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| 06/01/02 | re: re: Advisors vs. individuals # |
Guan Seng Khoo
 |
Hi Keith,
Good advice. It is very difficult to be right even 80% of the time,and being "right" does not always make you money. You have to get executed, and you will find that often you are "right" but you miss your prices and it ruins the trade.
e.g., yesterday I was watching PNRA. It had a good sell off Thursday on positive earnings news and it is a volatile share. My instinct was that the stock was sold by breakout guys and it would bounce when they covered,particulary if the indices rallied. I was using the pivot points provided by RealTick as my support/ resistance. When the stock rallied to 63 dollars mid
morning, I figured it would rally to the next pivot line at 64. The Nasdaq and Dow were well bid, so I was trading with the market trend. There was 500 offered at 63.02 and I went to lift and I got only 100 shares, the market immediately went to 63.35. What to do now? Well I waited to see if there was a dip back to 63.05-63.10. No chance. PNRA proceeded to rally to
64.00 and then it broke down through 63.00 to 62.00.
This is a good example of what often happens when day-trading, but can be extrapolated to any time frame. What do you do when you only get 20% of your shares at your intial buy price and you are now 33% to your target sell? What happens if the market touches your sell price but you are not filled? Do you wait for it to go back through your sell price or do you use a trailing stop? Being "right" about the market direction is only half of the game. What you do when the trade does not go exactly as planned(probably
80% of the time) is the difference between winning and losing.
> Keith Butler wrote:
> Steve:
>I am an advisor, and I can say this. I lost more accounts in 1999/2000 when the market was doing great than I've lost these days. In fact some of those accounts have come back to me.
>
>What's important in selecting an advisor is their experience, integrity, and willingness to be reasonably competitive in their fees.
>
>An advisor who really does his homework can add tremendous value by keeping you out of bad sectors, and putting you in good sectors. 3/4 of the battle of picking stocks is picking the RIGHT sector. All boats rise/fall with the tide. The guy that keeps telling you to buy more ORCL, SUNW, and CSCO is offering you NO VALUE whatsoever. Those are the last bull markets' winners. There will be a new group of stocks that will lead the way in the next bull market.
>
>Attractive sectors: Defense, Basic Industry, Consumer Cyclicals, Biotech, Energy/oil, financials
>
>Avoid Sectors: Telecom, Technology, Big Cap Pharmaceuticals, And possibly the homebuilders simply b/c their main driver, interest rates, are probably not going to get much lower.
>
>The market is quite volatile so make sure that you don't chase anything!! Get your buy list ready, and scale into positions on down days. When you start losing sleep you must sell down to your sleeping level. Also you may want to retain the services of someone who will manage your account for a flat "asset based" fee, as opposed to transactional commissions. this should eliminate the conflicts of interest. Good Luck
>
>> Steve Johnston wrote:
>> I have spoken with a number of people who had gone out on their own and tried serving as their own advisor, only to find that they needed a professional to help them catch their balance. What has been everyone else's experiences? Why have you or have you not chosen to work with a financial advisor. Keep in mind that most advisor are not fee-based planners.
>>
>>Steve
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| 05/31/02 | re: re: Advisors vs. individuals # |
Steve Johnston
 |
Hello Keith!
I agree with you completely! Good advisors look at the big picture and avoid getting caught up in the moment.
Do you focus on investments solely or do you get involved in insurance, estate planning and other areas?
Steve
> Keith Butler wrote:
> Steve:
>I am an advisor, and I can say this. I lost more accounts in 1999/2000 when the market was doing great than I've lost these days. In fact some of those accounts have come back to me.
>
>What's important in selecting an advisor is their experience, integrity, and willingness to be reasonably competitive in their fees.
>
>An advisor who really does his homework can add tremendous value by keeping you out of bad sectors, and putting you in good sectors. 3/4 of the battle of picking stocks is picking the RIGHT sector. All boats rise/fall with the tide. The guy that keeps telling you to buy more ORCL, SUNW, and CSCO is offering you NO VALUE whatsoever. Those are the last bull markets' winners. There will be a new group of stocks that will lead the way in the next bull market.
