portfolio" has me thinking that some of you may be looking for a method, and lord knows I wouldn't recommend putting 100% of your money on a single bet. I can't even bring myself to hope for Tybalt's success, since that would only bankrupt many who follow his lead with actual money.

      Just so you know, Tybalt and I chat fairly often via IM and so I feel free to tease him so brutally. And honestly. ;)

      So here's how I roll.

      I have a streaming quote tool that comes with an account on TD Ameritrade. I have a number of stocks that I watch there and which I follow using another charting tool where I track several technical indicators.

      When I see a news story about a solid company, I may add its ticker to the list.

      Currently, I follow these tickers, roughly organized by sector. That way, when I look at the streaming tool, various sectors are grouped together.

      ACAS
      BBV
      BAC
      BRK.B
      C
      GS
      WB
      MBI

      CTX
      HOV
      KBH
      PHM
      TOL

      DUK
      EXC

      BBY
      LIZ
      NKE
      WMT
      YUM

      KO
      PEP
      CL
      PG

      JNJ
      MDT
      PFE

      GE
      UTX

      CSX
      NSC

      COP
      XOM
      HAL
      SLB

      AAPL
      GOOG
      MSFT
      RIMM
      T

      MON
      AA
      X

      There are other sectors and other companies whose stocks I follow, but for now this group gives me a feel for which sectors are performing well or poorly on a daily basis.

      These are (mostly) household names and highly representative of their respective sectors. They give me a feel for the market overall and help me keep an eye peeled for any sector rotation that may be going on.

      I also think it's important to understand how business cycles affect your investments. The best thing I've read about the cycles was in "Practical Speculation" by Victor Niederhoffer and Laurel Kenner. Here is a good explanation that translates business cycles into news you can use: http://personal.fidelity.com/product...or/cycle.shtml

      This image from that site tells it all:



      The sector numbers are placed on the chart such that the sector tends to outperform the overall market at that point.

      Comment


      • #93
        Re: TG Fantasy Stock Market League

        Originally posted by xTYBALTx View Post
        ST -

        I'm just using the main stock trading page and selecting "Short" instead of "Buy." I'm not bothering with any stop loss: Go big or go home!
        Yep, I got that far. My question is, how do you handle the closing part of the deal? For example, if I put in a Buy order, I know that I'll eventually be putting in a Sell order for the same stock. So, if I put in a Short order, I would then ______ later on?

        I'm assuming that to cash in/close on a Short order, I'd need to put in a Buy order once the price of the stock drops to the price I desire. But since I'm not sure, I don't want to start shorting anything yet.

        Also, possibly related, is the "Buy to cover" order there for when you try to short a stock and it goes up instead of down?
        [squadl]
        "I am the prettiest african-american, vietnamese..cong..person." -SugarNCamo

        Comment


        • #94
          Re: TG Fantasy Stock Market League

          Originally posted by SmokingTarpan View Post
          Yep, I got that far. My question is, how do you handle the closing part of the deal? For example, if I put in a Buy order, I know that I'll eventually be putting in a Sell order for the same stock. So, if I put in a Short order, I would then ______ later on?

          I'm assuming that to cash in/close on a Short order, I'd need to put in a Buy order once the price of the stock drops to the price I desire. But since I'm not sure, I don't want to start shorting anything yet.

          Also, possibly related, is the "Buy to cover" order there for when you try to short a stock and it goes up instead of down?
          Buy to cover is what you want to use when shorting a stock. It's the same thing as a stop-loss. So you'd enter a limit buy to cover order at some price HIGHER than where you shorted the stock.

          An example would be your shorting ABC at $10. You'd enter a limit sell order at 10, and an OTO Buy to cover at, for example, $12, thereby limiting your losses to $2/share.

          Remember that you can run little experiments on these techniques on 10 shares of a stock. Or even 1 share! You basically only lose the commission and that is probably negligible for the scale we're playing with.

          Comment


          • #95
            Re: TG Fantasy Stock Market League

            Originally posted by leejo View Post
            The sector numbers are placed on the chart such that the sector tends to outperform the overall market at that point.
            I take it then that you believe we are past the "late bear" and "middle recession" periods. That would explain your purchase of Nike (NKE) as I would consider it a "consumer cyclical" (although you could believe it to be a non-cyclical). Do you think the market bottomed early March?

