I've Done Some Stupid Things in the Past

[David Mauldin]

  I've done some stupid things in the past but this morning, when I opened up the L.A. Times, I read a front page article about Martha Stewart. Martha is just finishing a five month prison sentence. Her company "Martha Stewart, Omnimedia" is poised to make a financial turnaround after suffering lossess during the past two years. Martha's future is looking brighter because of a merger between Sears and K-mart and two T.V. shows she has agreed to do along with three book deals. Last October I bought 900 shares of Martha's stock at 16.20 (You remember Brent/ i advised you to get in?  did you bro?) today it is at 37.35 and heading North. Yep, I've done some stupid things in the past but for some reason I just can't remember any of them!!!!  Anyone like to offer financial advice?

[Mark C.]

Hi David,


   Yes, I would like to advise you to sell at least half those shares on Monday and lock in some profit.  If it were me I would unload them all and go elsewhere.  Individual stocks can be difficult to trade for those who can't sit and watch them all day.  Consider putting your money in an Index fund, or no-load mutual fund.

   The stock price is getting a little lofty where it is now, and probably has priced in all the things that you mentioned at this point.

  You could also just write some covered call options, because they will bring a good premium at this time.  Most stock moves (commodities as well) are over reactions that eventually settle into more mundane channels between the high and low.  If on a chart of the stock there is a sharp move in either direction it usually exhausts itself.

   If I'm right, and you make some money, please be advised of my 10% charge for good advice!

                                                  God Bless,  Mark C.

[David Mauldin]

  Mark, the wife says the same, I figure the day she (Martha) gets out it (the stock) will jump again. Then I will take my earnings. I am currently applying to an investment club. Yet it will take two months before they will vote on me.  Sounds like you have been around the block. What luck have you had? Everyone I have read on MSO has said the same thing "the stock is inflated" yet the numbers keep going up???  Most experts site the past performance but why aren't they considering her potential?  The club is strongly invested in about ten stocks. I think it is the safe way to go. Oh, by the way I have 4 retirement plans going. (This is why the wife let me do the MSO thing) All pretty secure except for S.S. You can have the 10% on the private investment profits Bush has promised

[editor]

  Mark, the wife says the same, I figure the day she (Martha) gets out it (the stock) will jump again. Then I will take my earnings. I am currently applying to an investment club. Yet it will take two months before they will vote on me.  Sounds like you have been around the block. What luck have you had? Everyone I have read on MSO has said the same thing "the stock is inflated" yet the numbers keep going up???  Most experts site the past performance but why aren't they considering her potential?  The club is strongly invested in about ten stocks. I think it is the safe way to go. Oh, by the way I have 4 retirement plans going. (This is why the wife let me do the MSO thing) All pretty secure except for S.S. You can have the 10% on the private investment profits Bush has promised

Careful David.

I haven't followed this stock, but sometimes the price will spike when it is being shorted. Be careful.

I am about 200k poorer today than I was in 1999, because my awesome stock portfolio took a spectacular dive.  Don't let greed take away your profit!  Been there, done that, ain't fun.

Brent

[vernecarty]

If you want to be reasonably safe, put the money a mutual fund.  Ariel is a good choice.
If you want to gamble, short the dollar against practically anything, preferably the Euro.
It's probably a one-way bet...
Verne
p.s. Brent that is a huge decline. Anything more than a five percent drawdown and I'm gonna be making big changes...

[editor]

If you want to be reasonably safe, put the money a mutual fund.  Ariel is a good choice.
If you want to gamble, short the dollar against practically anything, preferably the Euro.
It's probably a one-way bet...
Verne
p.s. Brent that is a huge decline. Anything more than a five percent drawdown and I'm gonna be making big changes...

I am too.

I did so well my first few years on the market, I thought i was too clever.  So, I added to my positions and took advantage of a temporary weakness in the tech sector....

I still hope that the weakness is temporary, but it has lasted longer than I had hoped at the time, to put it mildly.

Brent

[editor]

If you want to be reasonably safe, put the money a mutual fund.  Ariel is a good choice.
If you want to gamble, short the dollar against practically anything, preferably the Euro.
It's probably a one-way bet...
Verne
p.s. Brent that is a huge decline. Anything more than a five percent drawdown and I'm gonna be making big changes...

I am too.

I did so well my first few years on the market, I thought i was too clever.  So, I added to my positions and took advantage of a temporary weakness in the tech sector....

I still hope that the weakness is temporary, but it has lasted longer than I had hoped at the time, to put it mildly.

Brent

[Mark C.]

 David, Brent and Verne,

  I am new to stock trading, as I have been involved mostly in trading futures.

   I got into trading with the expectation of making a bunch of money, but learned  (as Brent did) that greed can be a very dangerous thing.

