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  • 10% Correction Feels Imminent [View article]
    I'm not confused by the cap weighted indexes but do trade them because they are stocked with strong companies and are easier to comprehend for me.

    So, the underlying breadth weakness has never bothered me that much.
    Jul 28, 2015. 06:31 PM | Likes Like |Link to Comment
  • 10% Correction Feels Imminent [View article]
    The problem with these type of corrections "predictions" is that the people making them -- see Mark Hulbert -- have been making them for a while and you can assume (if they were really investing their own advice and not just going for page hits and churning out publication pieces) that they have been wrong and underperforming (via indexes anyway) for some time.

    So if and when they are "correct", there is nothing predictive about their predictions because their % is so lousy.

    Now, would 10% correction in this environment surprise me? Not at all, but then again, I always trade the indexes expecting the worst, by using conservative scaling in and out.
    Jul 27, 2015. 08:31 AM | 2 Likes Like |Link to Comment
  • Market Timing Is Not Appropriate For Retired Investors [View article]
    Thanks Chuck. Though not for everyone and involving plenty of (paying attention to the market) personally unproductive "screen time", actively trading indexes (buying after weakness and selling after strength, in scales (plenty of nuance to it though)), some of it intra-day, some of it longer term, is indeed appropriate for this retiree. And that is a form of market timing.

    In that I am NEVER sitting in a large amount of stock relative to my total capital, my black swan (or even gray) risk is much much lower that a buy/hold investor's. I attempt to make up any buy/hold outperformance by taking more frequent, smaller profits (but am still on the side of buy lower/sell higher). In doing that, my bad event risk is reduced considerably.
    Jul 25, 2015. 08:25 AM | Likes Like |Link to Comment
  • UWTI And UGAZ: A Cautionary Tale Of Fortunes Won And Lost [View article]
    Every once in a while -- now, for instance -- I think of trading Nat Gas exclusively, in spite of the recent negative returns. It is volatile but that is good, for active trading, right? "Just" use UGAZ and scale in VERY slowly after weakness, with VERY small position sizing, up to some VERY conservative amount of inventory as price goes against you. Never, ever, go all in - ever.

    One thing about Nat Gas, my guess is that it would do pretty well during most black swan events, even military or terrorist induced though the government might step in and regulate price if something really bad happens.

    Scale out into strength. Very little cash-at-risk if you're doing it right but of course, if price just takes off, you aren't making much because you're not holding a lot. No stops.

    On the stock market index side, you could do something similar with XIV.

    Trading UGAZ with size and stops though? I don't think so.
    Jul 20, 2015. 08:54 AM | Likes Like |Link to Comment
  • The #1 Stock In The World [View article]
    Oh, about a month. :0 Though I've used a similar approach with indexes, for about 17 years. Underperform (but make some money) in straight up moves, outperform in sideways markets, outperform (at the least, lose less, maybe make money) in down markets. A combo of intraday trades and "swings." Use MUCH smaller sizes with the XIV so I suppose it's more candy money. I try and keep total inventories small enough to not use stop losses (except for gradually moving profit stops up as prices rise.)

    The metrics ... well to be honest, it's more about my perception of the overall market posture and bias, along with index "support" areas that I use for guesstimates to scale in slowly after sell-offs, avoiding buying during apparent panic selling. I then scale out into strength.

    I think that most indicators, sentiment, MA's, chart patterns etc, are used to try and assign a level of precision/predictability to the stock market that does not exist. That's it in a very simplified nutshell ... it helps to have some capital to use this approach.
    Jul 18, 2015. 09:18 PM | 3 Likes Like |Link to Comment
  • The #1 Stock In The World [View article]
    I have a library Kindle copy of Hitch-22 waiting for me. Thanks for that post of his Chris (though difficult to read) and the pointer to his other stuff, Allan.

    I am fully in the camp -- though I have minimal experience with it -- of managing risk with XIV via small (with XIV, small is VERY SMALL) position sizing and scaling in and out, but that's how I manage most risk. I hate stops because the price -- in indexes anyway -- ALMOST ALWAYS comes back to your original buy point, eventually. Difficult to ascertain and challenging to patience but it seems that you are better off waiting until after sell-offs to buy. :)

    I "enjoyed" watching that 17% drop in XIV the other week, while holding 100 shares, my first relatively big (temporary) loss with it, which I added to (a guess) somewhere near that bottom of 38 or so, though holding 200 shares almost seemed too much, even for a several hundred K portfolio.

    And yes, during a "Black Swan" it would be very unpleasant to hold any, but all positions get hurt badly, not just XIV. Just keep your total inventory at a # no greater than you can afford to lose all of.

