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Minyan Mailbag Grab Bag


Minyanville is definitely a labor of love.


"Toddo, I get confused when you say "respect the action" and then you short into the run in the financials, which are making new highs. Doesn't "respect" mean you should step away and wait for a better setup? Regards, Minyan Franklin .

Minyan Frank,

Certainly a valid question. Yesterday morning, as the market was ramping higher, I posted two Buzzes that highlighted the fact that I was aggressively selling the bulk of my long positions--including my beloved metals and energy--and initiating defined risk shorts in select financials (namely, Citigroup and Goldman). While the set-up in Citi has been discussed often (under resistance at $48), my sense is that you're more curious about my Goldman motivation. A few thoughts, my friend.

First, while I agree that fading (read: selling) may be spitting in the wind with all-time acne unfolding, I'll remind you that the first of our Ten Trading Commandments dictates that we must respect the price action but never defer to it. With the stock up 45% since the October low--into the meat of an inverted yield curve, structural smoke (FNM, GE, DPH) and uber-twisty overbought stochastics as a function of the parabolic frolic, I bought some out-month defined risk downsides. Further, Pepe "Don't call me Clay, seriously, he's my Idol" Depew informs me that GS registered TD-Sequential and TD-Combo sells March 14 on the gap higher. The stock closed below the risk level yesterday (a reaction needs to begin immediately or it would appear something more complex is going on).

So, as I've got a selection of specific longs left, I'm viewing this as a Spedge-part spec, part hedge-and see if it can be its own best trade.

"Toddo, I have been reading you since TSC times, I am a fan and it has been a privilege. Your last post in your Thursday Randoms was a plus in the sense that we all suffer but it doesn't make sense to do it without our friends being able to help and know! In the early days I used to read you for the financial insight but now you have taught us to aim higher. Best Regards, Minyan Rui."

Minyan Rui,

Thanks for the snaps. My girlfriend sometimes calls me "Righteous Man" because she thinks I'm somewhere between a tree hugger and a bleeding heart. While I've hugged trees in my time (read: if you're gonna go trophy hunting, give the critter a glock and even the odds), the only time my heart has bled is when it's been pierced. My first wake up call was in 1998, when my buddy Joel was struck by a car a few feet away from me. In 2001, I lost Ruby and just as the grieving period ended, I watch the fateful events of 9/11 unfold from my perch down the street. And, believe it or not, 2003 made both those years look like a walk in the park as I was a piece of driftwood in the middle of a perfect storm.

They say that something good comes from all things bad and that "something" is perspective. One of life's ironies is that the greatest wisdom is bred as a function of pain and, for better or for worse; I've seen some difficult things in my personal journey. I don't expect sympathy and I know I'm not alone in facing hurdles, but alotta folks lose sight of the important stuff in life as they chase the modern day idolatry. Money may make people rich but balance, perspective and love are the fabric of true wealth. That's why we "go there" in the 'Ville and why we appreciate the fact that Minyans like you "get it."

"Toddo, as a new Minyan, I wanted to introduce myself and say that I love the site. I'm in the early stages of my trading career (27 years old) and I'm trying to soak up everything I can about the markets and trading in general. My goal is to one day have the skills and means to run either my own fund or build my account to where I'm able to trade for a living. I look for guidance and encouragement from traders like you and the others at Minyanville who have had success and I really appreciate all that you do for guys like me.

Is there any advice you can give me as to the best way to utilize all of the information on the site? I've been following the Buzz and Banter commentary and some of the topics and information I understand but at times it can get overwhelming for a newbie like myself. I've been visiting the Buzz Lite part of the website for help. Is this the correct approach I should be taking to the website? Also I've been reading all the commentary about the Minyans in the Mountains 3--this sounds like it would be a really good experience and something I'd definitely be interested in learning more about. Thanks, Minyan Paul

Minyan Paul,

Thanks for the snaps--Minyanville is definitely a labor of love. We re-launched the site in January to improve the user experience. While there are clearly a lot of moving parts to the city of critters, I would suggest keeping the Buzz & Banter application up and running throughout the day. That will be your "Swiss Army Knife" in terms of a center channel and direct you to long form articles as they appear. When the Minx is sleeping, tool around UMV, Minyan Mailbags, and the Professor pages to learn more. And, of course, if you wanna explore the fabric of our community, you can always visit Ruby to read about how we're giving something back to the kids.

