OT: how many have been knocked out?

  • Avatar

    Posted: 08 December 2008 01:34 PM

    AFB once had many more participants. I’m wondering how many people have fallen silent because the market has knocked them out?

    Anybody up for a discussion on hedging or exit strategies?

    Signature

    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
  • Avatar

    Posted: 08 December 2008 01:44 PM #1

    I’m sure many got knocked out completely.
    But there are probably more, like my dad, sitting on the sidelines with cash.

    Signature

    “Once we roared like lions for liberty; now we bleat like sheep for security! The solution for America’s problem is not in terms of big government, but it is in big men over whom nobody stands in control but God.”  ?Norman Vincent Peale

         
  • Avatar

    Posted: 08 December 2008 01:56 PM #2

    I should be knocked out but I’m not smart enough to know that.

    Down 80% from my high- brutal is a kind word to describe what I have experienced.
    I have reorganized my strategy, sold some puts and calls in the bad bad days and bought back recently. Up about 20g’s in the past two months.

    I don’t really plan to exit or I would have, right at the crushing bottom.  AAPL may be near flat for some time - or it may take off.  The chance of it touching the 70’s again seems remote….

    The next earnings report is going to the the big signal…

    If one wanted an exit strategy getting out today would be a reasonable one.

    Personally, I am holding stock with some 100 April calls.  I will sell the 130 April call when and if the stock goes to 115.

    What about yourself Eric?

         
  • Avatar

    Posted: 08 December 2008 01:57 PM #3

    Eric Landstrom - 08 December 2008 05:34 PM

    ... I’m wondering how many people have fallen silent because the market has knocked them out

    Those knocked out are on margin especially those on CFD and short-term options.  All others are severely injured.

    Eric Landstrom - 08 December 2008 05:34 PM

    Hedging and exit strategies?

    I reckon you mean for investors because they are a must for traders.  As such, this topic is best to be discussed as a scaling out approach together with a scaling in timing such as AndyZaky’s second buy recommendation thread.  I create one such thread before.  Stop it because like EW thread, mostly talking to myself.

    If I’m still working, I would adopt a modified DCA purchasing approach for the next few years.  Purchasing regularly so long price is below $130 (till zero raspberry).  Scaling out (reverse DCA) when above $160.  Obviously for those severely injured who are not on margin and have been investing with spare money, staying put and begin scaling out from $160 or just trade around your core position is a reasonable approach.

    Disclosure:  My plan is to begin scaling out from $160 for those shares that I originally plan to sell around $210 (miss by $18 :cry:, a miss is as good as a mile) early this year.  This plan is based on EW assessment that AAPL would be in wave X (likely range $160 to $200) follow by a devastating bearish impulse Y that would bring AAPL to as low as 50 (likely range is between $73 to $57).

    [ Edited: 08 December 2008 04:14 PM by Mace ]

    Signature

    Stay Hungry. Stay Foolish.  - Steve Jobs

         
  • Posted: 08 December 2008 01:57 PM #4

    Eric,

    I am interesedt in hearing your thoughts on hedging and exit strategies.

    Thanks.

         
  • Avatar

    Posted: 09 December 2008 06:15 PM #5

    alice - 08 December 2008 05:57 PM

    Eric,

    I am interesedt in hearing your thoughts on hedging and exit strategies.

    Thanks.

    Now that much of the downward momentum has played out and all market segments aren’t in a total free-fall (go to cash or short if that happens again) I have been avoiding buying options because they are stupidly overpriced right now. Instead, I’ve been hedging in classic pairs. For example long oil long airlines. Oil goes down then you’re hedged by airlines going up. Or if you’re long tech, then look at a long position in an untrashort of tech like REW.

    For range bound stocks I also have been taking both a short and long position and playing both ends of the bracket. However, in positions that it is difficult to find the stock to short, then look at an ultrshort ETF.

    Signature

    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
  • Posted: 09 December 2008 06:38 PM #6

    Eric Landstrom - 09 December 2008 10:15 PM
    alice - 08 December 2008 05:57 PM

    Eric,

    I am interesedt in hearing your thoughts on hedging and exit strategies.

    Thanks.

    Now that much of the downward momentum has played out and all market segments aren’t in a total free-fall (go to cash or short if that happens again) I have been avoiding buying options because they are stupidly overpriced right now. Instead, I’ve been hedging in classic pairs. For example long oil long airlines. Oil goes down then you’re hedged by airlines going up. Or if you’re long tech, then look at a long position in an untrashort of tech like REW.

