frommi

Sell SPY futures with SL on the YH or buy short term SPY puts.

Sold Oracle and RDS.B and bought MDAX puts dec 2014, 16500€ strike.

Made some big changes today. Sold KHOLY. Short TESLA,RH,AMZN. Sold Russel 2000 Futures. I am now at 100% long, 30% short and plan to short more in the next days.

+1! I don`t want to propose asset allocation, but when you study the permanent portfolio construction of Harry Browne you understand how powerful this can be.

@yada you bring on some good points. But shorting is about down side protection for the overall portfolio. I wouldn`t need that when i have only netnets @50% of cash value in my portfolio. But i have only found one that was investable in the last 6 month and that trades now at netcash value. And i could never put more than 2-3% of my hard earned and saved cash into such ideas. So i need a lot of them. I am pretty sure that Buffet had a lot more investable net nets in his time, but nowadays everybody finds them with one mouseclick. But maybe i complain too much and should work harder.

After running a lot of numbers i can only agree. In the current market its much easier to find something that is only worth 10-20% of its price than something that is worth 3x. The forward return on some shorts is a lot higher than on most long investments even when you factor in some growth. Most people underestimate how long it takes until growth will bring the value of something that is worth only 20% to its current price. So its probably a good idea to mix in some shorts. I really changed my mind on this, because the numbers look so compelling. And i think that Prem or Einhorn are not stupid, it looks like this year will be in their favor. And even Schloss has shorted the market in 2000, so its not something a value investor should never do. I think of selling Russel 2000 futures for the summer and going something like 100% long, 80% short because there are some facts like seasonality, the january effect, the presidential cycle and the overvaluation all coming together this year. Only the sentiment is currently not fitting for a crash, perhaps we have one upspike left. Now confront me on that! :)

Oh and when you lower your profit target, you increase your turnover which means a lot more transaction costs.

You can do this, but than you need a probability of profit of >80% to come out ahead in the end. Some investments might go to zero, so the rest has to bring more profits than you lose on your losers. Its much easier with buy @50% of IV and sell at 100% because then every loser is made up by one winner. I am pretty sure that you beat the market even when you are only right 55% of the time. In trading you would normally record all trades and balance your pop (probability of profit) and your profit targets to maximize your return on invested capital.

Margin of safety is too small.

I should perhaps better not post this, but i am bored :D. There is a fourth reason to hold a stock and that is uncertainty in the comparison method between investments. Given that you want to allocate capital to the best possible idea, you have to make a tradeoff when to switch investments. Perhaps you want to switch when the new idea has double the upside of the old one, but allocate new capital to your mathematically best idea. So you hold onto your old investment, but would buy the better idea.

I was obviously wrong here, there are forces that want a war. It looks like some big players in the US (and probably even russia) have a high interest in a destabilized europe where everbody needs more weapons. Its really sad to realize that the weapon industry has such a massive influence on the politicians.

0.1%, its just a gamble with good odds. But i forgot to look at dividend paydates, wednesday is the ex-div date. The last time i did these kind of things was 3 years ago, but i was not very successful doing only this. (Because i was too greedy, let my profits run away and overtrading.)

I don`t know if this was a great idea, but i just bought a lottery ticket. I bought BP 52$ Calls for 0.04 that end on friday next week. When BP rises by 8-10% this is a 100 bagger which is possible when it breaks out through its february top next week. Slowly my old demons are coming through again, but i found this a good risk/reward scenario. Anybody out there who likes to punch me in the face for throwing my money away gambling?

I know a lot of people in here will roll their eyes when they hear the name Timothy Sykes, but he wrote an interesting book about this topic. I just read it for entertainment, its title is "An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund". He describes very good how hard it is to raise capital for a small fund.

Hi frommi - what is your thesis on this? It looked cheap to me, is growing and pays a healthy dividend. I first bought this at 13 and sold 30% @23, thats the part i just rebought because it got hammered pretty hard without reason in the last two weeks. My fair value was around 25$. Its possible that the business model sucks and will be killed in the future, but its not visible in the numbers and i will only sell when i see it there. I think it popped up in a magic formula screener. But i have to admit that i feel really bad for not selling the position completly at 23 and than forgetting about it. Right now i am pretty feared that it collapses completly perhaps thats the reason i bought more. :o

Added to my position in WSTG @ 16$.

I don`t think gold or metals are a good idea at the current prices. http://i57.tinypic.com/vfxro6.png

Wrong thread!

Paderborn, Germany

Thats one of the reasons i have only a very small portion of stocks in the EU. Its just a matter of time that the ECB has to print money or that whole things collapses with people rioting on the street in spain and greece. The situation in these countries has not really improved, but nobody talks about it and the going back to the capital markets in greece was much to early in my view. In some years they have to be bailed out again. And germany has a massive problem with its pension system that will come to the surface in 10-20 years. For me that are enough reasons to avoid the euro zone. But thats probably because i am living here, the grass is always greener somewhere else. :)

Way too kind, original mungerville! :) Thank you very much, Gio Yes, i am sorry. I apologize for my harsh comment.

I was always under the impression that you can learn from the good investors like Kraven, Packer, Nate or Schloss. You could do it when you really would like to, but you just gave up before you tried it and learned nothing in the end. Perhaps an index fund is the right decision for you. :) Why not look exactly what these investors do and imitate it with a small part of your money?

Thats pretty easy. He choose a moving average of 39 weeks why not 20, 40 or 50? Because he has done curve fitting. http://philosophistry.com/notes/the-backtest-fallacy

My experience and numbers tell me that it works where nobody else is doing it, but doesn`t work where everybody else does it. And this makes sense to me because it is a pure alpha thing. But for the global indices you have much too much competition to make correct timing calls consistently. It is like the physical problem with schrödinger's cat, where you change the outcome of the experiment when you look into the box. When too many people see the crash coming, they prevent it by not being invested and investing when the market goes down by 5%.

1. What Berkshire or any other insurance company does with cash has more to do with their need for liquidity for their business then with being liquid when the market falls. It should not guide you what you do in your own portfolio. 2. You can ignore all studies that show that low P/B, low EV/EBIT or smallcap stocks outperform the market or that holding cash dampens returns, but i doubt that you will be able to beat the market without that knowledge and usage. 3. I have never seen a study where you could identify a good manager after the fact is widely known and profiting from it and outperform the market with this knowledge by wide margins. I would bet that you get the same results like investing in the best mutual funds of the last years, and that is severe underperformance. 4. Market timing on a portfolio level doesn`t work, basta. Thats proven ad adsurdum, so why do so much people still do it? (It is not rational.) .... 5. The market will crash next week! :D (But i will still hold 107% stocks!)