Brasky in Pajamas

[sillyperson]

I read this and Brasky immediately came to mind.


http://www.thestreet.com/p/rmoney/jimcramerblog/10784726.html?cm_ite=NA&cm_ven=YAHOO&cm_cat=FREE

Somewhere, in some warren or den in some suburb or small city is a player with $1 billion right now who is sitting in his pajamas trying to figure out if this is the day he should break the market.

He's looking at the euro, trying to figure out if it has a shot at breaking $1.22. He's examining the oil futures and wondering if they could get to $75 on inventory numbers, which he figures will be bad -- whatever "bad" is these days. He's doing his charting on the iPath Copper ETN (JJC - commentary - Trade Now) and doing his probability work on whether copper's ever gone up for eight straight days. He's figuring out how horrible housing starts will be and whether the press will play them to be doubly horrible -- pro-UltraShort reporters -- and how negatively the inflation data will be twisted by the media.

And he's thinking -- why not? It's quadruple witching. He can buy out-of-the-money puts on pretty much every double- and triple-short ETF, making it so the sellers of the puts have to short the ETFs to protect themselves. He can come in with $200 million or $300 million in Eminis for sale right after some nasty national number comes out, or maybe when BP (BP - commentary - Trade Now) breaks $30 -- but only after he put position-limit June BP 30 puts, totally unhedgeable for the seller so there will be huge pressure on the stock. And his year is made.

The difficulty will be splitting the profits with all of the other guys in their pajamas looking at the exact same parameters, knowing no more than he does and putting the same plan into action.

So, when you do all of your work on whether it is right to buy the stock of General Mills (GIS - commentary - Trade Now) because you like the Asian build-out, or the stock of Emerson (EMR - commentary - Trade Now) because you think the orders are getting better, or the stock of Oracle (ORCL - commentary - Trade Now) because you think that the quarter's closing strong ... just remember that these guys in the pajamas -- who know NOTHING about stocks -- have all of the cards and can pretty much do whatever they want, have their way, with your General Mills and your Emerson and your Oracle. Until their indicators say they should stop, that is, and then once again, your company's prospects might matter.

The difference is -- these days, they never stop.

[Bill Brasky]

haha,

+1 Denis

The operative phrase here:

... just remember that these guys in the pajamas -- who know NOTHING about stocks -- have all of the cards and can pretty much do whatever they want...   Until their indicators say they should stop...

The difference is -- these days, they never stop.

So fuckin true. 

Y'know...  Especially in light of the BP fiasco, everybody who has two ears and a television is hearing words about quarterly profits, PE ratios, forward earnings, balance sheets, etc etc.  None of that matters.  I don't even listen to it.  At least, in any measure of studious comprehension.

Its all about the indicators.  Momentum, candle patterns, support+resistance levels, you name it.  And thats just 'lil 'ol me, feeling my dumbshit way through the morass.  Reacting, acting. 

But its amazing how these lines come back to haunt you, come into play days and weeks later.  There are so many different indicators I haven't even begun to try yet.  And they are so very valid, it just blows my mind how they play out on the X-Y timeline, I wish I knew some real math and could talk turkey with a captive guru who shares my passion. 

The one that really blew my mind was the Fibonacci stuff.  One could pose the argument that its pre-ordained, since so many people subscribe to the Fibonacci principles there are bound to be reactions at certain levels if one were to know where to intuitively trade against them - which they do.

In any case, the moving averages and Fib lines, directional momentum.  Its just goddamn sick how much money there is to be made by having a healthy appreciation and respect for candle choreography as they play off the popular moving averages. 

Which is why - and some here who have been flummoxed by the market may understand - its getting obscenely difficult to pick a direction.  The market makers are whip-sawing the markets around in unprecedented moves to shake out the weak hands.  There has been a very greatly exaggerated change of style in the last two years or so, coincidentally when many noobs - myself included - tried to begin riding the gravy train. 

They want your money.  They want your "stops" to kick in and flush you out.  The beta has skyrocketed in many stocks, volatility is insane.  Long-term investors should not be invested, I think that day is over permanently - when people could have a normal retirement fund or whatever, and expect their 401k to rise in any sort of reasonable fashion over a period of time, like two decades, how their parents retired.  That'd be fucking crazy now. 

The gold-standard of market investment is officially over.  Your ATT's and Procter+Gambles, traditionally safe plays, are entirely fucked now.  You cannot put $50 a week into it via your company dildo plan and expect to retire with a healthy portfolio.  You just can't.  These are now all instruments of hedging, these so-called safe plays.  These things are where money managers park their wealth for temporary purposes, as they speculate on other things. 