    For range bound stocks I also have been taking both a short and long position and playing both ends of the bracket. However, in positions that it is difficult to find the stock to short, then look at an ultrshort ETF.


    How do you decide on the ratio to hedge?  Is there a rule of thumb or formula to follow?

    Thanks.

         
  • Avatar

    Posted: 09 December 2008 06:49 PM #7

    Eric Landstrom - 09 December 2008 10:15 PM

    I have been avoiding buying options because they are stupidly overpriced right now.

    Options aren’t overpriced. The problem, as you know, is that volatility is ridiculously high. And as long as it stays at this high level, options can be traded.  But to use them as a hedge is very expensive insurance.

    Signature

    “Once we roared like lions for liberty; now we bleat like sheep for security! The solution for America’s problem is not in terms of big government, but it is in big men over whom nobody stands in control but God.”  ?Norman Vincent Peale

         
  • Avatar

    Posted: 09 December 2008 06:50 PM #8

    Still around, just haven’t had much to say.

    Picked up a few more shares around $91

         
  • Avatar

    Posted: 09 December 2008 07:14 PM #9

    Got beat up terribly on 09, 10 OTM options that I bought last spring/summer, portfolio is back to 2003-2004 levels.  Could be worse I suppose.  Still around but not as invested (in either time or money).

         
  • Avatar

    Posted: 09 December 2008 07:18 PM #10

    Mace - 08 December 2008 05:57 PM
    Eric Landstrom - 08 December 2008 05:34 PM

    ... I’m wondering how many people have fallen silent because the market has knocked them out

    Those knocked out are on margin especially those on CFD and short-term options.  All others are severely injured.

    Eric Landstrom - 08 December 2008 05:34 PM

    Hedging and exit strategies?

    I reckon you mean for investors because they are a must for traders.  As such, this topic is best to be discussed as a scaling out approach together with a scaling in timing such as AndyZaky’s second buy recommendation thread.  I create one such thread before.  Stop it because like EW thread, mostly talking to myself.

    If I’m still working, I would adopt a modified DCA purchasing approach for the next few years.  Purchasing regularly so long price is below $130 (till zero raspberry).  Scaling out (reverse DCA) when above $160.  Obviously for those severely injured who are not on margin and have been investing with spare money, staying put and begin scaling out from $160 or just trade around your core position is a reasonable approach.

    Disclosure:  My plan is to begin scaling out from $160 for those shares that I originally plan to sell around $210 (miss by $18 :cry:, a miss is as good as a mile) early this year.  This plan is based on EW assessment that AAPL would be in wave X (likely range $160 to $200) follow by a devastating bearish impulse Y that would bring AAPL to as low as 50 (likely range is between $73 to $57).

    Mace brings up the issue of scaling in and out. In 2007 the AFB board was beating up one of its favorite whipping boys, Jim Cramer, because in one week he said that Apple was going higher and yet he also suggested selling 25% of your AAPL position to lock in profits. Guess what? In hindsight Jim looks like he knew what he was talking about and so does Mace. Mace is very savvy for knowing what his exit strategy is. Somebody pointed out a month or two ago that if he had just sold AAPL three times in the past year he would have made many times his initial investment. In my mind, selling is more important than buying. Anyway, Mace, I like that you have a dollar cost average strategy.

    In accumulation mode I begin by purchasing stock on a dip. I have every intention of trading that position by selling it on the next upswing. However, when I’m scaling in and accumulating a position I do not sell the entire block of stock I purchased. Instead, I sell 95% of my original purchase and retain the remaining 5%. I assign a stop loss to that remaining 5% of stock that is one half of the total profit from selling 95% of stock. This way, if I get stopped out, I get stopped out with a profit.  The 95/5 trade is repeated until I reach the number of shares I wish to hold wherein I’m then free to strafe the market looking for targets of opportunity (which I’m always looking for regardless of whether I’m in accumulation or distribution mode). Once I’ve completed my accumulation, I’m then primed for a swing or position trade.