>
>Attractive sectors: Defense, Basic Industry, Consumer Cyclicals, Biotech, Energy/oil, financials
>
>Avoid Sectors: Telecom, Technology, Big Cap Pharmaceuticals, And possibly the homebuilders simply b/c their main driver, interest rates, are probably not going to get much lower.
>
>The market is quite volatile so make sure that you don't chase anything!! Get your buy list ready, and scale into positions on down days. When you start losing sleep you must sell down to your sleeping level. Also you may want to retain the services of someone who will manage your account for a flat "asset based" fee, as opposed to transactional commissions. this should eliminate the conflicts of interest. Good Luck
>
>> Steve Johnston wrote:
>> I have spoken with a number of people who had gone out on their own and tried serving as their own advisor, only to find that they needed a professional to help them catch their balance. What has been everyone else's experiences? Why have you or have you not chosen to work with a financial advisor. Keep in mind that most advisor are not fee-based planners.
>>
>>Steve
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| 05/30/02 | Great Finance Website # |
Keith Butler
 |
For all of you who have busy schedules and find it difficult to stay ahead of the curve on your stock investments I have a great website: www.thestreet.com . If you logon to this site once a day you get a good flavor for what's working, what's not, and most importantly WHY. It cuts down on the never ending flow of information that you need to wade through on a daily basis, and allows you to focus on the news that matters. I think it costs about $200 per year and it's well worth it.Post Reply Reply by Private Message (new win) |
| 05/29/02 | re: Advisors vs. individuals # |
Keith Butler
|
Steve:
I am an advisor, and I can say this. I lost more accounts in 1999/2000 when the market was doing great than I've lost these days. In fact some of those accounts have come back to me.
What's important in selecting an advisor is their experience, integrity, and willingness to be reasonably competitive in their fees.
An advisor who really does his homework can add tremendous value by keeping you out of bad sectors, and putting you in good sectors. 3/4 of the battle of picking stocks is picking the RIGHT sector. All boats rise/fall with the tide. The guy that keeps telling you to buy more ORCL, SUNW, and CSCO is offering you NO VALUE whatsoever. Those are the last bull markets' winners. There will be a new group of stocks that will lead the way in the next bull market.
Attractive sectors: Defense, Basic Industry, Consumer Cyclicals, Biotech, Energy/oil, financials
Avoid Sectors: Telecom, Technology, Big Cap Pharmaceuticals, And possibly the homebuilders simply b/c their main driver, interest rates, are probably not going to get much lower.
The market is quite volatile so make sure that you don't chase anything!! Get your buy list ready, and scale into positions on down days. When you start losing sleep you must sell down to your sleeping level. Also you may want to retain the services of someone who will manage your account for a flat "asset based" fee, as opposed to transactional commissions. this should eliminate the conflicts of interest. Good Luck
> Steve Johnston wrote:
> I have spoken with a number of people who had gone out on their own and tried serving as their own advisor, only to find that they needed a professional to help them catch their balance. What has been everyone else's experiences? Why have you or have you not chosen to work with a financial advisor. Keep in mind that most advisor are not fee-based planners.
>
>StevePost Reply Reply by Private Message (new win) |
| 05/29/02 | Advisors vs. individuals # |
Steve Johnston
|
I have spoken with a number of people who had gone out on their own and tried serving as their own advisor, only to find that they needed a professional to help them catch their balance. What has been everyone else's experiences? Why have you or have you not chosen to work with a financial advisor. Keep in mind that most advisor are not fee-based planners.
StevePost Reply Reply by Private Message (new win) |
| 05/28/02 | fundamental attribution error # |
Sean Phelan
 |
"Friedfertig and West point out that 'Many traders take all the credit when they are successful and blame the market when they are not.' This is an example of what psychologists call the 'fundamental attribution error.' The fundamental attribution error is the tendency to over-attribute success to one's ability, while underestimating the contributions of external circumstances. Making the fundamental attribution error too often may make you feel overly confident, and such overconfidence can be dangerous."Post Reply Reply by Private Message (new win) |
| 05/24/02 | Worthwhile article on "roomy" trading/investing strategies # |
Sean Phelan
|
"ROOMY TRADING PLANS
Successful traders tend to have a specific routine when it comes to their trading plan. Whether they're making a long-term trade or looking for intraday opportunities, their methodology in evaluating trades or investments doesn't leave much room for making last minute decisions - it's more of a process of following a series of rules.
