once again i said i dont consider this is trading,,, its more so investing,, iam not sure how we got derailed back to trading subject
Do I Need to Hire a Fundamental Analyst?
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once again i said i dont consider this is trading,,, its more so investing,, iam not sure how we got derailed back to trading subject
I started investing in 1988 and taught myself technical analysis (putting prices/volume in a spreadsheet) and didn't know what it was and did OK. I added fundamental analysis in 1989 and did better, and spent the next couple of decades learning extremely rigid fundamental analysis and did great. In 2014 I got my head handed to me when energy markets cratered - best learning experience I ever had.
At the tail end of 2015, I incorporated more "pure" technical analysis into what I was doing and was stunned with the results and over 2016 had to forget everything I knew over the prior decades. If I trade energy, I watch the USO & SPY, If I trade financials, I watch the TSY and SPY and stocks appear to track these directions NO MATTER WHAT I THINK.
Under "lessons learned", would say an understanding of fundamentals goes a long way in understanding whether the market has it right, or over-reacting giving you an edge. You'll never be 100%, which is fine but you'll be smarter than the next guy. I've only been long but respect that others short - but at some point they have to cover, which sets up opportunities. CSX spiked nearly 25% last week on activist related rumors, so the next trade is probably down. I won't short, but someone else will - but I'll pick up shares if they get back to their pre-spike price since the fundamentals for railroad stocks have started to improve.
For divi stocks paying a fat yield, I've found that there are more than a couple that retch on ex divi days, which you can purchase and ride back up to the next ex-divi. If you're patient, you can earn a stock's dividend up to three times a quarter and make a more generous return than buy/hold. Seems that a good trading stock can move 1-2% per week, which doesn't sound like much until you realize it's 50% - 100% annually, and twice that if you're adept at shorting...
Yep, lots to learn.
At the tail end of 2015, I incorporated more "pure" technical analysis into what I was doing and was stunned with the results and over 2016 had to forget everything I knew over the prior decades. If I trade energy, I watch the USO & SPY, If I trade financials, I watch the TSY and SPY and stocks appear to track these directions NO MATTER WHAT I THINK.
Under "lessons learned", would say an understanding of fundamentals goes a long way in understanding whether the market has it right, or over-reacting giving you an edge. You'll never be 100%, which is fine but you'll be smarter than the next guy. I've only been long but respect that others short - but at some point they have to cover, which sets up opportunities. CSX spiked nearly 25% last week on activist related rumors, so the next trade is probably down. I won't short, but someone else will - but I'll pick up shares if they get back to their pre-spike price since the fundamentals for railroad stocks have started to improve.
For divi stocks paying a fat yield, I've found that there are more than a couple that retch on ex divi days, which you can purchase and ride back up to the next ex-divi. If you're patient, you can earn a stock's dividend up to three times a quarter and make a more generous return than buy/hold. Seems that a good trading stock can move 1-2% per week, which doesn't sound like much until you realize it's 50% - 100% annually, and twice that if you're adept at shorting...
Yep, lots to learn.
jim, thank you very much for sharing,, truly helpful and appreciated specially from someone whos been trading much longer than me,,
For divi stocks paying a fat yield, I've found that there are more than a couple that retch on ex divi days, which you can purchase and ride back up to the next ex-divi. If you're patient, you can earn a stock's dividend up to three times a quarter and make a more generous return than buy/hold. Seems that a good trading stock can move 1-2% per week, which doesn't sound like much until you realize it's 50% - 100% annually, and twice that if you're adept at shorting...
whats the timing mechanism here?
whats the timing mechanism here?
DO I NEED TO HIRE A FUNDAMENTAL ANALYST?
my sincere opinion..
Hmm. The problem is that anyone worth hiring isn't going to want to work for you.. probably. I'd take Hatzius. But, I know he wouldn't leave Goldman.
Best to learn the stuff is my opinion.. The fundamental is the WHAT and the technical is the WHEN.
I've tested I don't know how many thousands of "systems" and unless you have a structural edge, most methods will perform best in particular environments. So.. what are the environments that lend to your method.. is what you could be asking.. And, what would be detrimental..
my sincere opinion..
Hmm. The problem is that anyone worth hiring isn't going to want to work for you.. probably. I'd take Hatzius. But, I know he wouldn't leave Goldman.
