Bloody Sunday

It was a Sunday to remember.

• Lehman Bros apply for Chapter 11 bakruptcy.
  
• BoA buying Merill Lynch
• Everyone wanting the Fed to guarantee toxic loans. Well, the Fed already had 5 trillion of added debt. That was politically acceptable. To guarantee a Wall Street takeover this close to the election wont be.

Asian markets were sharply lower, I am guessing the European and US will start sharply lower too. Gold was sharply higher as the markets flew to safety. I am guessing bond prices will be higher too.

One more thing, I think panic selling like the one we are about to see is probably a good thing for a true bottom. That being said, I do have a small short position in DECK. I am hoping it breaks through its triangle pattern tomorrow :-) , ON THE DOWNSIDE.

Will Bloody Sunday be followed by Black Monday?

Let the games begin.....

My contribution to fight Global Warming

I finally put up a clothes line in my washing space. This was something i wanted to do for a long time. I felt that drying is such a waste of energy and it is harsh on clothes anyways. Air drying is so much better. I am sure mom would be proud of her wayward son now :).

AHHHHHH Bear attack inside my apartment

I never thought that Oregon was big bear country, until I walked into my apartment and found a big black Yogi in my living room. Ahhh... should have bought a shot gun.




I watched it for a few minutes and it was not moving. So I gathered some courage and decided to find out if it was still alive......


Oh no, looks like I had woken up the big beast.....


She snarled at me and began to approach her victim (poor old me)... I thought the flash would scare her off, but damn she just stopped and posed for the camera.... Look like this one likes to play with her poor victims....


Not today though, she was hungry as a bear and she opened his jaws wide open and.....


I am glad hell has Wi-Fi so I can warn other potential victims in the Portland OR area. I dont think you can outrun this black gal, so I suggest keeping a couple of juicy steaks to distract her while you can escape.

Change

My own personal rules for change (revealed one at a time)

Rule no.1- Do not replace an OIL NUT from the south with an OIL NUT from the north

PS- I wonder if the "Rev" Pat Robertson considers Ike to be God's revenge for sending those OIL NUTS to the White house.

Thoughts about trading

I have now completed close to 2 years of trading. I am up close to 25% over the last two years. Being a newcomer, I had a rough beginning trying to understand the intricracies about the market, but I never had the huge single drawdown like the ones you read master traders having. I was close to one, but I managed to get out in time. I remember being 800 shares deep in a pharma company (that was close 80% of my account) and in the midst of a FDA review. Trading was halted and my heart was in my mouth. Fortunately, the review was favorable and though there was no spike in the price, I managed to get out at a breakeven. That taught me one of many lessons. Here are some of them, i hope they help you. I hope they help me by getting reminded everytime I read this post.

1. Position size and Risk size every purchase. If you cannot, do not take the trade. If you are on a bad streak, reduce the sizes. It does not matter if you have to take odd lots, there is no rule in the world that tells you to buy multiples of 100.
2. Always have a stop in mind. Mental stops are fine. I understand that it is difficult to tell the market where you are planning to sell, expecially if the market is not highly liquid like the index funds. You would not show your next 5 moves in chess would you? Have hard stops if you are going to be away from your computer for the whole day.
3. Have greater tolerance for index funds like SPY, Qs, than individual stocks.
4. Stick to liquid stocks. Daily trading value should be atleast 50 million dollars. I know there are others who say that you should stick to stocks with a min daily volume of 1 million or more. But would you trade a stock that trades at 5 dollars with a million share avg daily volume. That would be stupid as you have to buy 1000 shares for a 5000 dollar investment.
5. Do not.... let me repeat Do not buy pharma and bio tech stocks. They are highly news driven. If you do intend to go that way, stick to an index fund like XBI.
6. Do not bottom feed. Only toxic feed lies there.
7. Do not try to catch a falling knife. unless you see a big jump in volume showing a exhaustion and bounce pattern. Lower your position size and have a slightly wider stop in this case. Stick to index funds in this case.
8. Confidence is everything, over confidence will get you nothing. There is nothing wrong in losing small or missing out on a big move.
9. Dont follow market gurus. Trust your own judgment.

Good luck