Stock trading update

June 7, 2009 at 3:59 pm (Money & Investing)

I think I may have actually started to figure this out, and am having better success at it, though I certainly still have a (long) ways to go before I break even on my losses from the last year and a half that I’ve been doing it.
I’ve got some factors that I look for that at least when testing on historic chart sites like (a site that gives you an old chart day by day, which can can flip through in sequence to test your ideas rather than having to wait a full 24 hours like in “live” market simulators) have a very high success rate, and that I’ve had some “real life” success with until issues with North Korea and GM ended up screwing me back over a couple of weeks ago.
However, GM is no longer even on the market, so hopefully that kind of crap will help, and political junk has been pretty quiet lately. Hopefully this will give me a chance to catch back up.


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A cool site for finding a credit card

April 5, 2009 at 2:13 pm (Money & Investing)

So as I mentioned a short while back I’m shopping around for a new credit card, since the WaMu cash rewards card I was very happy with got taken over by Chase, who promptly removed the cash reward and hiked up the interest rate. Bastards.
The program they have me on now has the shitty “points reward” program, which if you try to translate it into cash (cash is one of the options you can “buy” with your points), is worth about 1/4 of what the cash reward was I had on my old card.

So anyway, while doing a little web-surfing today I ran across a web site called Know Before You Apply – it’s a cool little site where you just give it your name, address, and the last four of your social, and it goes out, takes a peek at your credit score, grades it and lists what credit card you qualify for; if you want it will also let you narrow it down by bank, type (Visa, Discover, etc), or reward program.

Using it I found the card I will probably end up going with, the Discover More card, which gives 1% cash back on all purchases, plus an additional 5% cash back on categories that change every few months, such as groceries, gas, clothing, home improvement, hotels, movies, etc etc.
And since I seriously pay for everything with my credit card (about the only exceptions are the little couple-of-dollar transactions here and there such as buying fast food, etc) the bit of cash back every month from doing that is a nice deal.

[Edit 04-06: Yeah, they turned me down, even though I rated a “B+” for my score and last I checked my FICO was in the mid-700’s. Unfortunately though even though my credit is the best it’s been ever, it still has the word “bankruptcy” on it, and will continue to do so until partway into 2012.]

Actually Discover has several interesting programs to choose from – the only thing I’m not liking about it is that it’s not a Visa or MasterCard – although I’m sure most major companies deal with Discover (and I checked, you can use it with PayPal), I’d probably want to still keep a Visa or MC in my wallet along with it just in case.

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Thanks, Chase – time to find a new credit card

March 19, 2009 at 10:20 pm (Money & Investing)

I’ve had a credit card from Washington Mutual for a number of years now that I’ve bought everything with, and I really mean damned near everything, about the only thing that doesn’t go on it is stuff like fast food restaurants and vending machines.
It had a decent interest rate (at least for someone with slightly tarnished credit) of about 9% and a cash back program that rocked, because I’ve always completely paid the card off every single month (thus no finance charges), and every few months they’d cut me a check for a couple of hundred bucks, free cash.

Well – “WaMu” got bought out by Chase last year during the first onslaught of bank closings – and they finally got around to changing the credit cards over.

And, without bothering to tell me or anything handy like that, I noticed on the web site my interest rate suddenly went up to 11%, and I no longer have a cash back program. It’s now under Chase’s shitty “reward points” program, which I couldn’t give a rat’s ass about. It does give you the option to cash them in towards credit on your account – but at about 1/4 of the value I was getting before. The $150+ I had sitting in my rewards account last month has vanished, and now I’m eligible for a whopping $25 credit on my account. Thanks Chase! Kiss my ass!

Time to start looking to see if I can get another cash-back rewards card instead.

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Another sign that FAS & the market is mocking me

March 18, 2009 at 6:20 am (Money & Investing)

So that ETF equity called FAS that I went on a rant about in my last post after my “trying to be safe” stop kicked me out waaaaay to early causing me to miss out –
Yeah, guess how much that stock went up after I got kicked out of it too early taking a loss. C’mon, guess.
Nope – that SOB went up 150% since last Wednesday. 150%.
I seriously could just about cry.
My $1000 investment should have turned into about $2500 in the course of a single week. Should have.
That is so damned frustrating – that I obviously knew when to get in… I just didn’t do it right.

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Fuck you, FAS, fuck you.

March 11, 2009 at 8:06 am (Money & Investing)

As a lot of my readers know I like to tinker in the stock market. I make a little bit here, lose a little bit there, and overall have been trending slowly downwards in hopes that it will teach me to be be better at it so I can make some good money.

