Minimizing risk

Hello again.  It's been a while since my last post.

I'd like to touch on minimizing risk this time.  It's interesting how a company like LLEN can look promising at first and then things go sideways.  Of course there is always risk when trading equities but there are ways to reduce risk.  Thankfully I only had a small position in this company that is now being charged by the SEC.

There are the typical portfolio theory ways of doing so.  However, I would propose that there are more interesting options for the growth seeking investor.

So, picking stocks and trying to reduce correlation is a good option.  However, there are also some great ETFs out there.

Regarding particular ETFs, I'd rather not recommend individual ones.  However, there are some that emulate indicies, sectors, top companies in a sector, emerging markets, etc...

I think I've said this before but it's worth repeating.  Please be careful if you choose to use leveraged ETFs.

ETFs can provide diversification and reduction of risk compared to stock picking if one is careful.  However, typical due diligence is in order. How's the liquidity, etc...?

Best of luck with your investing / trading!  Cheers.

P.S. This investments course from MIT Open Courseware is quite good - http://ocw.mit.edu/courses/sloan-school-of-management/15-433-investments-spring-2003/lecture-notes/ .

(Image credit: http://en.wikipedia.org/wiki/File:Train_wreck_at_Montparnasse_1895.jpg )
“Luck is what happens when preparation meets opportunity.” - Seneca

Disclaimer: Please only use this information with a grain of salt and at your own risk / for educational purposes. I am not an investment advisor so please seek professional help if that's what you're looking for.

2013 Return

Happy New Year!

2013 was a year of challenges and learning for me.  My return was a bit disappointing to me this year.  For my 401K it was only 7%.

Apple was one of the issues with my trading this year.  I made the mistake of not sticking to a target sell price and holding the stock too long.  I don't feel too bad since even professional investors did the same.  Also APPL is bouncing back now.

This year I found that ETFs can be a valuable tool.  Please be careful though if you try leveraged ETFs.  One once said "they are like playing with fire".

I'm still learning from the free classes from MIT OpenCourseware regarding Finance.

Please see early posts for other resources.

Best of luck in your trading / investing.  Cheers.

“Luck is what happens when preparation meets opportunity.” - Seneca

Disclaimer: Please only use this information with a grain of salt and at your own risk / for educational purposes. I am not an investment advisor so please seek professional help if that's what you're looking for.

401K return for 2012

2012 was a challenging year for many including myself.  However, I am somewhat pleased to report that my 401K return for 2012 was 21.6%.

The return for my other account (through 11/30/12; reporting lags for some reason) was 29.5%.  I am thankful to still be outperforming the S&P 500.

So, what can one learn from 2012?  For me, it is to continue being consistent, working hard, and continue learning.  I am currently learning linear algebra and plan to go through other materials from the MIT Masters in Finance curriculum.  Although, I wonder how much is gained through education versus trading experience. I suppose both are valuable in their own way.

Here are a few examples of resources that I like to use among others:

• http://research.investors.com/stock-checkup/nasdaq-apple-inc-aapl.aspx
• http://research.investors.com/ibd-charts.aspx?cht=pvc&type=weekly&symbol=AAPL&src=
• http://finance.yahoo.com/q/ao?s=AAPL+Analyst+Opinion
• http://finance.yahoo.com/q/op?s=AAPL&m=2013-02
• http://finance.yahoo.com/echarts?s=%5EVIX+Interactive#symbol=%5Evix;range=3m;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined; (VIX dropped dramatically after Fiscal Cliff deal was announced :) )
• http://www.google.com/finance?client=ig&q=NASDAQ:AAPL
• http://www.google.com/finance?ei=c86nUJCGGOapiQKnXw
• http://www.finviz.com/
• http://www.bloomberg.com/markets/economic-calendar/
• http://news.investors.com/investing/big-picture.htm
• Bloomberg radio, TV, CNBC videos with Art Cashin, etc...

It's tempting to blame the politicians for not resolving the Fiscal Cliff sooner.  However, it seems more worthwhile to focus on what one can control.  I'm guessing that my year would have been better if they had done so but I am hopeful for 2013.

Best of luck in your trading / investing.  Cheers.

“Luck is what happens when preparation meets opportunity.” - Seneca

Disclaimer: Please only use this information with a grain of salt and at your own risk / for educational purposes. I am not an investment advisor so please seek professional help if that's what you're looking for.

Investing in Facebook right after the IPO is a case study in what not to do.

Sadly, investing in Facebook right after the IPO is a case study in what not to do.  It debuted at $38 dollars a share and is now at $19.54.  So, hypothetically for someone who invested $10,000 in a long position lost roughly 48.5% or $4857.  The question now is why was this a bad investment and how can folks make a better choice in the future.  Please note I'm not saying that Facebook as a company is doomed.  Hopefully they will do well in the future.