As far as MIM3, this will be the truest encapsulation of the Minyanville community to date. We started this a few years ago in Crested Butte, when Scotto Reamer offhandedly suggested that we have a retreat near his ranch in the mountains. With Fields of Dreams resonating in my mind, we build it and, sure enough, 80 Minyans trekked to the mountains. We upped the anti last year, hosting 175 people in Ojai and selling out the entire resort. There, the very best of human capital mingled, noodled, softballed, golfed, barn partied and smiled inside and out as we bridged friendships and co-joined networks. This will be the Sundance of Finance, young man, and I sincerely hope we see you there. Words just don't do it justice.

"Toddo, I just read your post regarding our brother Minyan and his story. As an early reader of yours, also from the TSCM days, this hit me very hard. Todd, your writings on the market along with the rest of the professors are the best on Wall Street. However, where I think Minyanville stands out is within our readership. Your writings on what is really important in life talk to me and remind me everyday how lucky I am. I pray that our brother gets well soon and thanks for sharing his story. I hope all is good with you. Minyan Jeff"

Minyan Jeff,

There's not much I can say to this except "thank you." We're a community predicated on provoking financial thought and hopefully helping you put some jingle in your jeans. However, there is a much bigger trade out there and, as someone who used to be consumed by my bank account and P&L, I'm hopeful that sharing some of my missteps will allow you to avoid them altogether. The only favor I'll ask you--and all Minyans--is to help us spread the word. We're a community that grows organically and if you wanna set your network up with a gratis trial in the city of critters, we can do that. And we would thank you.

"Toddo, Please let me know if Minyans might care about Pedaling for Healthy Hearts.
On May 7th, I will be participating in New York City 's annual Five Borough Bike Tour. As part of my participation, I will be riding in memory of my father who passed away last month and donating to the American Heart Association in his honor. I am asking that you join me by donating to the American Heart Association (AHA). Cardiovascular disease is the No. 1 killer of American men and women. The American Heart Association is a national voluntary health agency whose mission is to reduce disability and death from cardiovascular diseases and stroke. If you wish to also bike with us on May 7th, please visit Bike New York 's website or, if you choose to donate to my efforts, please contact me for further information. Regards, Greg Roberts (aka Fokker)"


Absolutely--anything for you as I know how close you and your dad were. Good luck, and you can count me in for a donation brother.

Toddo, Could you please explain what happened today? I have the Intel Jan 22.50 puts and they are way in the money. Somehow, the puts lost 2/3rds of their value today, going from $3.30 to $1. I went to buy more at $1 but haven't gotten my fill yet. Thanks for the education. Aloha, Minyan BF.


These are almost $3 in the money so the intrinsic value makes a $1 offer impossible. Please let me know if you get filled--and if you do, buy me multiple six figures for my account as well! Chances are that the quote was wrong and, checking, I see 'em looking $3.20 x $3.30.

"Toddo, a good lesson, and a good laugh -at my expense...feel free to warn the Minyans about 'acting too quickly.' When I saw the Intel put at a buck, I went in to buy more contracts at a dollar to see if the quote was legit. In my haste, I used a quick order entry system, where they don't ask "are you sure?" Naturally, I inverted some letters and I am now the proud owner of Jan 22.50 puts for DaimlerChrysler. It only cost me a nickel, the entire trade was 68 bucks. If DCX drops 30 points by Christmas I will consider myself a lucky man. A very inexpensive lesson, but, geez, am I a knucklehead! Thanks for getting back to me so quickly. Aloha, Minyan BF

Minyan BF,

I've had a LOT of trade errors over my sixteen year career and the rule of thumb--written in stone, actually--is to immediately trade out of trade errors and take your lumps. Don't try to trade it--don't try to build it--don't try to rationalize it. If you have unintended risk, remove it from your sheets immediately. Trust me on this; it's simply not worth the headache if a bad situation turns worse.

Good luck today.


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Positions in C, GS
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