Random Rants and Market Ideas by Brandonf
- Thread starter Brandonf
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I'm thinking that we are going to be getting a bear bounce here in the market. Bear bounces can be very sharp. Because I do think we are in a bear market I am not going to commit heavily to it, but I am going to be putting a bit of capital to work buying some beaten down stocks that have put in higher lows. Names such as CLB and NUE for example are of interest to me. Keep in mind that although we are getting a bit of a rally, volume is very much lacking. This means that eventually we are likely to test the lows again..that we are rallying on hot air.
Also, this has been a tough qtr for a lot of people, yours truely included. On my equities account I am currently up a measly 2.8%. Now, this is better than a lot of people and I did not lose money which is my first priority..but I get paid based on performance and 2.8% aint enough to keep my wife happy in the long term. Short term its fine and my chart looks great..esp when you put it next to other peoples. I did make my goal keeping a hold of my money when the market got wicked..I did that and now its time to start making profits again with all that preserved capital. I will post my charts tonight as well as do a longer piece. I'm going to talk about why I thinik we have entered into a longer term, cyclical bear market. I'm not a permabear though, there will be rallies in there that are going to offer great opportunities..and also even in the middle of a bear market there are things to buy. For example the homebuilders started tehir amazing bull market move right in the middle of the worst bear market in history..so its not all doom and gloom.
Brandon Fredrickson
Also, this has been a tough qtr for a lot of people, yours truely included. On my equities account I am currently up a measly 2.8%. Now, this is better than a lot of people and I did not lose money which is my first priority..but I get paid based on performance and 2.8% aint enough to keep my wife happy in the long term. Short term its fine and my chart looks great..esp when you put it next to other peoples. I did make my goal keeping a hold of my money when the market got wicked..I did that and now its time to start making profits again with all that preserved capital. I will post my charts tonight as well as do a longer piece. I'm going to talk about why I thinik we have entered into a longer term, cyclical bear market. I'm not a permabear though, there will be rallies in there that are going to offer great opportunities..and also even in the middle of a bear market there are things to buy. For example the homebuilders started tehir amazing bull market move right in the middle of the worst bear market in history..so its not all doom and gloom.
Brandon Fredrickson
Over the last few months I have not been posting very actively, and when I have been active I have been screaming from the top of my soap box to be careful and preserve capital. I feel that we are at the starting line of a real bear market, one that will be ugly and cost a lot of people their money and in the case of many managers and traders their livelyhoods.
I got some fan mail the other day from someone who decided to use a yahoo account that you can not reply to and choose to call himself thunderkizziz. The jist was you suck. You come on here and you say sit on your butt and don't do anything. The market has moved down sharply and all real traders are making a lot of money shorting this market, while you and other chickens**ts like you sit and shake.
I have made it as clear as I can here on my blog that my managed accounts are geared towards wealthy investors who's goal is the preservation of capital and then superior returns. When I first started managing money I was so excited to be doing it that I would take on anyone who called and said they wanted to give me money, this was a major mistake as the people around you tend to have a direct and dramatic effect on what you do. You had a number of people who had not been successful themselves looking towards me and hoping I could do for them what they could not do for themselves. Its a much more pleasant situation to deal with professionals who appriciate me as a fellow professional and realize that I treat their money as though it is my own. I have high standards in regards to what I feel is right and wrong, and I would not charge for sub par performance.
Over the last few months I have been pretty happy with my overall performance. While many people gave back 1/3 to 100% of their entire gains for the year over the last month and a half I have essentially gone sideways with my accounts and am basing. While at the end of the year I am paid on absolute performance, in the short to intermediate term relative performance keeps you confident and in the game.
Below is the graph of one clients account who has agreed that I could use his for demo purposes. All the other accounts in the program, including my own, look the same.
I got some fan mail the other day from someone who decided to use a yahoo account that you can not reply to and choose to call himself thunderkizziz. The jist was you suck. You come on here and you say sit on your butt and don't do anything. The market has moved down sharply and all real traders are making a lot of money shorting this market, while you and other chickens**ts like you sit and shake.
I have made it as clear as I can here on my blog that my managed accounts are geared towards wealthy investors who's goal is the preservation of capital and then superior returns. When I first started managing money I was so excited to be doing it that I would take on anyone who called and said they wanted to give me money, this was a major mistake as the people around you tend to have a direct and dramatic effect on what you do. You had a number of people who had not been successful themselves looking towards me and hoping I could do for them what they could not do for themselves. Its a much more pleasant situation to deal with professionals who appriciate me as a fellow professional and realize that I treat their money as though it is my own. I have high standards in regards to what I feel is right and wrong, and I would not charge for sub par performance.
Over the last few months I have been pretty happy with my overall performance. While many people gave back 1/3 to 100% of their entire gains for the year over the last month and a half I have essentially gone sideways with my accounts and am basing. While at the end of the year I am paid on absolute performance, in the short to intermediate term relative performance keeps you confident and in the game.
Below is the graph of one clients account who has agreed that I could use his for demo purposes. All the other accounts in the program, including my own, look the same.