Novice traders often have difficulty developing such systematic trading plans. They tend to come up with routines or plans that leave a lot of room for last minute decision-making, and which usually cause them to fall into common psychological traps and make incorrect decisions. This is because they don't understand how to set rules for what they view to be innumerable unknown factors that they think will only become apparent as they watch a specific price pattern.
They figure that they need to, and can "fill-in" their trading plan at the last-minute, such that each decision is made partly based on a "plan" and partly based on other decisions and assessments made right before entering the trade. Successful traders on the other hand, have learned that if they need to "fill-in" the details of their plan at the last minute, their plan is structured incorrectly.
Last-minute observations and considerations can easily cause the trader to fall into common psychological traps. Since the trader tries to quickly factor these into his incomplete trading plan, potential emotional influences (like fear, greed, hope, and panic) become a real part of his decision-making. In addition, the trader is more susceptible to media influences and will have difficulty properly assessing and sticking to risk ratios and stop-loss points. Therefore, what seems to the trader to be a planned, objective decision is really an emotional one.
And often times, the losses resulting from such decisions will cause the trader to lose any confidence he may have had, and to believe that he doesn't have what it takes to become a successful trader. This can lead to other longer-term psychological issues.
The key to prevent this from happening to you is to very critically evaluate what you believe to be a good trading plan. How much of the decision-making is done immediately before your trade? What kind of observations and assessments does your plan require you to make, and how susceptible are they to emotional and outside influences? Answering these types of questions will guide you to properly evaluate the effectiveness of your trading plan."Post Reply Reply by Private Message (new win) |
| 05/23/02 | Enter the market without expectations # |
Sean Phelan
|
Good stuff
"To keep experiencing the novelty and freshness of the market, and to keep from being trapped by your preconceptions, it's important to keep distinguishing between the tape and your interpretations of the tape. View as neutral both the events and your inclination to impose your interpretations on them. You enter the market without expectations, surrendering to it rather than struggling with it for personal gain. Ultimately, you are able to fine-tune your responses."
-Trading to Win, by Ari Kiev, M.D., p. 26 Post Reply Reply by Private Message (new win) |
| 05/23/02 | re: re: The effect of fear in trading by Mark Douglas # |
Sean Phelan
|
Well said Mike.
Your comment, "anyone who thinks they really know themselves should try trading for a living" reminded me of a favorite allegory. Of course, this will be more interesting for fellow Fantasy/SciFi fans, but recall in 'The Empire Strikes Back' when during Jedi training Yoda tells Luke to go into that mysterious cave? Luke wants to bring his weapons but Yoda tells him he won't need them & something to the effect that all he has to fear is what he brings with him.
The first time I saw that movie since being in the industry it struck me how much like trading that is. The only thing you have to fear is all the baggage you just walked in with. Of course, Luke ignores his mentor's advice - that's pretty apropos, as well.
> Mike Ball wrote:
> Great post. I couldn't agree more. The first 2 months of actual Daytrading the markets I have recently felt compelled to write down that which I perceive is holding me back from consistent profits.
>
>I'm afraid of and must therefore overcome the following;
>
>I fear...
>
>...lack of focus and discipline
>...trying this at the wrong time in my life
>...delluding myself
>...always working alone
>...not having a coach
>...feeling inadequate
>...running out of money
>...running out of time
>...progressing too slow on my own
>...never being successful at it
>...being wrong
>
>anyone who thinks they really know themselves should try trading for a living. Rest assured you'll find out who you really are.
>
>-momo
>> Sean Phelan wrote:
>> "In a winning trade, the fear of losing will cause us to focus our attention on information that the market is going to take our profits away, compelling us to get out early. In a losing trade we will focus our attention on just the opposite information-anything other than that which would indicate the trade is a loser. Fear causes us to act without a perception of choice. When we are afraid to confront certain categories of market information, it drastically limits the choices that we perceive as available. Cutting a loss isn't a choice if we systematically block from our awareness any information that would indicate that we are in a losing trade. Staying in a winner isn't a choice if we are consumed with the fear that the market is going to take away our money... To prevent these blind spots in our perception, we have to learn to trade without fear."