    Signature

    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
  • Avatar

    Posted: 09 December 2008 07:22 PM #11

    Holding a much smaller position in aapl than I had planned. Bought in the 87’s when aapl hit the skids last week. While hedging by playing around with SKF and then also trading FSLR long and short, I missed the opportunity to buy more as the week wore on. Now, anything over the $94’s is too rich for my blood this time on the aapl merry-go-round. As far as exiting, I’m using the indices as my guage. Watching step by step for S&P to break 920, then 1000 and will take what profits I have when we/if get to S&P 1050 and start to fail.


    It’s just the back and forth (long/short) trading right now. I think I have a couple stocks figured out enough to keep me busy these last weeks of the year. Then I think I will pause and take it all in for the first few weeks of 2009. Jan 8-15th I’ll be in Mexico, so trying to keep out of trouble until then.

    [ Edited: 09 December 2008 07:28 PM by kiwitrader ]      
  • Avatar

    Posted: 09 December 2008 07:32 PM #12

    Eric Landstrom - 08 December 2008 05:34 PM

    AFB once had many more participants. I’m wondering how many people have fallen silent because the market has knocked them out?

    Anybody up for a discussion on hedging or exit strategies?

    I got clobbered like few, after having made money like few; but on net, down from my initial capital from February 2006. I have kept active on AFB, but with less enthusiasm than in the earlier period of my investment career. I have learned more, but also realized that the stock market is a subtle bitch that needs to be approached very carefully, but more important, wisely. Since I do not feel wise, I say little.

    One thing I have learned is that success must be managed. It doesn’t matter how much money has been made on a purchase until the security has been sold and the money taken out of the trading account.

    Signature

    Tightwad.

         
  • Avatar

    Posted: 09 December 2008 07:52 PM #13

    kiwitrader - 09 December 2008 11:22 PM

    Holding a much smaller position in aapl than I had planned. Bought in the 87’s when aapl hit the skids last week. While hedging by playing around with SKF and then also trading FSLR long and short, I missed the opportunity to buy more as the week wore on. Now, anything over the $94’s is too rich for my blood this time on the aapl merry-go-round. As far as exiting, I’m using the indices as my guage. Watching step by step for S&P to break 920, then 1000 and will take what profits I have when we/if get to S&P 1050 and start to fail.


    It’s just the back and forth (long/short) trading right now. I think I have a couple stocks figured out enough to keep me busy these last weeks of the year.

    Kiwi, holding a much smaller position than you think you should is the way I’ve come to learn is the way everybody should be trading. Even in CNBC’s stupid million dollar trading thingy where I can’t intraday trade, can’t short, can’t whatever I’ve only invested 40% of the hypothetical money (up 230,000 on 400,000 BTW) because I’m waiting to scream in with monster money on the day everybody else is freaking out? Why? Experience proofs for me over and over and over that if a trader holds a sizable reserve they will be able to capitalize on the three or four times a year the market has freakish down and updrafts that take place intraday. Buy getting in on an intraday down-draft that then pops 15% later on that day, the reserve of cash outperforms any other long term investment that I’m aware of. Moreover, that sizable stash of cash provides ample peace of mind by allowing the trader to DCA at liberty.

    [ Edited: 09 December 2008 07:56 PM by Eric Landstrom ]

    Signature

    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
  • Avatar

    Posted: 09 December 2008 08:16 PM #14

    frigging disaster 10 bagger the wrong from the peak. what if’d give for a time machine. not much, since i lost it all on aapl.

         
  • Avatar

    Posted: 09 December 2008 08:25 PM #15

    I’m in the Swiss Alps waiting this out. I said scale in from $100 down to $80 in 1/3 tranches months ago. I said BEFORE Q3 earnings, let alone Q4 earnings, stay away from trading this stock short term because it (and the market) are toxic.

    I said go into LEAPS if you need to get into AAPL, because they’re the way to go as the recession-proof nature of the company will make it a long-term winner compared to all others.

    Nothing has changed my mind since August. None of my positions have changed (apart from covering my 2010 $250 and $290 shorts for a killing) and going long some $150 and $170s. And nothing will change my mind until after Q2 2009, when I think the picture will start to change significantly.

    So I’m not so much knocked out, as just silent and sticking to my game plan, having said all I have to say on the matter many months ago (and unfortunately been proven presciently accurate - which gives me no pleasure whatsoever considering the wrecked state of my portfolio).

    I will be more active again soon though.

    After the New Year begins smile

    Signature

    “Waiter waiter I’m not happy with my Zach Bass. Would you serve it on a silver platter with an apple on the side please?”