            I am still confused about your purchase of Apple (AAPL). The stock has done well for you but your chart shows it to be an early to mid bull market purchase. Yes, the stock has trended up for two months but it's trended down for five. Are there any other factors in your decision?

            bkelly

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            • #96
              Re: TG Fantasy Stock Market League

              Terrific questions.

              Yes, from what I've seen the market bottomed in late January, but the real turning point in the market was March 17th, the first day of trading after Bear Stearns "merged" with JP Morgan. That's when the market stopped being a bear market and the bulls started returning. I can't explain it, but I've never felt such a profound sense of change in the market place.

              So yes, I think we're in the late-bear early-bull stage, which is why my basic strategy is to accumulate financials and the down-trodden homebuilders.

              However, I'm not POSITIVE about this, which is why I also pick up hedges, primarily in consumer non-cyclicals, utilities, and, rare though it may be lately, the occasional reasonably-priced energy stock.

              AAPL got hammered earlier this year, down from 200, and not really for much that AAPL did or failed to do. So when I buy at 150ish, I'm staring at a pretty easy 33% upside. I bought AAPL when I bought it for a few other reasons. 1) as a market leader in Tech, when Tech begins to rally in earnest, companies like AAPL, GOOG, RIMM, INTC, MSFT, and so on will lead. Bear in mind that "tech" is a very broad sector, so just because INTC does well or poorly doesn't mean that software companies or cell phone companies will outperform too.

              Anyway, that's the sort of macroeconomic view of AAPL. I bought when I did at the price I paid for several technical reasons. If you look at a chart of AAPL (ALWAYS use candles, not the line people!) you'll see that on the 15th AAPL reversed a short-term downtrend with a higher low and a higher high. It dipped below the 10-day moving average on the 14th, a personal signal that the price may be right. The OBV (see investopedia) shows that money is flowing into the company now, an indication that it still has more upside potential than downside risk.

              I sold 1/2 of my AAPL position yesterday for several technical reasons as well. Yesterday when I sold, the Will %R (investopedia) was -1.4, indicating that the stock was WAY "overbought". So I took some money off the table with the expectation that the stock would dip a bit over the next several days. So far I'm smelling like a rose on that one. If the price dips again I may pick up more shares.

              Buy on dips, sell on peaks, rinse repeat. None of this is guaranteed, but it helps to improve your odds where possible.

              NKE shot up like a rocket in mid-march. I don't know why, but like AAPL or GE or JNJ or a host of other top-flight companies, I never mind owning NKE, the questions are what's a good price and how much of my portfolio do I want dedicated to it? Not much and very little are the answers.

              On the 15th, NKE dipped below the 10-day average and actually touched the 30-day briefly, before the price got shoved back up from 65.19 to its close at 65.82.

              NOTE - when looking at a chart, you really must get in the habit of looking at candles and also learn what the "wicks" tell you. When a stock's candle shows a long wick, that means that somehow the stock's price got moved fairly dramatically up or down. Only institutional investors can move a price like that. It pays to keep an eye peeled for what the institutions are buying or selling. This is about the best way to see that when it happens.

              Anyway, this all happened on the 15th, but again NKE was showing a lower high and a lower low. I began waiting for a higher high or at least a higher low to indicate that the market was buying back into the stock. This happened on the 16th, so I bought it.

              If you look at what I have in my paper money portfolio, I think it's beginning to reflect my strategy. Overweight financials and homebuilders (the homebuilders have been sliding for the last several days and I may go on another buying spree very soon), underweight energy and commodities, which I think are in a bubble - still trading opportunities there but I will definitely hop in and hop out quickly with those trades - and build a diverse portfolio that represents other sectors that should do well on the days my main bets do poorly.

              Make sense?

              Comment


              • #97
                Re: TG Fantasy Stock Market League

                Also, AAPL's 50-day moving average crossed the 200-day average last week. A classic signal (as in one everyone uses and therefor something you can exploit) of a bull or bear market is when the 50 day is above or below the 200 respectively. When I saw that the 50 was about to cross the 200 AAPL moved from my "watch carefully" list to my "potential buy" list.

                Comment


                • #98
                  Re: TG Fantasy Stock Market League

                  The bears have been kicking my beloved financials and homebuilders squaw in the nuts for a few days. At last a good buying opportunity!