>>- The Disciplined Trader: Developing Winning Attitudes, by Mark Douglas
>
>
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| 05/18/02 | re: re: naming a VC fund # |
Dave McClure
 |
"We Wish It Was 1999 Again Ventures"
"Full Ratchet Capital"
"Deep Pockets Short Arms LP"
"Don Valentine is God Investments"
"Lemmings R Us"
(these and other fine ideas from 500 Hats ;)
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| 05/18/02 | re: The effect of fear in trading by Mark Douglas # |
Mike Ball
 |
Great post. I couldn't agree more. The first 2 months of actual Daytrading the markets I have recently felt compelled to write down that which I perceive is holding me back from consistent profits.
I'm afraid of and must therefore overcome the following;
I fear...
...lack of focus and discipline
...trying this at the wrong time in my life
...delluding myself
...always working alone
...not having a coach
...feeling inadequate
...running out of money
...running out of time
...progressing too slow on my own
...never being successful at it
...being wrong
anyone who thinks they really know themselves should try trading for a living. Rest assured you'll find out who you really are.
-momo
> Sean Phelan wrote:
> "In a winning trade, the fear of losing will cause us to focus our attention on information that the market is going to take our profits away, compelling us to get out early. In a losing trade we will focus our attention on just the opposite information-anything other than that which would indicate the trade is a loser. Fear causes us to act without a perception of choice. When we are afraid to confront certain categories of market information, it drastically limits the choices that we perceive as available. Cutting a loss isn't a choice if we systematically block from our awareness any information that would indicate that we are in a losing trade. Staying in a winner isn't a choice if we are consumed with the fear that the market is going to take away our money... To prevent these blind spots in our perception, we have to learn to trade without fear."
>- The Disciplined Trader: Developing Winning Attitudes, by Mark Douglas
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| 05/16/02 | What is Direct Access Trading via ECNs? # |
Guan Seng Khoo
|
An Introduction to Direct-Access Trading via ECNs - Adapted from Stock Magazine, ChinaonWallStreet.com
A. Introduction
In the past, many people relied on web-based traditional on-line brokerages. Those brokers made the rules. For example, TD Waterhouse does not depend solely on its customers’ commission to make money. Along with its market maker, TD Waterhouse can make a profit off from the spread.
For instance, if you put in an order to sell Cisco (CSCO), your online broker would then send your trade to a market maker. A market maker brings together buyers and sellers and can trade on behalf of customers, firms or themselves. They make their money off the spread, the difference between what a person is willing to sell a stock for and what another person is willing to buy it for. If a TD Waterhouse customer wants to sell CSCO at $44 and the market maker has someone willing to buy at $44.05, the market maker can pocket the five-cent difference. In some cases, the market maker shares a percentage of that profit with the online brokerage firm. This is definitely not in the best interest of the client.
B. Removing the middleman and further improving capital market efficiency – direct-access trading
If an investor were to log onto a direct-access trading site, he would see, in real time, a list of buyers on one side of the screen and a list of sellers on the other side of the screen. He can choose his own buyer or seller based on the prices being offered. The direct access platform then routes the order directly to an electronic communication network (ECN), such as Archipelago, Instinet or Island, or to a small order execution system. Unlike a traditional online brokerage, where an investor never knows when a trade might actually take place, a direct access site is almost immediate and you can watch as your order is being filled, making your investment decision very transparent!
Active traders and institutional traders especially, use direct access to compete with other professional market participants. And just as important, direct access allows traders with large orders to route their trades to market participants dealing in the largest possible inventory, raising the odds of getting a complete fill at a fair price.
Anyone who trades stocks off price and/or volume signals needs rapid order execution. This applies whether you day trade, swing trade or take positions for the intermediate term.
Trading in this manner, however, is not for everyone. Direct access sites on average now require USD 25,000 to open an account and will investigate if a potential customer can qualify. The Direct Access Broker will want to know your trading experience and your net worth. This is all for your protection. On the investor side, the onus is on the investor to be fairly informed and knowledgeable about investments. The current mentality of a fair proportion of investors and traders in the local market is to react to rumours or so-called tips from their brokers who may be merely churning the trades to create the impression that the market is liquid. On the other hand, direct access trading forces the investors and traders to be more sophisticated and rely less on the “middle men”.
