Stocks and Trading Thread - Channeling your inner Mono

[alfred russel]

Yes, Best Buy stores are truly unpleasant, I don't know how they stay in business.  Those warranties they hang on unsuspecting rubes must be made of pure profit.

I buy those warranties. 

In general, I usually turn them down. But for some reason where I live I blow out my modems almost every 12-18 months. Now I get the warranties for $10, and by the time the modem blows out it is no longer carried and I get whatever is in the rough price range of the store (hence a modem upgrade). I do have to keep paying the $10 though. And eventually the joke will be on me when Best Buy goes belly up and I have a worthless $10 warranty.

[DGuller]

Yes, Best Buy stores are truly unpleasant, I don't know how they stay in business.  Those warranties they hang on unsuspecting rubes must be made of pure profit.

I buy those warranties. 

In general, I usually turn them down. But for some reason where I live I blow out my modems almost every 12-18 months. Now I get the warranties for $10, and by the time the modem blows out it is no longer carried and I get whatever is in the rough price range of the store (hence a modem upgrade). I do have to keep paying the $10 though. And eventually the joke will be on me when Best Buy goes belly up and I have a worthless $10 warranty.

Well, my statement was too sweeping.  If you can adverse select warranties well enough, there is no reason to not buy them.  Seems like you're doing a good job sticking it to the insurance companies, so well done there.

In general, though, getting a warranty is just wasting money, the profit margins are humongous on them.

[Ed Anger]

IBM 188.25 +4.60‎ (2.50%‎)

[MadImmortalMan]

IBM 188.25 +4.60‎ (2.50%‎)

That's a big weight in the Dow. It'll be hard for the market to not gap up in the morning.

[Ed Anger]

Last I looked, it was up over 5 in the after market.

[Tamas]

Apple missed earnings expectations

Steve Jobs can only die once, apparently.

[MadImmortalMan]

Netflix and BWLD failed badly too. We'll be down in the am. I have a straddle with a 700 dollar crossover on. (I had puts while the market was going down and bought offsetting calls when it bottomed out and I had a 700 dollar gain).  That was before AAPL announced. They are down 30 bucks in after hours, and that's gonna kill the Nasdaq, as well as lots of other things. The strange thing is, the Fed leaked rumors about considering more QE and AAPL still destroyed the bump from that.


I seriously think more QE will have diminishing returns. The more we do it the less it matters. Especially if Europe and Japan are doing it too.

[DGuller]

Apple missed earnings expectations

Steve Jobs can only die once, apparently.

Once is enough.

[MadImmortalMan]

And the lawsuits over LIBOR are starting to roll in. Blackrock and Fidelity are suing Citi and JPM and PIMCO has jumped on the bandwagon in BR's suit against BofA.

I'm still holding puts on JPM, which are not profitable at the moment.

[DGuller]

Yeah, that LIBOR shit is going to be really nasty.  You can't really have banks compensate the victims, because banks can't can't claw back the gains from the counter-parties who profited from the fixing.  However, you can't just do nothing either.  I'll be damned if I knew how to square that circle.

[Tamas]

heh, european stocks rally on Draghi pledging to save Euro no matter what.

that's it. Now that was some NEWSFLASH. What a bunch of nerve-wrecks

[MadImmortalMan]

heh, european stocks rally on Draghi pledging to save Euro no matter what.

that's it. Now that was some NEWSFLASH. What a bunch of nerve-wrecks

The next statement from the German government will bring us back to Earth. 

[Tamas]

heh, european stocks rally on Draghi pledging to save Euro no matter what.

that's it. Now that was some NEWSFLASH. What a bunch of nerve-wrecks

The next statement from the German government will bring us back to Earth. 

Damn this shit. I had such a good month. Not in absolute money terms, but how I consistently made good calls (that often being staying the fuck out of things), and with baby steps I was recovering my lost funds. Then I go mental over today and lose back like more than half of last month's gain. Because I just couldn't STOMACH seeing that we rally the fuck up just because a mostly powerless figure tells us that "I am going to do my job".

P.S. yeah I know, market was oversold and shit. But I just couldn't take it. I had to fight it on principle.

[MadImmortalMan]

You gotta calm down. 

Most of the time, the best thing to do really is nothing. Getting scared makes people do stupid stuff. You will lose on trades all the time. ALL the time. Just don't let it bother you.

Here's Larry Williams:

It is an Inconvenient Truth...

A word about blowouts and babbling brooks; if you're going to trade commodities, or stocks, you better look this one directly in the eyes.



What I'm about to tell you is the one thing brokers and advisors don't impress upon you and always gloss over. Thus when it happens, you do not have the correct response.

Here's the inconvenient truth...

Anyone who has ever traded has had losses. This means you will have losses. This means you will have lots of losses. Are you really prepared to deal with that?

I don't think so. There's nobody in this game that really tells you about it or explains and places any emphasis at all on the fact that you're going to get burned in this business.

That's why today I want to discuss this with you.

Again, make note, there are no two ways about it; you will lose money trading. That doesn't mean you have to lose all your money trading, but it means you will go through losing time periods, have losing streaks, and at times will have an undue amount of pressure working upon your psyche.

So how do you deal with that?

I really don't know, because I really don't know you. But I can tell you a few things about myself that we probably share in common. These are things I've also discussed with other traders, and we have developed a commonality of how we approach losing.

To begin with, just the idea that you understand you're going to lose will make you a much better trader. I say that because if you know you have a high probability of losing on your next trade you're going to protect yourself. You'll have protective stop losses, and you'll never bet big thanks to your fear of losing. In other words, fear is a great thing in this business.

Losing trades and losing streaks can drain one emotionally as well as financially. Because of that you need a mindset to approach losses. I want to make certain losing streaks don't turn into blowouts for you. I have techniques that can overcome this.

Here's one of mine.

I don't know of any business that doesn't have losses. The grocery store has to throw out milk they couldn't sell that went stale. The local haberdasher cannot sell all of the men's suits or shoes, so he marks them down until they are below his cost. He understands he is going to take a loss, but he has no other choice. That's part of business.

Small business or large business, it's all the same. At some point they have losses. Look at Starbucks and the huge cut back they had to make because of losing stores.

This can be so draining... not only are you losing money, but you are not succeeding. You're failing at what you want to do and that can be very hard. Failure causes dejection, which causes more failure, leading to a circular downfall.

One thing I learned years ago, and it has meant a great deal to me, is this little slogan;

"I will have my losses, but they will not have me."

I have seen very successful people come into this business of trading, have a string of losses and then get confused and lose it all. They think they are, essentially, their losses. They see no way out. Of course, with that mindset, there really isn't.

This means you cannot dwell on your losses. They are of your past; they are water under the bridge. You can study your past trades to see what you did wrong. But you cannot let the losses pull you down like some anchor holding a boat from drifting free.

That gets us right back to understanding that we will have losses. Once you understand that, thoroughly internalized, then you realize it's just part of the game. You are prepared for the future. So when that happens you can let losses go under your emotional bridge, just like so much water coming down a babbling brook.

The only true statement I have ever learned from the government is that past performance is no guarantee or assurance of future performance. That is an absolute. It is like the law of gravity.

Which means your past failures are no indication in any way whatsoever of your future successes.

[Tamas]

good one, thanks