                  Bought 500 PHM @ 13.78
                  Bought 250 ACAS @ 30.48

                  Comment


                  • #99
                    Re: TG Fantasy Stock Market League

                    So basically today every one of my stocks has tanked. I have 3 out of 9 that are on the positive side of things, everything else is negative and dropping like a stone. :| Nothing has hit my stop-loss so far though. Can't tell if the market as a whole isn't having a good day, or if my decisions on stock were very short-lived on the good side.
                    [squadl]
                    "I am the prettiest african-american, vietnamese..cong..person." -SugarNCamo

                    Comment


                    • Re: TG Fantasy Stock Market League

                      The market is down across the board today with few exceptions. Oil and oil services stocks seem to be doing well. Our bears in the crowd are having a good day.

                      When I have a day like today, I think of a certain book (NSFW although I can't imagine anyone getting fired for looking at an amazon page): http://www.amazon.com/Another-Bull**...8893392&sr=8-1

                      Substitute "Day" for "Night" and you're right there with me.

                      Anyway, see how fast feelings of brilliance and exuberance fade into fear of losing money and looking stupid? Maybe tomorrow will be another dose of suck. Keep some cash on hand so you can buy on dips like this. Stay diversified so your fate isn't tied to a single sector or even the market's direction. Recognize that the market overreacts to the up and the down sides and that's where you find opportunities to make a bundle.

                      A stiff drink helps too.

                      Seriously, once you make a buy and set your stop-loss, there's really nothing to worry about. Unless and until you stop out, this is just noise that will be invisible on a chart in another year or two. If you do stop out, then it's time to look at what you can do better next time.
                      Last edited by leejo; 04-22-2008, 02:54 PM.

                      Comment


                      • Re: TG Fantasy Stock Market League

                        Originally posted by leejo View Post
                        Seriously, once you make a buy and set your stop-loss, there's really nothing to worry about. Unless and until you stop out, this is just noise that will be invisible on a chart in another year or two. If you do stop out, then it's time to look at what you can do better next time.
                        Yea, I'm not overly worried since nothing has stopped out. It's more of a, "um, wtf happened here mate?" thing. I still have over half of my starting cash un-invested, so it's not like I'm worried about going broke.

                        Tomorrow may be another story though. :P
                        [squadl]
                        "I am the prettiest african-american, vietnamese..cong..person." -SugarNCamo

                        Comment


                        • Re: TG Fantasy Stock Market League

                          I'll explain some of my positions. I am investing my fake money with the expectation that May is going to be really really bad across the board and that the major indices will fall dramatically - by which I mean more than 10% - somewhere between May 15 and June 15. Because of this, I'm shorting the S&P500 by purchasing SDS as well as shorting Ford (F). I'm going long on a few shares of Honda because I like their direction - but my Honda move doesn't really fit in with the rest of my mock portfolio; I had some cash left over and don't want to have any of my money not working for/against me.

                          Once I see major declines in the indices I'll begin transferring to a long position on the S&P500, may bulk up my investment in solid players like Honda, and will probably start shorting some consumer non-cyclicals (people overinvest in non-cyclicals during downturns).

                          So the big question is how good/bad May15-June15 will be, that'll be my make or break month. Until then, I've not really got a whole lot to manage.
                          A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

                          "$250,000 a year won't get me to Central Park West."

                          Comment


                          • Re: TG Fantasy Stock Market League

                            What makes you think the markets are going to tank during that time frame?

                            Comment


                            • Re: TG Fantasy Stock Market League

                              Originally posted by xTYBALTx View Post
                              (people overinvest in non-cyclicals during downturns).
                              Sorta. These have been trading sideways for ab out 6 months, but before that they did extremely well. Again, it doesn't pay to be late to the party, and it takes some adjusting to learn how much the market leads the rest of the economy.

                              Comment


                              • Re: TG Fantasy Stock Market League

                                Originally posted by leejo View Post
                                What makes you think the markets are going to tank during that time frame?
                                I'm banking (well, "virtually banking") on much weaker discretionary spending and property data than expected. I'm looking for a whip down in May-June so that I can cash out my short positions and transition into long positions.

                                If May isn't really bad, I'll get burned very severely. Maybe I can transfer all my holdings to Honda and wear a Honda sandwich board in the middle of 5th Avenue.
                                A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

                                "$250,000 a year won't get me to Central Park West."

                                Comment

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