To be sure, a number of online brokerages have begun to push out rapid order execution alternatives for active traders. Depending on your trading style, account activity and order size, higher commission costs may offset any gains you obtain by reducing slippage. Slippage is the difference in the price of the stock that appears on a quote screen at the time you place a trade and the price at which your order is filled. The greatest slippage occurs with non-direct access brokers. This disadvantage is usually not in the minds of the typical investor which trades through the traditional broker, online or otherwise.
However, be aware that those low commissions still come at a price. Your online broker typically routes your order to third party trading firms like Knight Trimark for your order-fill. That’s a slower process than smart order-routing technology that sends your order directly to market participants at your chosen price. Order confirmations often will be slower. Direct-access confirmations typically show up on your screen immediately upon execution. A mainstream online broker typically relies on an email system. Your order is passed on to a trading desk for handling, with email confirmation in some cases taking a minute or longer to post your return address.
One thing is certain. Brokerages are catching on to the fact that they must provide direct access as an option to their customers or lose their most active, and thus lucrative, accounts to the new breed of brokerages, namely, the direct access brokers.
As with a regular online broker, you can access your direct-access account via the Internet, although typically for trading via direct access, you must use a broadband connection such as a digital subscriber line (DSL) or digital cable. A dial-up connection would not be able to handle the heavy data traffic of this system.
Thus, direct access trading gives you total control of your trades. You have the flexibility to route your order to the most competitive market. For instance, through a direct access broker, you interface directly with ECNs (Electronic Communication Networks) for NASDAQ or listed stocks, where you can see your bids or offers posted, know when trades are executed, and quickly cancel or adjust unfilled orders.
C. Electronic Communication Networks (ECNs)
In January 1997, the U.S. Securities and Exchange Commission (SEC) implemented new Order Handling Rules that revolutionized trading in NASDAQ securities.
These rules require a market maker to display customer limit orders that are priced at or better than the market maker’s current quote if not immediately executed. Alternately, the market maker can place the order onto an eligible ECN that displays the order to the market. These new rules created the opportunity for ECNs to interact directly with the NASDAQ National Market.
What does this mean to you if you are an individual trader? Essentially, it allows you to decide exactly how and where your order is routed. It gives you the power and control to find the best price and the highest liquidity for any given stock. Direct access trading also saves you money as it eliminates the middleman, enabling you to own the entire trading process. You have the ability to post your order at the bid or offer price and even change the “inside market” by increasing the bid or decreasing the offer. Direct access gives you the upper hand in the market and the direct access broker’s state-of-the-art trading platform serves as your high speed, constant, live connection to the marketplace.
D. Convenient Order Execution
Another primary difference between a traditional broker and a direct access broker is the speed at which your order is executed. Unlike a traditional broker interface, which requires you to update your browser each time you enter or change an order, a direct access broker offers a direct access technology which supplies a constant, two-way connection, resulting in your orders being sent for execution quickly. This convenience also applies to the order confirmations.
E. Intelligent Order Routing
Direct Access can tremendously enhance your trading experience and provide you with an edge in the marketplace. Many of the ECNs available through the direct access brokers’ trading platforms facilitate intelligent order routing, an automated search process that seeks the best available price in the marketplace across multiple ECNs and market makers. Once located, the ECN instantly routes your order to that market for execution.
F. Conclusion
Direct access trading and trading with an online broker are actually two different forms of trading stocks (or other types of investment vehicles).
While trading via the Internet has given the individual more freedom and power with their investment strategy, direct access trading goes one step further. With the advent of legislative changes in the stock market industry over the last 15 years in the US, direct access trading has become a viable and profitable form of trading by eliminating the middleman; you are connected directly to the markets.
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| 05/16/02 | re: naming a VC fund # |
Stephen Galluccio
|
Red Rocket Capital
reCap
ClearSpark ClapitalPost Reply Reply by Private Message (new win) |
| 05/14/02 | Do you know of Oracle or Hyperion Financials Training # |
Brian Maude
 |
Despite their popularity, I have not used either of these programs, yet I am finding they are often required for some Financial or Consulting positions I'm seeking.