The speculation is where the bastards really rip and roar, which is why NASDAQ went bonkers this year, tech.  And when they get their ass torn out, they vacuum their safer cash out of solid performers, and your boring stuff floats a flat line to pay for their mistakes - and on bad years, you get fucked to the tune of 40%.  At least you know where the bottom is.  (maybe)

Its a joke, even the term "investment" is a fucking joke.  Its not an investment, its a donation.  In the parlance, its called "liquid capital".  By giving money to the market, in investment strategies of any kind - your 401k - you are liquidating the market.  Millions of people, working their jobs, giving into their 401k's, are basically irrigating or liquidating the machinery that gyrates in wild throws and fits of volatility to shake out the capital investor, who gets his ass cleaned.  Your reward is minus forty percent in eighteen months. 

I am up almost a hundred percent since December - and I've made some mistakes.  Blunders that Al Pacino would say HAH! in that way he does.  You can't make mistakes in this market.  You shouldn't be in it, at all.  Its a fuckin rube's game. 

There are profitable windfalls, and some really nice stories in the general market.  Apple,, for instance, taking a nice run.  Bank of America recovering beautifully.  But the past performance does not mean that will continue to perform on this upshot.  They have - generally speaking - returned to their previous positions.  That doesn't mean you can expect them to re-double.

This is, dare I say, you are expecting the impossible.  What happened in the last eighteen months is unprecedented.  Future performance, it is highly unlikely that whatever happened for the last year will continue to happen. 

I would like to see everyone average out of their positions responsibly, take profits as the market rises, in chunks.  Sell a little at 20, another chunk at 22, another chunk at 24, etc.  (thats just a conversational example) feel it out.  Because when we reach the highs of early april, I think its all gonna fall apart. 

[Bill Brasky]

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I'm a humanist.  Maybe the last humanist.

[sillyperson]

it just blows my mind how they play out on the X-Y timeline, I wish I knew some real math and could talk turkey with a captive guru who shares my passion. 

Dude, I got my dual degrees in Chem Engineering and Comp Sci from UW-Madison. I got so much math it's ridiculous. Combinatorics, linear algebra, discrete series (think Fib on acid), holy Jesus.

I'd love to hear your brain-dump for a few hours sometime, preferably while I'm out in the woods whacked off my ass....

when people could have a normal retirement fund or whatever, and expect their 401k to rise in any sort of reasonable fashion over a period of time, like two decades, how their parents retired.  That'd be fucking crazy now. 

Yep. I'm in the process of moving my 401(k) over to EuroPac. Gold is a great retirement investment, IMO... but I'm taking risks, putting those sweet employer-matched dollars into RMB and Loonies.

Apple,, for instance, taking a nice run.  Bank of America recovering beautifully.  But the past performance does not mean that will continue to perform on this upshot. 

Yeah, I was surprised by Apple, too. I don't think they're gonna justify current valuations in a year or three. And -- per the Betas these days -- when it cracks, it's gone.
Investment advisers tellin' soccer moms to do long-term buy-and-hold? Ya gotta be kiddin'... crooks!

Sell a little at 20, another chunk at 22, another chunk at 24, etc.

The numbers were a little smaller, but that's what I did over the last 6-9 months, with your patient guidance.

[sillyperson]

when we reach the highs of early april, I think its all gonna fall apart.  

Sure sign of the coming apocalypse: Boomberg BusinessWeek headline "Leading Economic Index in U.S. Rises in Sign of Lasting Rebound"

Swallow it, suckers. Trust what you read. They have digested the numbers for you.

[yamnuska]

goddard, when you talk about Loonies you're not buying Canadian currency are you? Go with the Swiss Franc. Our crash in real estate is starting, up here we have something called the Canadian Mortgage and Housing Corporation - basically a government backed version of Freddie and Fanny. If you don't have 20% to put down on a house you have to get CMHC insurance, when people lose their house Canadian banks might spend 90 days trying to recover thier costs then they go cap in hand to the CMHC and score their money back, they have no incentive to assess the risk people pose. Our feds outlawed 0 down 40 years and said people needed at least 5% down, now the banks have gone and given people personal lines of credit for the 5% down and 5% cash back when they buy, so people take out the personal loan, buy the house, get cash back and pay the bank back, with interest of course. The world has been going on and on about the "Canadian," model when in fact we are more fucked than any other country, if you take our government debt and add it to personal debt we are the most indebted nation on the planet, worse than the US, worse than Greece, people are clueless.


Sounds like you and Brasky may be sharks,



http://www.amazon.com/Invest-Like-Shark-Limited-Investing/dp/0132213087

good investment strategy, I've never held on to anything longer than 6 months. I've never been up 100% yoy but for the past 4 years I've averaged a 21% return, won't make me rich but it's a good return.