Data is your friend when it comes to investing.  How can you use it to improve your odds?

• Options: I do not know for sure but I am guessing that there was little or no options data available prior to the IPO.  http://finance.yahoo.com/q/op?s=FB+Options is a good example of call and put data.  If you are going buy stock, or take a long position, does it jive with the call options volume and the call versus put volume?  It's okay to "fight the market" if you have good reason, if not do you really want to take that gamble?
• Investors.com: Investors.com is a great resource.  Their CANSLIM strategy is pretty good.  The do some good ratings on stocks too.  Get a free trial and try this http://research.investors.com/stock-checkup/nasdaq-facebook-inc-cl-a-fb.aspx .  To get to the point, they rank FB quite poorly.  They use a variety of fundamental and technical indicators and have good charts as well.  They generally warn folks to stay away from IPOs also.
• Analyst opinion: http://finance.yahoo.com/q/ao?s=FB+Analyst+Opinion is an example of analyst rating data for Facebook.  The average rating is in the hold territory so take this with a "grain of salt".  However, this is good to consider again because it can affect stocks and do you really want to "fight the market"?
• Chart action: How does the stock chart look.  FB's chart above is a mess.  It is way below the IPO and below its simple moving averages also.  Google finance and Finviz.com are good resources for charts and other data (insider transactions / ownership, etc...)
• Etc...: There are other things that you may want to consider based on your risk tolerance, strategy, etc...  The list above is not meant to be exhaustive by any means.

I tried to warn folks that I know about FB before the IPO.  Unfortunately, some people still lost money.  Maybe some will do okay in the long run (years)...  Cheers.

“Luck is what happens when preparation meets opportunity.” - Seneca

Disclaimer: Please only use this information with a grain of salt and at your own risk / for educational purposes. I am not an investment advisor so please seek professional help if that's what you're looking for.

Thankful for 401K return through Q2 - 2012

I am thankful for my self-managed 401K return through Q2 2012.  It is 31.8%!  I may have taken a small hit last year, in my other account, with an algorithm experiment but this year is going well thankfully.  I will be the first to recognize that it is best to be not get full of oneself because the market can humble one quickly if one is not careful.

There are lots of great resources out there if you would like to get started investing / trading stocks.

Here are several.

• http://www.investors.com/ 
• http://www.finviz.com/
• Google Finance
• Bloomberg TV - http://www.bloomberg.com/tv/
• http://www.marketwatch.com
• CNBC (they have some good news videos for keeping up on the market)
• Yahoo Finance (has great data regarding analyst price targets)
• Earnings calendar (from Yahoo Finance, another tool helpful when screening stocks)

Cheers.


“Luck is what happens when preparation meets opportunity.” - Seneca





Disclaimer: Please only use this information with a grain of salt and at your own risk / for educational purposes. I am not an investment advisor so please seek professional help if that's what you're looking for.

AAPL update before Q2 earnings 2012

The fruit stand, aka Apple, is trucking along despite the worries of some over the mess in Europe and the seeming lack of political will to "do the right thing".  Some have similar concerns for the USA regarding the "Fiscal Cliff" and national debt.

Back to AAPL though, how do you feel it'll fare for its quarter two earnings of 2012 in a few weeks?  For the short term the call options volume looks relatively good up to $610.  The analyst opinion still looks good also with a mean target of $713 (43 analysts).  There's a variety of fundamental data out there too.  Insider transactions look favorable also.

There are rumors that the iPhone 5 is coming around October but who knows...  Best of luck with your trading / investing.

For other stock ideas, check out investors.com.  They have a free trial if you need access.  Cheers. (AAPL graph source - google.com/finance)

“Luck is what happens when preparation meets opportunity.” - Seneca





Disclaimer: Please only use this information with a grain of salt and at your own risk / for educational purposes. I am not an investment advisor so please seek professional help if that's what you're looking for.

Data for The Fruit Stand (aka Apple - AAPL)

Here's some recent data for The fruit stand , also know as Apple (AAPL).  According to Yahoo Finance, their mean price target is roughly $707.  The call options volume looks pretty good up to the range of $650 - $670 so far.  Finviz.com has some good data too on insider transactions, short interest, and a variety of other data points.  It should be interesting to see what happens when, as some are guessing, in the near future that Apple announces the iPhone 5.

I'm still holding long positions by the way.  Best of luck with your trading and/or investing. Cheers.

“Luck is what happens when preparation meets opportunity.” - Seneca





Disclaimer: Please only use this information with a grain of salt and at your own risk / for educational purposes. I am not an investment advisor so please seek professional help if that's what you're looking for.