Use access key #2 to skip to page content.

I'm charmed! ICE COLD here on Caps and at home ...Volatility is sure fun!

Recs

7

December 22, 2008 – Comments (3) | RELATED TICKERS: DRYS , TBSI.DL

I suppose its par for the course.  From a record ice storm in the Northeast, no power, heavy snow, and record low wind chills, it only figures that today would be the day that I would get the ONE DAY ICE COLD charm here on CAPS.   I'll cherish it forever as yet another learning experience.  I can't even blame it all on my frozen fingers and late nights camping out in my living room in front of the fireplace!  (Smores anyone!)

I'll "wear" my ONE DAY Coldest Player Charm proudly. It looks a little funny next to my 100 in 100 charm, and doesn't have the appeal of the ALL STAR that was there in it's space only this morning.  At least I don't have the Bankruptcy charm yet, maybe next week!  :)

 As a very junior CAPS member, I noted that in the last two weeks, as I went from Propeller Head to 98% and now back down to propeller head that the range from top to bottom here on CAPS must be very narrow indeed.  I had been mulling about blogging on my meager experience with stocks and how the volatility must be playing havoc with the CAPS community veterans, but I see that most are relatively stable.  The top three are bouncing around in a fun manner, but overall, the top one percent of CAPS members aren't shifting around much, (not like the next 98%). Cashing out gains here on CAPS, as with in real life, must help in the long run.

 My thought until I went ICE COLD was how those who have been here awhile must have had to make many decisions on when to close positions (both winning and losing) and I wondered how they did it, espcecially in a recession, where they may have just given a pick the thumbs up a little bit too early as it dove even further than they could have imagined, or had it for a long time at a higher pick price.   I think if I didn't believe in a company anymore that the decision would be obvious, but in this case my worse performers in my CAPs and my real portfolio are some of the ones I believe in the most.   Those few that are near the top scorers for me such as SLW I also still believe in.

On the down side, for example, my experience with DRYSHIPS (DRYS) in my real portfolio, in at $20, out at $15, then in at $12 out at $9  (now staying OUT forever in my real life portfolio) certainly taught me a lot about a volatile market and making things worse with my trading.   Yet, even with DRYS as my lowest performer in my CAPS, I'm not quite ready to let it go.  I have minimal  confidence in its management, but I do believe that it has room to bounce back as Baltic Dry Index (BDI) recovers slightly, credit improves, and infrastructure investment plays in some countries dispense much needed funding.  They have enough ships under long term contracts that despite their debt load and CEO, they should recover.  (Ignoring spinning off their deep rigs).  I still think DRYS will outperform the S&P, even if it takes some time at the $20 range I added it at.  From the standpoint of CAP's I'm tempted to let it ride, but I'm not sure if it's for the right reasons. 

As with most people, (especially males), I hate to quit in a losing position, kind of like saying I'm wrong :), and as ICE COLD Charm shows, I often am, but in this case I still think it's got what it takes to cross back over and above the S&P from where I bite into it. I haven't abandoned shippers, in the meantime, I've moved along in my real portfolio to TBSI.  A US based company that I understand better, with its management buying its own stock and a good play on the infrastructure improvements, when their time does come.  Reinvesting in the future,  a good dividend potential at this entry point both seem like a win to me.  I've taken what I learned about DRYS, continued to educate myself on shipping, and broadened my outlook, but what to do with DRYS here on caps?  I've got a few ideas what I would do with the CEO, but I can't say here in polite company!   

I appreciate all the foolish advice I have gotten here.  I'll continue to plod along; hopefully no one is betting that I'm right!  I think even as a propeller head with a ONE day coldest charm that I'm ahead of Crammer.   We'll check on that if I end up with the 7 DAY coldest charm!!!  In the short run, I think I'll ride it out. My my ICE COLD could be one of my luckiest charms.....at any rate, seems like it's up from here!  :)   From a Top Fool, to the coldest fool, back with the propeller hat, many lessons to glean here!

