How About FIVE Trader’s Thoughts of the Day
I expanded and updated my prior post and turned it into a full-fledged article for an outlet that I write for. Here’s the full version of the post, now with 5 Trader’s Thoughts of the Day.
First trader thought of the day — you can’t look back. On Friday, I wrote — “I would love to get short Groupon, but I am worried about being way too early. That and the fact that Google almost paid billions for this stupid concept company keeps me sidelined.” Coulda, woulda, shoulda, anybody? My subscribers at TradingWithCody.com and I have had some interesting discussions about GRPN [wsj-quote ticker=”GRPN” name=”Groupon Inc.” realTimeChannel=”/quotes/nls/grpn” channel=”/quotes/zigman/7212269″ id=”quote_3680570″] .
Second trader’s thought of the day — Flip It. Contrarianism is a way of life, even when you’re playing the lottery. If there ever were a day to do it, today, the day after the frenzy for half a billion dollar jackpot, is the day to go buy a lottery ticket. Seriously, why would you buy the lottery ticket when EVERYBODY else is?
Winning a lottery, whatever its size is the key, right? Not whether the lottery’s going to pay $15 million instead of $105 million instead of $500 million off a lottery ticket, right? You paid $1 for the ticket? These people who spent $1000 or more buying lottery tickets on Friday should have waited til today and then go waste, er, spend that $1000 on the same lottery tickets. Bet you’d have a much better chance of winning a decent chunk of change now than you did when everybody else was buying tickets last week, no? Contrarianism is a way of life. All that said, let me repeat — I HAVE NEVER IN MY LIFE BOUGHT A LOTTERY TICKET AND PROBABLY NEVER WILL. I’d rather buy some assets, even if that asset is a Snickers bar, with my dollar.
Third trader’s thought of the day — be objective about topping action, even — especially — in your longs. You guys know that I’ve pointed out my “dislocation warnings at the top” indicator in the past. That is, when a market/stock/asset class has been on a huge, long-term rally and then spikes up and then, most importantly in this case, starts to make daily 2-5% moves up and down — well, that’s a bearish indicator and one that makes me worried about a top being put in. You see Apple AAPL [wsj-quote ticker=”AAPL” name=”Apple Inc.” realTimeChannel=”/quotes/nls/aapl” channel=”/quotes/zigman/68270″ id=”quote_2897260″] up 2-3% and then down 2-3% for the last week or so? Something to pay attention to, though I’m obviously not freaking out and running for the hills yet with Apple remaining one of my largest positions. I have trimmed it down since we got to $600 though, and I would suggest you consider doing the same, especially on one of these up days, like today.
Fourth trader’s thought of the day — There are some things that you can’t do with being a part of the crowd. You gotta Flip your own Flip It sometimes.
Цекало и Puttin` отожгли на Воробьевых горах (“Putin’ on the Ritz” Wedding Reception Flash Mob in Moscow)
Being a part of the “long crowd” with Apple for the last decade has been one of the best things any trader and investor could have done for the last decade.
Fifth trader’s thought of the day – Be independent thinking in the questions you ask and be objective in the answers you give. The main point is to strive to be think independent. Whether you’re Flipping It or running with the crowd, be objective about what you’re trading, why you’re trading it and what your time frame is. Are you short Goldman Sachs GS [wsj-quote ticker=”GS” name=”Goldman Sachs Group Inc.” realTimeChannel=”/quotes/nls/gs” channel=”/quotes/zigman/188479″ id=”quote_5162836″] for the long run or are you looking for a near-term crash in all the financials? Why pull the trigger now? What about getting short the XLF [wsj-quote ticker=”XLF” name=”Select Sector SPDR-Financial ” realTimeChannel=”/quotes/nls/xlf” channel=”/quotes/zigman/246222″ id=”quote_231902″] or the VFH [wsj-quote ticker=”VFH” name=”Vanguard Financials ETF” realTimeChannel=”/quotes/nls/vfh” channel=”/quotes/zigman/1485038″ id=”quote_9876428″] instead of just GS? What about betting on a tech bubble with your money instead?