Best to learn the stuff is my opinion.. The fundamental is the WHAT and the technical is the WHEN.
I've tested I don't know how many thousands of "systems" and unless you have a structural edge, most methods will perform best in particular environments. So.. what are the environments that lend to your method.. is what you could be asking.. And, what would be detrimental..
DO I NEED TO HIRE A FUNDAMENTAL ANALYST?
my sincere opinion..
Hmm. The problem is that anyone worth hiring isn't going to want to work for you.. probably. I'd take Hatzius. But, I know he wouldn't leave Goldman.
Best to learn the stuff is my opinion.. The fundamental is the WHAT and the technical is the WHEN.
I've tested I don't know how many thousands of "systems" and unless you have a structural edge, most methods will perform best in particular environments. So.. what are the environments that lend to your method.. is what you could be asking.. And, what would be detrimental..
u touched upon very critical subjects i would like to ask about,,,
u tested many systems, is it safe to assume ur fully systematic??
structural edge?? can u elaborate please,,,
iam in the phase where the methods and systems iam using are working in particular environment as ur mentioning but iam not yet able to identify that environment or when it occurs or does not,,, however to hedge against it, i trade multiple systems (instruments) 4-8 and i ensure that when the environment starts to change and the system deteriorates (which i wont be aware of till after the fact) the losses dont equal the profits made and thus dont "take back" my profits,,,iam achieving that simply by the win=loss ratio and integrating it in the system ,,,,,your thoughts???
much appreciated
but iam not yet able to identify that environment or when it occurs or does not AT LEAST NOT IN ADVANCE
Just to clarify, I've been investing since 1988, I've been "trading" since 2015.
And to clarify on my CSX example, I'm waiting to buy when the short eventually covers at the retracement point that the stock originally gapped up from - so I'm aware of the fundamentals, but it's a technical entry that I'm looking for.
Now to your message
Not sure what you mean by timing mechanism - I literally watch a stock on ex-divi day to see what price I can catch it at since several funds and some algos will sell, and on some days the stock will go down more than the value of the divi - you mentioned FTR over the course of your thread (see below), which dropped to $3.41 on it's last ex-div day and subsequently traded all the way back to $3.80 (not a bad move for a $0.105 quarterly divi). If you follow this stock, you'll see that this stock can move $0.15 to $0.20 a day on news flow or market gyrations, so daily swings of 5%. In most cases, some of these swings are within a week. Ford (F) has moved between $12.35 and $12.60 (or 2%) a couple of times in the past two weeks - this is a 5% annual divi stock. Had I been patient, would have caught the move to $13+ a couple of times.
On the fundamental side, FTR was supposed to be a home run when they purchased the Verizon FIOS properties in Fl, TX and CA. They issued cheap equity, the deal closed and the transaction was accretive to earnings. They subsequently lost 4% of their customers. They replaced the CFO, reported a disappointing quarter, the street downgraded and the rating agencies piled on. New CFO is a former CFO who was brought in to clean the mess up. So now we have a cautious street and a bi-model distribution of outcomes whether it's a success or not. Divi is safe now, but 12% suggests a 50% cut (since peers trade at 5-6% yield). Might happen, might not. I own some in my IRAs, but it's a great trading stock for the news flow since shorts have to cover (else pay the divi) and longs will "take the chance" given the attractive yield. They could cut the divi, they could also raise the divi. They could also sell themselves (anything for sale at the right price). While I don't have any way to gauge what will happen other than reading earnings press releases, I can trade while I wait. Off the top of my head, the divi is approximately $400MM of their $1B free cash, but their in the process of cost-cutting their way to paying the divi (we'll see). If they cut the divi, the stock might actually go up - if they manage to turn the tide, the stock goes to $7.50 (approximately 6% yield on $0.45 annual divi
As you can decipher, I do look at this puppy.
I read through the entire thread - there's a lot of good input for you. The only other thing I would add is that there isn't much difference in the amount of information you can get on your own or working professionally on Wall Street. Since reg FD (full disclosure) in 2000, all publicly traded companies have to provide the same information to ALL parties. The only potential advantage would be a welcome call to investor relations or the CEO, but even they aren't allowed to front run information to the analyst unless they want to take on the risk of making some big hairy friends in prison. If you want industry information, Finviz and CME have got it - you just have to sleep less and read more!
