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Random Thoughts: IndyMac Deposit Concerns

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Perception is reality on Wall Street.

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  • I've taken off the quick downside schnitz in American Express (AXP) as it failed into the $40 level. Just trading and keeping my powder dry.

  • That smoke you smell is the friction between opinions.

  • On the one hand, you've got "markets are a leading indicator, we saw capitulation in the financials and this is a healthy retest before a resumption of the mean-reverting rally."

  • On the other, you've got "the Fed can save Fannie (FNM) and Freddie (FRE)--their debt, at least--but the dike has many more holes."

  • The fact that reality is a fluid, multi-linear target isn't making the distinction any easier.

  • A guaranteed smile on a drabby, dark day!


Minyan Mailbag

Toddo,

You've mentioned the best trade ever scenario (if you had held the Wachovia (WB) calls) and the hot-hand theory.

As much as I use Minyanville for the Buzz, I attempt to understand the psychology and nuances that go into a trade, but the question is what follows beyond that. After making your best trade ever, presumably you seek to improve on that.

My question then is "After making your best trade ever, or have a hot hand, then what?"

It may all boil down to discipline over conviction and sticking to the rules but I was curious if a more detailed response was out there.

I know you've written previously about one of your worst trades; I'm curious how you act in light of your best. I know you don't parade around when you make a good call, this is more to the question of "what next?"

Thanks in advance,
Minyan James


MJ,

There's no set formula as one of our Ten Trading Commandments is to adapt your style to the market.

As discussed yesterday, stylistic approach varies as a function of field position (among other elements). Case in point, while I "scaled into" the financials into the abyss last week, I traded the sector long this past Tuesday with tight stops below.

Same game, different rules but the mechanics of the swing often define the results of the at-bat.

Happy trading.
Toddo

Answers I Really Wanna Know…


R.P.

Position in LEH

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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