    It seems to be a great vehicle to trade actively, to convert market power into energy/money, though with too much screen time. But I don't have enough confidence in our species and/or global leadership to just hold it for long periods of time, even though I (sort of) understand the theory behind that.
    Jul 17, 2015. 08:40 AM | 3 Likes Like |Link to Comment
  • VXX: Investing (Short) In Volatility [View article]
    Thanks Roger, will keep my eye on the basis risk. Have only been watching XIV for about a month but have looked at the limited historical charts. Watching it on a daily basis over time will give me a better idea of how it and the VXX moves short term, together.
    Jul 11, 2015. 10:07 PM | Likes Like |Link to Comment
  • VXX: Investing (Short) In Volatility [View article]
    Great level of detail, which makes my head hurt, trying to fully understand; thanks.

    re XIV - "which annualizes to under-performance of about 5% per year"

    I am just getting acquainted with XIV but that 5% per year seems a drop in the bucket when factoring in how much that thing moves and the advantage of being able to have less cash-at-risk when employing it long. As a short term trading vehicle, buying XIV after dips in SMALL scales and selling in scales into strength, XIV seems to be a great short term trading vehicle to me, slight underperformance or no.
    Jul 11, 2015. 07:37 AM | 4 Likes Like |Link to Comment
  • The #1 Stock In The World [View article]
    After looking into XIV a bit more, it seems to be the perfect active (day and swing) trading "stock."

    - it has big liquidity
    - it moves anyway, a lot
    - therefore, less cash-at-risk is needed to turn a decent profit
    - it can go up in a sideways, low movement market
    - generally, scale in long after weakness (lots of nuance needed though) and scale out into strength. Manage risk by keeping a very conservative max position, no stops

    More "screen time" than you would like but, you could watch it out of the corner of your eye while doing something more productive. Setting auto buy levels not so great because you don't want to be buying into SERIOUS/panic selling.

    Holding a bunch of it during a real sell-off would be very unpleasant.

    Use Interactive brokers and buy up to 200 shares for $1 commission

    Not a bad way to go.
    Jun 28, 2015. 08:38 AM | 1 Like Like |Link to Comment
  • The #1 Stock In The World [View article]
    Thanks Marc
    Jun 12, 2015. 12:50 PM | Likes Like |Link to Comment
  • The #1 Stock In The World [View article]
    I've been actively trading for 15 years and I can't believe I never really checked this out. I hate risk -- ironically -- and so this seems to be the perfect vehicle for my active style of buying the indexes (unless Russia formally invades the Ukraine) in scales, after weakness, up to some conservative total, scaling out later, into strength. XIV moves very well, often effectively mimicking a 2/3X ETF and so it also fulfills one of my requirements - less cash-at-risk needed to turn a decent profit. Going up in a sideways market is joyful.

    It's obvious from looking at the charts that it's not something I want to load up on and just keep my fingers crossed but it should work as well as anything for what I am doing.

    And so, Chris, what is your favorite charitable organization that I can funnel some of my profits to?

    Thank you for this. - Mike
    Jun 12, 2015. 12:06 PM | Likes Like |Link to Comment
  • What Just Happened In The U.S. Treasury Market? And Does Bill Gross Have A Crystal Ball? [View article]
    Bill Gross does have a crystal ball but it's all scratched and dirty and murky and you can't really see anything in it except that he says that he does because he needs the publicity for his funds and media output. And then there are the piggyback SA articles, looking for page hits/advertising revenue. Got me.

    Or at least, that's what I have noticed.
    May 8, 2015. 09:56 PM | Likes Like |Link to Comment
  • Netflix: Street Applauds Disastrous Financial Results [View article]
    J - yes, but in the short run, he can have quite an impact. Longer term, a non-factor. I remember him from the old days, when he was actually the anti-media guy. HA!
    Apr 16, 2015. 08:31 AM | Likes Like |Link to Comment
  • Netflix: Street Applauds Disastrous Financial Results [View article]
    I have rarely traded NFLX but of course, have always been amazed at its stock performance, which is largely due to the fact that so many people use it (like AMZN.) Me, after a few rounds of subscribing to streaming, We realized that once we got past the documentaries we wanted to watch, the content was pretty crappy. Lot's of people apparently don't agree with that and they are still signing people up, around the world. I use the DVD/Blu Ray rental service.

    You cannot short a stock like this until after it really starts to crack, if you are going to short term trade it; you might be okay if you're doing a smallish longer term short - sell/hold. Their moat doesn't seem wide -- they are Vs. APPL, AMZN, HBO NOW and more to follow, direct streaming subscriptions. The DVD rental business will probably go away at some point. And you do have the fundamental picture with them that you've outlined. But keep in mind also, that Cramer is championing the stock right now. :)
    Apr 16, 2015. 08:20 AM | Likes Like |Link to Comment
  • Priced To Imperfection: Natural Gas Undervalued And Poised To Rally [View article]
    It's "funny"; I have a buy-the-dip/sell the rip in very small scales strategy (so small that I must just be trying to pay my utility bills with it) via UGAZ and I'm currently holding 300 shares from $2.48 and am down $172. But, I haven't added the next 300 shares yet and I'm not sure what I'm waiting for. And yes, I've read all of the bearish production and storage slants ... anyway, thanks.
    Apr 13, 2015. 07:48 PM | 2 Likes Like |Link to Comment