Today I feel absolutely fucked over and violated though.
FAS was absolutely poised to make me some good cash today. All the signs pointed to it going up. It’s an ETF fund that revolves around banking, and banks, especially Citi, have started posting actual profits for this year.
So I bought it this morning at $4.11 per share, 214 shares. And told TradeKing to automatically set a stop at $3.80 in case something backfires and another bad news reports comes out or something – that way if it suddenly bombs, I won’t lose any more than that.

*however*, less than 10 minutes after the purchase, it dropped to exactly $3.80, and then jumped right back up again. It triggered my stop, causing me to lose 8% on a day when I should be making a fucking killing.
In retrospect I probably set the stop too tight – I knew this fund jumped all over the place, I just didn’t expect it to do it *that* badly.
Thankfully I’m playing with so little money right now that 8% was less than $80, but still, that’s a pretty big blow, and will make it all that much harder to catch back up again, and since this “rally” with FAS will probably be short lived, I’ll miss out on the whole thing since I can’t trade again until Monday.

Fuck you, FAS. Fuck you.

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Jon Stewart goes off on investing “experts” at CNBC`

March 9, 2009 at 7:00 am (Money & Investing)

More reason why more and more people are deciding that the best person to decide what to do with your money is: you.

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Actually made a profit in the market today

February 11, 2009 at 5:41 pm (Money & Investing)

Go me! $40 for a few mouse clicks!

Now to just see if I can repeat the performance in the future 😛

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Today’s stock update: near heart-attack moment

December 23, 2008 at 8:20 pm (Money & Investing)

For just under 20 days now (which is a record for me for holding onto one stock purchase) I’ve had stock in a couple of the ProShares UltraShort ETF funds, which in a nutshell are the funds I talked about about a month-ish back that increase in value the worse the market as a whole does. I’ve been holding onto the two funds I own because they’ve been fluctuating back and forth almost daily between being a little positive and being a little negative, completely failing to fall into the patterns they had stayed in for weeks before I decided to go ahead and buy betting on those patterns. However, the bad news still abounds, so these were lined up to still increase in value over the weeks as more and more bad news about the economy comes out.
So I was pretty comfortable, every morning checking my little portfolio to see how much they had gained or lost in value the day before.
To wake up this morning to this:

BAM! Literally overnight, DXD dropped in value over 20%! Holy crap!!

MarketWatch, my usual source for stock market news, had not even a peep to say about what may have happened.
I actually had to ask around, and around afternoon-ish finally got an explaination, and was able to release a sigh of relief – I didn’t just lose a crapload of money overnight after all.

Apparently the fund is required to periodically distribute profits out to the shareholders in a “capital gains distribution,” which is similar to a dividend payment. Difference on my end is that dividends are usually less than a couple of bucks per share – usually much less.
In this case, they’re paying out $16 per share to the shareholders – and then removed that $16 of value from the price of the stock. So I’ll probably have that money back within a couple of weeks at most, and will probably stick it right back into the fund again, which is annoying, but at least I’m no longer in shock.

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Stock Market: Giving Up. Again.

November 26, 2008 at 12:29 pm (Money & Investing)

Yup, no matter what I do, I get screwed. Even on days that should be a sure thing I get screwed. Take today – there were a *ton* of economic reports released today, all of which were negative – so I figure hey, it’s a good time to bet that the market will go down!
But – I forgot to take into account that no matter what I do, the market will do whatever makes me lose money. So, instead of the market going down with all the bad news, it went up!
Yup, apparently because I bet on it going down, the entire stock market got together and decided that regardless of the bad news, it was a good time to buy a bunch of stock.
For f*** sake. This randomness is making me pull my hair out, and I give up, at least until the volatility quiets down, which will probably be months down the road.

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Stock Investing: A New Strategy

November 15, 2008 at 1:58 pm (Money & Investing)

OK, so as some of you know, somewhat early in the year I decided I had enough “non-essential” cash around that I felt comfortable trying my hand at stock market investing.
I knew the economy was shaky, but pundits everywhere were saying that the nosedive was likely at an end, that things should start improving any time, and that there were good investment opportunities out there if you took the time to look. So, I figured I’d look, test the waters, and see what happened.

Well, what happened is I lost a whole crapload of money.
The market would have a good week, all the pundits would go on about how it looked like the bad times may be finally coming to an end, and with hope in my heart I’d buy a stock, thinking it may finally be time for the market to start climbing and for my investment to grow.
Only to have that hope dashed within a matter of a couple of days, when some news report causes the market to crash yet again, making the value of the stock I bought drop like a rock, usually well below what I paid for it.
And this was a pattern that repeated several times over the course of the year.

Now, over that time I have learned a lot. That education was admittedly expensive, but hopefully like any learning it will end up paying off in the long run. Most of these are realizations that finally clicked in just over the last few weeks.

A) The economy is crap, and will continue to be crap for a good while – this is especially true with a new government administration coming into office that is obscure at best and that most investors just plain don’t think have their best interests in mind. Any pundit who is optimistic is full of it.