3 Comments – Post Your Own

#1) On December 22, 2008 at 11:21 PM, GoodVibe4Ever (< 20) wrote:

TSIF,

It’s funny, in a way, that we learn our most cherished lessons from tough or -in your case- cold times. Regarding your question about making decisions to close positions (losers or winners), here's my way.. When I started trading I made sure first to develop set of rules that I follow religiously and I can report to you they saved me a lot of dough and a pile of heartache. Here they are:

1. Don't let your bad trades turn into investments. Allow for a margin of error. When trading, you may trip, but never fall. Ride the winners, try the losers and weed out the laggards.

2. Rationalization has no place in trading. If you put a position on for a catalyst and it passes, take the risk off—win, lose or draw. Good traders know how to make money but great traders know how to take a loss.

3. Hope is not a viable strategy. Hanging on laggards drains precious emotional capital along the way, as well as the unlimited amount of lost opportunity cost associated with tied up funds. Accepting the fact that you will be wrong is crucial. The key to successful trading is not avoiding being wrong but how quickly you can identify you are wrong so you can make a change and reposition yourself.

4. Act when you can and not when you have to. Never let a profit turn to a loss. Always put a stop to every position you take and move your stop according to your game plan.

5. Taking some chips off the table is never a bad idea. Nobody went broke taking a profit.

And last but not least…

6. If you get hit after a poor decision, which result in a loss of capital, you will be zapped of your confidence but it ain't about how hard you get hit, it's about how hard you can get hit and keep moving forward. Pick yourself up. Dark days happen to the best of us, the more enjoyable your journey will be as you find your way to better tomorrows.

Don't Compare Yourself With Others. Keep your expectations in line. Slow and steady wins the race. Trading is a marathon, not a sprint. Trading takes dedication and hard work. Keep learning and honing a style that works for your personality, time frame, and risk profile.

Happy Holidays. See you soon in a warmer place.

GoodVibe
Your Fool in Arms

Report this comment
#2) On December 23, 2008 at 12:04 AM, TSIF (99.96) wrote:

Thank you GoodVibe! That's a lot to digest, but I have time to learn!  I'm still working off of Kenny Rogers know when to hold 'em myself. Lots of good investment advice in that one.  I think I'm getting a few of your "rules" down, but I need more practice. Number's 2 and 3 got put into play the last few weeks and I'm sure will again soon. 

Number 4 & 5 needs some balance with number one. I've used a few stops and then been upset with myself when they kicked in and the stock instantanously bounced back up, but I'm learning to leave margin on the stops and rejoice in the fact that there was some profit in the exchange.

 Number  6 has been tested the last few months and will continue to be, but it's not the rent money and I have recovered (this week anyway) with a slower approach as you suggest. No more chasing a falling knife for me, just dead cat's if they bounce. :)  I let a few postions go this week that similar to DRY's I think will come back, but the resources are needed elsewhere, no need to be tied up.  

 Your number 1 is a mouthful. I think I'll work some more on that one!!!    If you ever perfect that one then please let me know, but then again, without number one, what fun would this be???

 Best of holidays to you as well and thanks again!

Report this comment
#3) On December 23, 2008 at 12:06 AM, TSIF (99.96) wrote:

Thank you GoodVibe! That's a lot to digest, but I have time to learn!  I'm still working off of Kenny Rogers know when to hold 'em myself. Lots of good investment advice in that one.  I think I'm getting a few of your "rules" down, but I need more practice. Number's 2 and 3 got put into play the last few weeks and I'm sure will again soon. 

Number 4 & 5 needs some balance with number one. I've used a few stops and then been upset with myself when they kicked in and the stock instantanously bounced back up, but I'm learning to leave margin on the stops and rejoice in the fact that there was some profit in the exchange.

 Number  6 has been tested the last few months and will continue to be, but it's not the rent money and I have recovered (this week anyway) with a slower approach as you suggest. No more chasing a falling knife for me, just dead cat's if they bounce. :)  I let a few postions go this week that similar to DRY's I think will come back, but the resources are needed elsewhere, no need to be tied up.  

 Your number 1 is a mouthful. I think I'll work some more on that one!!!    If you ever perfect that one then please let me know, but then again, without number one, what fun would this be???

 Best of holidays to you as well and thanks again!

Report this comment

Featured Broker Partners


Advertisement