Minyanville is a movie, not a snapshot...
So put me on a highway
And show me a sign
And take it to the limit
One more time
Good morning and welcome back to the critter attack. The bovine crowd roared long and loud after shaking off the minxy Monday reversal of fortune. Led by all-time highs in the trannies and brokers, a quiet confidence returned to
After punting a large portion of my exposure late last week--at levels slightly above where we're currently trading--I've been light and tight and ready to fight. Still, in a subtle yet sterile reminder that nobody is smarter than the market, I was wish-boned a bit yesterday as my (defined risk) shorts (financials) popped and my spate of select longs lagged. I suppose it coulda been worse (some of my previous longs, such as Apple and Intel ended red) but that was then, this is now and it's time to move on.
I opined early this year that I could "see" a strong first half and that remains a viable scenario. As I wrote at the time, the combination of cheap capital, debt "elasticity" and a belief that Boom Boom will keep his paws on the faucet may indeed spur the herd. I'm not currently positioned for a leg higher--I'm still balanced, with some gamma and a bit of alpha (an alpha bit?)--but I've been known to unleash the hounds in the hurry should I sniff an advantageous opportunity. My eyes will be spying the financials (they acted buff yesterday), the internals (single best intraday tell), the Russell (near all-time highs), Google (mind the gap) and our levels (as a framework).
And now, a Word From our Minyans...
"This may be the dumbest question ever. Was there ever a point where you feel that as a trader, you 'understood' the game? Almost like a moment in "The Matrix," where Neo understands what he has? I fully understand the humility factor of the market, but I'm starting to get the kind of results that I only dreamed of years ago - controlled risk, really good gains (up 20% this year with a fully hedged long-short portfolio). Keep the faith, brother, Minyan Ron"
Did you read my interview with Dr. Tom Hanson? Talks bout that zone...
Toddo, good piece--several points stuck.
1) Your point about non-linear thinking (I'm all over that)
2) I'm with you in focusing not on how much I can win, but how much I could lose.
3) The need to define risk (I'm into in the money options)
4) Most important, the winning or losing is just what happens--it's not self-worth.
I know what kind of people are in the MV community, which is why I'm into it.
Best and thanks again,
Perhaps you could address this in your column or mailbag. Scott McNealy had 6,000,000 shares in the summer of 2004. He has been relentlessly selling his stock and sold 2,000,000 shares alone this past February. He is down to 1,300,000 as far as I can see. Probably he keeps getting exercising options or something . Essentially you and all who are buying SUNW are buying the CEO's stock and he apparently is only too happy to oblige. So what are you seeing in SUNW that the CEO cannot see? Thanks, Minyan Bruce."
You touched on the biggest fly in our bovine ointment. I don't know if he's buying a new house or has an expensive honeydew relationship but insider selling--by the top dawg, no less--can't be spun as a positive. I've been long this name since early January--after reading the same content that you did on Minyanville--and we've mapped out our thoughts. I've added to the position recently although, to be fair, I've also left room to buy it lower. While the stock is up over 20% this year, I'm a humble holder until Fish flips his switch.
I am wondering if Warren Buffett was thinking what you are in regards to the US dollar and equities - stocks will be fine, but at the expense of our currency? Maybe that's why he sold protection at these historically low levels of volatility? Would you categorize his put deal as being bullish on equity markets or put it another way, if someone were bearish would they put on this trade? Minyan Jim"
Succo spoke on this yesterday and, as he's the sharpest derivative mind I've ever known, I would give that goose a gander. My take is that, in a vacuum (which I doubt it is) it is bullish but at lower levels. I.E., if he's "put" the underlying (instrument) under the strike, he's effectively buying at x% lower. I used to see alotta these trades being tossed on by big cap tech companies when I was trading derivatives at Morgan Stanley.
At the time, due to a tax loophole, the short premium (sold by the company, if it expired worthless) wasn't taxable income so it was the best of both worlds. Write an option--if you're elected, you own 'em cheaper. If not, you take in tax-free premium. It worked like a charm....until the tech crash stuck a whole lotta stock right in their teeth.
"I have been a long time fan of yours from back in the TSC days. I was really sorry to see you leave the TSC back in 2001. (editors note: we've removed a few sentences because we simply don't "do" acrimony in the 'Ville) I finally decided to Google your name with the hope of finding you writing for another website. This obviously lead me to Minyanville. I have to admit that at first I was not that impressed with Minyanville. It seemed to lack the kind of content that I was used to. However after being a Minyan for a few months, I now find the site indispensable. I just hope others who initially find Minyanville to be different than what they are expecting give it a chance. They will soon find it is an extremely valuable site. Minyan Michael."
Thank you my friend--I often say that Minyanville is a movie, not a snapshot, and it takes a bit of time to get into the rhythm of the critters. I appreciate your 'sticking it out' and would love for you to help spread the word. In fact, we'll set up a gratis trial for everyone in your network (and that's a standing offer to all Minyans). We grow because people "believe," and we truly appreciate each Minyan that does.
Kindly yours and happy trading,
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