Does anyone know of any Bay area training centers that teach either of these?
I'm also looking for feedback on people's experience with each and recommendations on whether I should take classes one or the other.
My financial software experience has included Dun & Bradsteet, Platinum, Crystal Reports, other in-house EIS and data-mining programs and of course Excel and Access extensively.
You can write her to share with all, or write me directly.
Thanks,
Brian
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| 05/13/02 | re: naming a VC fund # |
Keith Butler
|
Frontier Capital or possibly
Crest Capital (ie; crest of a wave)
> brent britton wrote:
> A client of mine is asking for suggestions for naming a new VC fund, _blank_ Capital, where "_blank_" is a word or phrase implying all the usual flavors: insight, intelligence, creativity, competitiveness, erudition.
>
>The current frontrunner: Hummingbird Capital
>
>(Yep. I agree.)
>
>Any suggestions warmly appreciated.
>thanks,
>-brent
>mailto:brent@dsllp.com or reply here.Post Reply Reply by Private Message (new win) |
| 05/13/02 | Stop Loss Strategy # |
Keith Butler
|
With all the $$$ that we've tossed into the "black hole" of a stock market these days, I thought I'd share a STOP LOSS strategy that has worked for me over the years:
First: Enter an 8% STOPLOSS under your purch price
@ a 6% Profit- Raise the STOP to the break-even prc
@ a 10% Profit- Raise the STOP to a 3% gain
@ a 15% Profit- Raise the STOP to a 10% gain
@ a 20% Profit- Sell half the position
@ a 25% Profit- Put a STOP in at the 50day mov. avg
From this point, check your position weekly, if the position continues its ascent roll your STOP up with the 50 day moving average.
Remember, it is much easier to bounce back from a small loss than a big loss of say 50% which is not that uncommon these days. If a stock drops 50% that means it needs to rise 100% just to get back to your break even price.... How often does that happen?Post Reply Reply by Private Message (new win) |
| 05/10/02 | re: naming a VC fund # |
Guan Seng Khoo
|
Hi Brent, how abt Vee Capital?
Best,
> brent britton wrote:
> A client of mine is asking for suggestions for naming a new VC fund, _blank_ Capital, where "_blank_" is a word or phrase implying all the usual flavors: insight, intelligence, creativity, competitiveness, erudition.
>
>The current frontrunner: Hummingbird Capital
>
>(Yep. I agree.)
>
>Any suggestions warmly appreciated.
>thanks,
>-brent
>mailto:brent@dsllp.com or reply here.
Post Reply Reply by Private Message (new win) |
| 05/10/02 | re: naming a VC fund # |
Benoit Wirz
|
I like skylight capital... for what its worth.
> brent britton wrote:
> A client of mine is asking for suggestions for naming a new VC fund, _blank_ Capital, where "_blank_" is a word or phrase implying all the usual flavors: insight, intelligence, creativity, competitiveness, erudition.
>
>The current frontrunner: Hummingbird Capital
>
>(Yep. I agree.)
>
>Any suggestions warmly appreciated.
>thanks,
>-brent
>mailto:brent@dsllp.com or reply here.
Post Reply Reply by Private Message (new win) |
| 05/10/02 | naming a VC fund # |
brent britton
 |
A client of mine is asking for suggestions for naming a new VC fund, _blank_ Capital, where "_blank_" is a word or phrase implying all the usual flavors: insight, intelligence, creativity, competitiveness, erudition.
The current frontrunner: Hummingbird Capital
(Yep. I agree.)
Any suggestions warmly appreciated.
thanks,
-brent
mailto:brent@dsllp.com or reply here.Post Reply Reply by Private Message (new win) |
| 05/10/02 | re: Milken Institute conference -- anyone going? (April 22-24) # |
Frank Siereveld
 |
How was the conference?
> Dave McClure wrote:
> I'm going down to the Milken Institute Conference in LA on April 22-24... anyone else going?
>
>If so, lemme know:
> http://www.ryze.org/eventdisplay.php?eventid=149
>
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