For the last several months every time the market was down a bunch the pundits have come out and told you this was capitulation, BUY BUY BUY. Every time the market was down they would say this is the follow through, the momentum boys are back, BUY BUY BUY BUY. Meanwhile after every time they screamed buy you could count on a new low with in just a few days and more losses.
Very few people have been urging restrait, fewer still have been bearish. I have had two big points I have tried to pass along here on the swing of things for the last few months. A) Keep your powder dry, you dont HAVE TO TRADE. No one has a gun to your head. and B) If you are going to play, we are have clearly been in a bear market, and so the way to play would be short. When I have talked about buying it certainly has not been dead ducks, its been strong stocks like OII.
In any event, I think there is a reasonable chance that a bottom could be put in here. Notice I did not say THE bottom, I said A BOTTOM. Long term I honestly thing we have entered into a big big bear market. But, there are going to be corrections in the context of bear markets, and there will be bull markets that occur as well. I have not bought anything yet, but I am going to watch the next pullback in the market with more interest than I have been watching previous ones because if it occurs on light volume there are a number of stocks out there and some sectors as well which I am very interested in. Some names would include ESI, TXU, CELG, XPRSA. Look for names that held up. Tradingmarkets has an awesome scanning tool for stocks. I'd recommend looking at stocks that have maintain an RS of 85 or better over the last 3 months and have an EPR for 90 or better. This should have you looking at a lot of good stocks that are not going to be on other folks radar. When the market next pulls back then, lets hope it happens on low volume coz if it does we will have some xcellent buying opportunities.
Brandon
PS. Does anyone have experiance with Carlin/Generic Securities. I am considering opening an account there and would love to hear from folks who have worked with them before. So far I am very impressed with what I have seen and also what others have told me.
Very few people have been urging restrait, fewer still have been bearish. I have had two big points I have tried to pass along here on the swing of things for the last few months. A) Keep your powder dry, you dont HAVE TO TRADE. No one has a gun to your head. and B) If you are going to play, we are have clearly been in a bear market, and so the way to play would be short. When I have talked about buying it certainly has not been dead ducks, its been strong stocks like OII.
In any event, I think there is a reasonable chance that a bottom could be put in here. Notice I did not say THE bottom, I said A BOTTOM. Long term I honestly thing we have entered into a big big bear market. But, there are going to be corrections in the context of bear markets, and there will be bull markets that occur as well. I have not bought anything yet, but I am going to watch the next pullback in the market with more interest than I have been watching previous ones because if it occurs on light volume there are a number of stocks out there and some sectors as well which I am very interested in. Some names would include ESI, TXU, CELG, XPRSA. Look for names that held up. Tradingmarkets has an awesome scanning tool for stocks. I'd recommend looking at stocks that have maintain an RS of 85 or better over the last 3 months and have an EPR for 90 or better. This should have you looking at a lot of good stocks that are not going to be on other folks radar. When the market next pulls back then, lets hope it happens on low volume coz if it does we will have some xcellent buying opportunities.
Brandon
PS. Does anyone have experiance with Carlin/Generic Securities. I am considering opening an account there and would love to hear from folks who have worked with them before. So far I am very impressed with what I have seen and also what others have told me.
Lets assume that I have two friends (I know it's a stretch, but this is only for the sake of example) and recently went through a very hard time in my life. The dog and wife left me, I lost all my money, my business is going to the gutter, you know all the stuff that they sing about in a country and western ballad. One of these friends sticks with me though out. Lets me come over and sleep on his couch even though it ticks off his own wife, goes out for a few drinks with me when I need to talk and is just generally there for me. The other fella drops off the face of the earth. After some time things get back on track, I find a new girlfriend, a new dog and house and business picks up. Now both guys are my close friends again..but which one is truely the friend? Thats how I look at stocks. Recently the market has gone through a pretty tough patch and prices have declined sharply. While many people moan and complain about this, I find it to be a gold mine because you can find the "true friends", that being stocks that hold up as the market sells off. There are several sectors out there that look nice, among them Hotels, Ultilities and REITS as well as a number of stocks which have shown some great strength as the market sold off. Names like OII, LCC, EGOV, ESI, SLG, ADS and DDE for example have all held up in the face of market pressure. Now that the market looks like it may have put in a bottom, these are the kind of names I want to focus my attention and money on. Now, there are certainly problems with the market as it is right now. We had a follow through day after the Fed, but it was very late, coming on the 12th day after a rally. I find its better if it occurs with in seven, but we will take what we get. Also volume, while it was above its 20 day moving average, it was definatly not blowout. It was relatively heavy, but not what I'd have really liked to have seen. This means that all that caution I have been preaching for several months is still going to remain the primary order of the day, however I am going to probe at some of the stronger stocks. In terms of the market the next pullback is going to hold the KEY. If it occurs on light volume and we put in a higher low then I would feel a lot better. If we pull back on heavy volume and or fail to put in a nice higher low then the beat will go on and the bear will keep on grinding.
Brandon
Brandon