 I have since learned that you must trade within certain paramaters to control your risk.

1.) When the value of the trade doubles take profits by selling half, if not more.  Decide before you enter the trade what your plan will be in this regard.  Another option for locking in profit is to trail the rising stock price with trailing stops (moving your stop loss up as the price rises).  When buying on margin (all futures are like this) this is especially important.

2.)  Use sell stops, and never allow losses to exceed 10%.  Never get married to a trade, or try to outsmart the market.   Even the most successful futures traders will only have 35% of their trades turn out positive, and so it becomes a game of letting the winners run and cutting the losers quick.

  I am a very small peanuts trader and do it because it offers me an intellectual challenge, as well as causing me to face the facts of the fear and greed that lurk in my soul.

  I am about even in the above battle in futures, which is better than most. 

  If you're not looking for the stimulation factor of trading the best bet is to put the money into low cost mutal funds, or ETF's (exchange traded funds).  Or maybe put most of it into a managed account, and keep a small amount out to play with for your own entertainment.

  PS:  I'm too old to take the "private account", but if I was I would snap it up in a NY minute!

                                         God Bless,  Mark C.

 

 

[vernecarty]

David, Brent and Verne,

  I am new to stock trading, as I have been involved mostly in trading futures.

   I got into trading with the expectation of making a bunch of money, but learned  (as Brent did) that greed can be a very dangerous thing.

 I have since learned that you must trade within certain paramaters to control your risk.

1.) When the value of the trade doubles take profits by selling half, if not more.  Decide before you enter the trade what your plan will be in this regard.  Another option for locking in profit is to trail the rising stock price with trailing stops (moving your stop loss up as the price rises).  When buying on margin (all futures are like this) this is especially important.

2.)  Use sell stops, and never allow losses to exceed 10%.  Never get married to a trade, or try to outsmart the market.   Even the most successful futures traders will only have 35% of their trades turn out positive, and so it becomes a game of letting the winners run and cutting the losers quick.

 
                                         God Bless,  Mark C.

 

 

Words of wisdom. As I said. my own pain threshold is a measly five ticks.
The stop-loss is a wonderful new feature of the trading markets and I cannot imagine anyone trading without that as a part of the straegy. There is no better way to find out what you are really made of than investing you own shekels.
Like Brent, I too have learned a few interesting things about myself.
It is a great discipline.
Verme
p.s. Despite the hue and cry about volatility, those private accounts would be the best thing that could happen to young workers. The whole FICA confiscation is a rip-off to anyone with half a brain about investing their own funds....

[David Mauldin]

   Thanks for the advice,  I am planning on selling around March 8th two days after she gets out.  She is already scheduled to be interviewed by Barbara and Larry. Every newspaper and news magazine will cover her release. In the same breath they will mention the fact that her company stock is at its highest point ever. So I can't imagine it not going up at least a few $.  But you are right the greed bug has bitten and it is time to get out regaurdless. Since we are on the subject I will mention that I am at a CTA conference here in Pala Mesa Casino. I brought the wife just to make sure I didn't get into any trouble.  As it stands she has lost $24 bucks!! I have yet to even gamble!!! 

[outdeep]

You guys are better men than I.  I took an excellent online course on investing and learned enough to realize that need an expert to help me.  I let my finance guy advise my portfolio.

[David Mauldin]

  Dave, I really don't know anything I just hit it very lucky!  I remember telling my wife, "We'll look at it in a year...."  So today I decided to sell the whole thing and play it safe.  I will give my wife half (She wants to put it on a house in Tustin) and the rest will go into the investment club. It sure was a lot of fun while it lasted!  Brent that 200k? Man you are livin!!!!

[outdeep]

  Dave, I really don't know anything I just hit it very lucky!  I remember telling my wife, "We'll look at it in a year...."  So today I decided to sell the whole thing and play it safe.  I will give my wife half (She wants to put it on a house in Tustin) and the rest will go into the investment club. It sure was a lot of fun while it lasted!  Brent that 200k? Man you are livin!!!!

Great!  Good luck in future investments.

[David Mauldin]

I just wanted to clarify the comment about 15 grand down on the house.  No we aren't looking at that house that slid halfway down the hill.  The 15 is a little help with the money we hope to get on our present property! 15 could get you a pretty good house in N.C.!!!!   Brent did your wife woop you for that??

[editor]

I just wanted to clarify the comment about 15 grand down on the house.  No we aren't looking at that house that slid halfway down the hill.  The 15 is a little help with the money we hope to get on our present property! 15 could get you a pretty good house in N.C.!!!!   Brent did your wife woop you for that??

No, she didn't whoop me.  The reason is that we made so dang much money.  We could have made much more, however.  Greed. It's a bad thing.

You were smart to sell.

Brent