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Richard Shaw

 
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  • The Dark Side of Stop Loss Orders [View article]
    Certainly whipsaws as you mention do happen, particularly if your stop points are within the reasonably expected price variation of the security. However for price variation outside of the reasonably expected levels, they can be quite helpful. Being stopped out in mid-2008, before the crash but after a decline from the Oct 2007 high could have saved many investors plans for retirement.
    Oct 2, 2010. 09:05 AM | 2 Likes Like |Link to Comment
  • The Dark Side of Stop Loss Orders [View article]
    You are correct that stops are not protection, as insurance. They are protection against losses greater than an amount you are willing to take to stay in the position. Puts can protect from first dollar (or after a specific loss if not at-the-money), but they have a cost and they expire requiring a renewal cost. Stops don't provide first dollar protection and have a corridor of loss potential, but the do not have a cash outlay and either do not expire or can be reinstated each time without cost. Both puts and stop loss orders provide forms of protection with different features, effects and costs.
    Oct 2, 2010. 08:04 AM | 16 Likes Like |Link to Comment
  • The Dark Side of Stop Loss Orders [View article]
    Limits with stops are not appropriate in our view, if the purpose is exiting falling positions. Either you need to exit or you don't. If a stop is triggered by a falling price that goes below the limit, you won't get out.
    Oct 2, 2010. 07:57 AM | 6 Likes Like |Link to Comment
  • The Dark Side of Stop Loss Orders [View article]
    No Free Cake -- good catch -- correction: we don't want be have positions that are more than 2% of DAILY dollar volume at the outside, preferring less than 1%.-- thank you.
    Oct 2, 2010. 07:54 AM | 3 Likes Like |Link to Comment
  • Buy and Hold vs. Rebalancing Results [View article]
    Some people combine a calendar schedule for rebalancing with and even threshold, such as X% variation in the price of key assets, to trigger a rebalancing action. Rebalancing, of course, chases prices down and scales out of rising prices. If a serious enough event or eventuality exists, standing aside for a while is the resort of some as well.
    Sep 16, 2010. 11:51 AM | Likes Like |Link to Comment
  • Now It's Truth or Consequences for the S&P 500 [View article]
    That's really my point. Unless the "neckline" strongly pierced, the price would likely fall significantly, making it a "triple top" -- probably should have described the even of falling off as creating the triple top -- that's why its "Truth or Consequences" time.
    Sep 15, 2010. 07:00 AM | 2 Likes Like |Link to Comment
  • Now It's Truth or Consequences for the S&P 500 [View article]
    Sometimes price patterns become self-fulling -- patterns like this tend to have many followers. More importantly expectations about a more business friendly government post-election could at least temporarily raise market levels. We agree that earnings estimates are coming down and the macro doesn't look so good (but not as bad as before for now), but the pain associated with that may be pushed down the road for a while.
    Sep 14, 2010. 11:47 PM | 3 Likes Like |Link to Comment
  • Key Stock Index Short-Term Re-Entry Price Minimums [View article]
    David, I agree that we use trend following, but want to point out also that we only follow trends in fundamentally attractive securities. We feel a blend of sound operations, valuation and price performance is a good way to go. Some trend followers will own anything that is rising, but we will not. We first select securities for operating, valuation and yield considerations, then select among those that are in rising price patterns.
    Sep 6, 2010. 10:36 AM | 1 Like Like |Link to Comment
  • Key Stock Index Short-Term Re-Entry Price Minimums [View article]
    THE POINT SIR IS HOW MUCH THEY MUST GO UP TO BE ATTRACTIVE TO US.
    Sep 4, 2010. 10:05 PM | 5 Likes Like |Link to Comment
  • MLPs -- Part 5: MLPs Passing Very Simple Fundamental Screen [View article]
    That is an incorrect observation. We have not sold our MLP positions during this series.
    Aug 29, 2010. 10:36 AM | 1 Like Like |Link to Comment
  • Conservative Equity Income Filter: Part 1 [View article]
    That is an important subsequent dimension for this particular screen. You are right to look to that. All things being equal, you may be better off with lower debt companies.
    Aug 25, 2010. 03:58 PM | Likes Like |Link to Comment
  • MLPs -- Part 6: MLP Structure and IRS Qualification [View article]
    It's not that simple. We will discuss in Part 7.
    Aug 23, 2010. 01:49 AM | 4 Likes Like |Link to Comment
  • MLPs -- Part 6: MLP Structure and IRS Qualification [View article]
    That is a topic for the last part (Part 7) of this MLP series
    Aug 22, 2010. 12:36 PM | 3 Likes Like |Link to Comment
  • Public Master Limited Partnerships -- Part 1 [View article]
    Instead of "woodeneye", you should be "sharpeye"
    Aug 12, 2010. 05:27 PM | 1 Like Like |Link to Comment
  • Public Master Limited Partnerships -- Part 1 [View article]
    Thanks. That is a typo. Should say "MLPs". We'll fix that on our site and see if SA can fix it here.
    Aug 12, 2010. 05:26 PM | Likes Like |Link to Comment
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