And to clarify on my CSX example, I'm waiting to buy when the short eventually covers at the retracement point that the stock originally gapped up from - so I'm aware of the fundamentals, but it's a technical entry that I'm looking for.
Now to your message
Not sure what you mean by timing mechanism - I literally watch a stock on ex-divi day to see what price I can catch it at since several funds and some algos will sell, and on some days the stock will go down more than the value of the divi - you mentioned FTR over the course of your thread (see below), which dropped to $3.41 on it's last ex-div day and subsequently traded all the way back to $3.80 (not a bad move for a $0.105 quarterly divi). If you follow this stock, you'll see that this stock can move $0.15 to $0.20 a day on news flow or market gyrations, so daily swings of 5%. In most cases, some of these swings are within a week. Ford (F) has moved between $12.35 and $12.60 (or 2%) a couple of times in the past two weeks - this is a 5% annual divi stock. Had I been patient, would have caught the move to $13+ a couple of times.
On the fundamental side, FTR was supposed to be a home run when they purchased the Verizon FIOS properties in Fl, TX and CA. They issued cheap equity, the deal closed and the transaction was accretive to earnings. They subsequently lost 4% of their customers. They replaced the CFO, reported a disappointing quarter, the street downgraded and the rating agencies piled on. New CFO is a former CFO who was brought in to clean the mess up. So now we have a cautious street and a bi-model distribution of outcomes whether it's a success or not. Divi is safe now, but 12% suggests a 50% cut (since peers trade at 5-6% yield). Might happen, might not. I own some in my IRAs, but it's a great trading stock for the news flow since shorts have to cover (else pay the divi) and longs will "take the chance" given the attractive yield. They could cut the divi, they could also raise the divi. They could also sell themselves (anything for sale at the right price). While I don't have any way to gauge what will happen other than reading earnings press releases, I can trade while I wait. Off the top of my head, the divi is approximately $400MM of their $1B free cash, but their in the process of cost-cutting their way to paying the divi (we'll see). If they cut the divi, the stock might actually go up - if they manage to turn the tide, the stock goes to $7.50 (approximately 6% yield on $0.45 annual divi
As you can decipher, I do look at this puppy.
I read through the entire thread - there's a lot of good input for you. The only other thing I would add is that there isn't much difference in the amount of information you can get on your own or working professionally on Wall Street. Since reg FD (full disclosure) in 2000, all publicly traded companies have to provide the same information to ALL parties. The only potential advantage would be a welcome call to investor relations or the CEO, but even they aren't allowed to front run information to the analyst unless they want to take on the risk of making some big hairy friends in prison. If you want industry information, Finviz and CME have got it - you just have to sleep less and read more!
Thank you jim on all the info, sincerely appreciated
what i meant by my question whats the timing mechanism is whats ur rule or timing on when you buy these stocks to capture the 1-2% move,,, we all know stocks move this much and at the end of the year its 100% or more as u mentioned but we also all know catching every move or even near every move is close to impossible since some of the top traders in the world have hard time maintaining over 20-40% yearly, i believe the percentage could be more for us individual traders and or small funds cuz of liquidity and flexibility, but the point iam asking is with the percent changes above when r u buying and selling, ex div date or near it if i understand correctly??? thats what i was meaning by whats the timing mechanism
thanks
I don't know what timeframes you are talking about. All I was trying to do was encourage you to take on at least the macroeconomic fundamentals... in answering the opening question of the thread. I know some say that all the info is on the chart. It might be ..but sometimes that's too late. And, yea it's probably showed up on another chart somewhere beforehand as warnings.. But, I do encourage you to at least get a good hold of the big picture. That was all I was saying. I honestly think you'd make a better overall trader in the long-run.. in seeking to understand shortages.. supply and demand..etc.. instead of paying someone to do that.
A couple of weeks ago, I read a post where someone said they had an edge that allowed them to buy on certain days at close and hold til the next day. Specifically I think they said home depot or something .. Well if they took most equity products, they'd find it worked the same way.. .and if they did it with say.. futures.. ES .. it would have been less expensive to do. But, what environment have we been in? And, what environment are we moving into? Those are very hard questions to answer.. but we try.. And then someone came after and asked if the same "edge" would work in a bear market. Well.. you can guess..