B) Due to A, making any investment that relies on improving market conditions is a losing bet. The market will, at least once every 2-3 weeks, have a “rally” of positive growth based on some tidbit of good, or even “not as bad as we thought it would be” news. As I did, lots of people buy stocks during these rallies. They will lose their ass when more bad news comes out 1-2 days later.

C) Due to B, the best way to make money in market investing right now is to bet against the market. That being, invest with the assumption that the market will continue tanking, not with the hope that it will start growing again.

How do you do that?
Well, there’s a type of stock transaction you can do that is called “selling short,” which is kind of complicated, but in a nutshell is a process in which you make money by buying a stock in hopes that it will actually lose value. In the inverse of normal stock trading, you actually make money based on how much the stock loses, not how much it gains.
That said, as I mentioned it’s a bit of a complicated process, requires buying on credit, and requires a large amount of money (at least a lot as far as I’m concerned) in your account to do, which is why I haven’t been doing it and had been taking my chances on “hopeful” buys instead.

Well, that ended a few weeks ago with a discovery I wish I had learned about several months ago: the inverse ETF.
These are funds (think something like a mutual fund, where you have another company do a bunch of stock trades in your interest and it all just goes under one account) that do all of the dirty work of short selling for you in the background. Quite simply, as a general rule whenever the markets go down, these funds go up.

As an example about 10 days ago I invested in the ProShares Short Dow30 fund, which is designed to gain profit whenever the Dow index goes down (this is the market index that tracks most of the “big hitters” on the market, such as 3M, AT&T, Boeing, Coca-Cola, Exxon, GE, Intel, and a ton of others).
It works splendidly – as usual, the markets went down over the last 10 days, with slight fluctuations here and there. But in a nutshell by about day 8 or 9 I had already gained a 9%+ profit (at which time I started to really wish I had more money invested so that percentage would equate to more actual cash).
At which point, if I was smart, I would have sold my stock while I was ahead instead of taking my chances. But, I got greedy, and held on, hoping it would go up even higher.
And then…. one of those rare “rallies” I mentioned earlier happened, for no real apparent reason. The market jumped up in value. That meant this fund dropped in value…. and I lost all of the profit I was looking at just hours earlier. The only thing that kept me from losing money is that I had set up a “stop” on the account, indicating that if it were to drop to a point where I would lose money, that it was to automatically sell at that point. It did, and I ended up with a profit of less than 1%.

But… over at TradeKing I was looking through others’ notes on similar trades, and saw that other people were actually making money on these accounts while I wasn’t making a dime… so I started up some conversation to find out what was going on.

Turns out one of the biggest lessons in this confused market is that you can’t allow yourself to get greedy. Look at the history of the fund for the last several months. Notice the highest it got during that time, and absolutely assume it will not go higher than that – that, in fact, it probably won’t even get that high again before dropping. Find a few percentages below that point, and when the stock gets there, sell. Don’t think about it, don’t wonder if it might go higher. Just sell. Using this technique, these guys were raking in 50% profits in a matter of several weeks.

I’ve also learned that when you buy a stock can be just as important as when you sell it. Just because a stock or fund price starts going up doesn’t mean it’s a good time to buy, at least under current conditions.
Most funds right now don’t have steady, predictable gains or losses. They pretty much just fluctuate all over the damned place from day to day. However, what they do that is somewhat predictable is that those fluctuations tend to fall within a certain price range.
For example, here’s a chart of where the prices were at on the Dow fund I was in for the last two months:

Notice that for about the last six weeks, although it has been bouncing around a lot, the bouncing has been mostly constrained between two price lines: the low $70’s, and the high $80’s.
When I bought, it was about halfway between at about $79 per share. However looking at these fluctuations, it probably would have been smarter to wait a little bit and see if the pattern repeats itself, with the fund dropping back down below $75 – this would both give me more “wiggle room” for the fluctuations without worry of losing money, while at the same time giving me a bunch more profit when the fund decides to “top off” in the upper 80’s again, where as stated earlier it would be time sell (for example you can tell the system to automatically sell if the price hits $89).

One more lesson: as the market reacts to news, which is mostly bad, it’s probably a good idea to take note of when financial reports and other such things will be released. And according to this calendar, next week they will be releasing some doozies: the Home Builder’s Index, the Consumer Price Index, the latest jobless claims report, and the quarterly GDP report.
Now, most of that is, of course, expected to be bad. About the only expected positive spot (based on the predictions shown on the calendar link) is the home builder’s index, which I’m surprised to see is expected to actually be in the positive.
With those mixed expectations it’s probably going to be another roller-coaster week next week, so it’ll be even more important to watch the chart for a good time to get in rather than just jump in because “it’ll probably be a bad week, so that fund will probably go up.”

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