frommi

Everything mining related in australia. BOL.AX, NWH.AX and CDA.AX were mentioned on some blogs.

Yes. BBBY is a good example, too. But that`s only for the short term, in the long term the fundamentals have to work.

I use Elliottwave analysis and resistance/support levels for entries and exits. EW is very good to find turnaround spots, you just have to remind yourself from time to time that it works on probabilities. It won`t work every time, but from my experience you can roughly time the market in 60-70% of all cases. But don`t believe me, everybody will tell you the opposite. :) My single best pattern in that regard is an ABC-correction (Zigzag) where the length of wave C is roughly the length of wave A. When there is a support near the end of wave C you have the perfect entry point where it is very likely to get a reaction upwards.

Haha, didn`t know it was you! :) Seriously, take a look whats going on in the sell-options-for-income forums. There are lots of sheep to get shaved in the next downmove.

There is a difference between shorting and protecting your portfolio against market moves. Shorting is something where you need a trading style, you can`t let something like CYNK run against you and not cut your losses. That won`t work and can ruin you in days. I would nobody advise to do that without a lot of trading experience. Protection via puts is on a totally different side, you have limited losses and huge possible wins just like buying stocks. That is more like buying insurance. And the good thing about that is that it is cheapest when nobody wants it, but that is most often the time when you need it. Think about the other side of that trade. The one who sold me the puts is running on a very thin line, i would never do that with such low premiums and that huge amount of risk. And when the puts are worthless in the end, i won`t regret buying it because i was protected when i felt i needed it. (You won`t regret buying fire insurance for your house even when it didn`t burn down, do you?)

Don't you insure your house against heavy damage? And now imagine that 80% of all storms happen in the summer and the insurance for that time is a lot cheaper than for the whole year wouldn't you do that kind of deal?

And who says that cheap things can`t get a lot cheaper? I was burned in the past over summer, so my natural instinct tells me to protect myself during that time. It may be irrational or not, but we are living in times where QE is the only reason that markets go up or down. And QE ends this october (cool timing!) and its power is probably already fading. Perhaps i am wrong, but who cares as long as i don`t damage my account? When i miss a big upmove that is ok, as long as i don`t lose money. Think about rule #1.

Bought a small position in FLL in speculation that the weather in Q2 was better than in Q1.

I still hold my puts since the start of june, beta adjusted i am flat (but long volatility and value). I was net short at the start of june, but that was crazy and something i will not do again, i paid the price for that during june.

http://www.newyorker.com/online/blogs/currency/2014/06/could-argentina-default-on-its-debt.html Argentina default around the corner? This article makes me think they have no other choice.

Tangible bookvalue (look at 10y history) and that Buffet and Third Avenue have positions there. There is a PKX thread in the investment sections with further arguments. And from a technical viewpoint there is a solid support at 60-65$, thats unlikely to break.

Anything specific made you sell ALS? Margin of safety is a lot higher in PKX and i didn`t really like the news gamble. But i wish everyone good luck with ALS.

Switched ALS.TO+cash to PKX. Looks really good, PKX is now my biggest bet after BP.

http://www.bloomberg.com/news/2014-02-25/rajoy-to-cut-income-tax-saying-spain-s-sacrifices-bearing-fruit.html http://www.nytimes.com/2014/06/21/business/international/spain-stepping-back-from-austerity-plans-to-cut-taxes.html?_r=0 Looks like an end to austerity in europe is coming. My brain says the € is on a declining path with positive long term implications for europes businesses.

If i come up with an idea i first look at the 10y overview of the business numbers. If i like what i see, it mostly depends on where the idea comes from. When its a clone from Buffet or Prem i rarely read a business report or SEC filing, because i doubt that i find something that they have not. Only with my own ideas i start reading annual reports, news headlines and search for articles to get a feeling what is going on with the company. When i am comfortable with the idea i put it on my watchlist where i track the company and the projected annual forward rate of return, that gets automatically updated when the price changes. I always sort them by my fror and then look at the charts of the ideas with greater than 20% return and compare them with what is in my portfolio. When there is an idea on my watchlist with double the return of the worst stock in my portfolio i search for an entry point and make a switch. (The last point is theory, in praxis i switch more often and use technical analysis to find good switching points.) I still make a lot of mistakes, but i write them down to avoid making the same mistakes a second time. (That was the last addition to my process.)

Did he steal your avatar? hahaha No problem, it was time for a new one :)

http://www.wikihow.com/Think-and-Act-Like-a-Player-(Playa)

Its hard to buy puts on these stocks when you expect inflation to come. :D But the idea is not that bad, perhaps i should look at overvalued quality stocks like CL, CPB or HSY. But i doubt that the puts are cheaper than the SPY puts. (Just checked, no they are not cheaper.)

Looks like today is your day! I am a shameless cloner, copied you and shorted the day highs :D.

Long puts when insurance is cheap. Shorting the index is emotionally a problem, i would rather sell all my holdings and go to 100% cash than to do it again :). In those two weeks i tried it more than half the time my longs and my shorts ran against me. So that gave me more volatility instead of less. And with a basket of shorts on overvalued stocks you have the same problem and a lot higher borrowing costs. Short calls can get you into the same emotional traps when you don`t hold the underlying and when implied volatility is low, the premiums are not worth it. With puts your "problem" gets smaller in case you didn`t need the insurance, its a lot easier to hold onto the insurance. But its possible that this is only a personal thing. I would love to find a lot of overvalued stocks with implied volatilites below 20 but i have not found any. In the end i hedge with small positions in LEAP puts on BBH and SPY.

I don`t think that its possible to outperform the market without research. Its just not the same research a value investor would do. Read this to understand: http://www.aqrindex.com/resources/docs/pdf/news/news_case_for_momentum.pdf Its just that a long only momentum investor will get hit hard in a bearmarket. The momentum premium in a bull market is stronger than the value premium, so its possible to outperform more with a momentum strategy than with a pure value strategy during that time.

After feeling a lot of pain with a long/short portfolio in the last week i give it up, its just not for me. I covered all shorts, i just hold onto bbh and mdax put options as protection. I put this into lesson learned category which has cost me my outperformance of the first 5 months. So if i will ever short again i will only do it with small put positions. Nevertheless i raised my cash level a bit, sold CHL, DLR, WSTG,BACHY and OHI and bought ALS.TO and VZ. I am really trading too much, but i am constantly in fear of losing my gains. Really weird, i need a psychologist. ::)

Looks like a momentum investor. In bull markets its probably pretty easy to outperform, but if he hadn`t this godsent idea to stay out of the market in 2008 he probably would have lost most of his outperformance/networth in that year. I am still thinking that its not a bad idea to combine momentum and value investing.

But its worth reading when you know nothing about timing and want to expand your horizon :). Its just useless without the others.

1. "Mastering Elliott Wave: Presenting the Neely Method: The First Scientific, Objective Approach to Market Forecasting with the Elliott Wave Theory", G.Neely 2. "Snowball", A. Schroeder 3. "The Intelligent Investor", B. Graham 4. "Quantitative value investing", Gray & Carlisle 5. "Antifragility", N. Taleb My biggest mistake was only reading book 1) and then nothing for 5 years. Without 2) i would have never read 3). After 3) i`ve read nearly every value investing book out there, so don`t know if they have really added something to 3) except 4).