Investing in the stock market - Discussion

[Me_]

1 hour ago, nuckin_futz said:

A very wise and knowledgeable post. Mind if I ask how long you've been following markets? Do you trade anything apart from stocks?

 

I use to have a copy of Darvas' book. Not sure what happened to it though. I will have to look for the PDF. Lefevre's "Reminiscences" is a classic. I noticed you did not list any of the "Market Wizards" books by Jack Schwager. Those usually make anyone's list of market related books. I highly recommend all of them. Also, Mark Douglas' "Trading In The Zone" is well worth a read. As is Soros' "The Alchemy Of Finance".

 

Kudos for your chart chart set up. Candlesticks, price, volume and a few MA's. No clutter like Bollinger Bands, RSI, MACD.

 

You sound like you have managed to completely divorce your ego from your trading. That's the whole key to profitability. Some people never learn how to do that. For them it is more important to be right than to make money.

 

Your rules are all very sound. However, I disagree with #9 about the Wall Street sayings. You don't have to live by them but there are some very good lessons to be learned from some of them. One of my favs is "Bulls make money, Bears make money, Pigs get slaughtered" It's very true and a good reminder to not stay at the party too long, so to speak. Also along the same lines "Fattened hogs ain't in luck".

 

One last question. Who do you use as a broker?

I knew nothing about the stock market in 2012.
 

In 2013-2015, I spent around 12 hours a day, seven days a week learning it, building a system, and abiding by the old adage: “an engineer knows when he’s done, not when he can add, but when he cannot delete anymore.”

 

Now that my system is developed, I spend about 45 minutes a night doing what really amounts to accounting, and about a couple of hours over the weekend, mining for other companies (research). In Bull markets it may take 3-4 hours to go through the whole 52-week high list and during Bear markets, it may be a 10 minute job.

 

I don’t trade anything but stocks. If I cannot find a good stock in roughly 4,000 publicly traded companies, it’s a good indication that the risks of loss are immense at that time. So I stay on the sidelines (but keep monitoring the companies I follow).

 

Thanks for the book recommendations. I will definitely read them all. I had forgotten about “The Alchemy of Finance”. I did read that one.

 

I don’t use a broker. Why would I pay to lose control of my money...

 

I have a margin account at Questrade. I make my own financial decisions and I keep full control of my money. Never had a problem with them.

 

They also allow a margin of 3 to 1. Their borrowing rates are super low, trade costs are $5,00 per trade ($5,00 to buy, $5,00 to sell) and the amount of money I make with a trade, combined with the mere month or two I may be invested in a stock makes that the interest rates on margin are close to none.

 

Edited April 21, 2020 by Me_

[nuckin_futz]

1 minute ago, Me_ said:

I’ve followed it since 2013.

 

I don’t trade anything but stocks. If I cannot find a good stock in roughly 4,000 publicly traded companies, it’s a good indication that the risks are immense at that time.

 

Thanks for the recommendation. I will definitely read them all.

 

I don’t use a broker. Why would I pay to lose control of my money...

 

I have a margin account at Questrade. I make my own financial decisions and I keep full control. Never had a problem with them.

 

They also allow a margin of 3 to 1. Their borrowing rates are super low, trade costs are $5,00 per trade ($5,00 to buy, $5,00 to sell) and the amount of money I make with a trade, combined with the mere month or two I may be invested in a stock makes that the interest rates on margin are close to none.

Honestly I am pretty shocked to hear you only have 7 years under your belt. I would say for someone with 7 years experience you have acquired a vast wealth of knowledge. I know people who have been at it way longer than you who haven't come to grips with 25% of what you have.

 

By 'broker' I didn't mean a financial advisor. I meant brokerage firm. I can see someone with your thought process and game plan has no use for someone who knows less than you.

 

Keep doing what you're doing.

 

 

[AriGold2.0]

She's sinking today boys.. The buy is coming..

 

[Warhippy]

Has anyone looked in to tanker stocks?  Companies trading based on transport or holding of oil?

 

With the Saudis trying to flood the NA markets and zero storage capacity you'd have to think stocks in tanker companies would be worth a look

[AriGold2.0]

20 minutes ago, Warhippy said:

Has anyone looked in to tanker stocks?  Companies trading based on transport or holding of oil?

 

With the Saudis trying to flood the NA markets and zero storage capacity you'd have to think stocks in tanker companies would be worth a look

Funny you say that, just yesterday a buddy was talking about Teekay. It’s on the watch list and doing well today, one of the rare ones doing well.

[Warhippy]

36 minutes ago, AriGold2.0 said:

Funny you say that, just yesterday a buddy was talking about Teekay. It’s on the watch list and doing well today, one of the rare ones doing well.

Just seems that storage and transport would be doing well under these conditions.

[AV's Coin]

1 hour ago, Warhippy said:

Just seems that storage and transport would be doing well under these conditions.

What's next storage in rail cars? If it's not already done?

[Warhippy]

16 minutes ago, AV's Coin said:

What's next storage in rail cars? If it's not already done?

It's inevitable.  We're still producing well above demand.  The entire world is stockpiling their strategic reserves but that's almost topped up too.

 

I'm wondering what happens when the next earnings reports and business/consumer confidence charts come out for North America

Edited April 21, 2020 by Warhippy

[nuckin_futz]

36 minutes ago, AV's Coin said:

What's next storage in rail cars? If it's not already done?

They could drain Lake Michigan and put it there.

[Guest]

When demand is high enough, anything will do.  

 

Example: Garbage bins full of piss at the SFU pub nights back in the day when bathrooms had long lineups.  


 

6 hours ago, AV's Coin said:

What's next storage in rail cars? If it's not already done?

 

[Tortorella's Rant]

12 hours ago, AriGold2.0 said:

She's sinking today boys.. The buy is coming..

 

I'm still waiting. The Corona news in the States lately has been "better".. cases dropping, deaths dropping. But I think these idiots lifting restrictions so soon are going to get bit real hard. And the market will reflect that in the coming weeks. It appears Buffet has been sitting on the sidelines with cash the past few weeks ultimately for the same reason - another big drop is to come and we're not out of the woods

[nuckin_futz]

Further to the discussion of the ETF USO............

 

USO ETF reveals it closed at a 36.4% premium to NAV

Tue 21 Apr 2020 23:43:39 GMT

 

What a mess

 

Retail traders are piling into the USO ETF thinking they're bottom-fishing in crude oil. The fund is an absolute mess right now. They stopped issuing new units because they were becoming too large a part of the open interest in futures.

Trading was halted at least four times today and the final time included an announcement that the ETF would shift funds from 80/20 front/second month to whatever mix of oil future it wanted, along with the option to buy gasoline, natural gas and "other petroleum-based fuels".

 

For some reason this set off another misguided rush into the ETF.

 

Now the fund has published its daily holdings and says it holds assets worth $2.06 per share. It's last trade was at $2.81.

 

That's a comically large premium to NAV and means that nearly $1 billion of the $3 billion ETF is a fantasy.

 

As for its holdings -- which are now opaque intraday -- the shift so far is small. Nearly $2.2 billion of the ETF is still in June oil futures but there are pending trades to sell about 40% of that with the vast majority going into the July contract.

 

 

I don't see how this thing survives and I can't understand why brokers would allow clients to trade something at 36% above NAV and guaranteed to lose money. The only sliver of good news here is that by spreading out its holdings among several contracts, it's less likely to spontaneously implode and drag down oil with it.

 

Either that or the things it holds all rally 40% on Wednesday. But if that's the case, I suspect even more retail money will flow in and the premium to NAV will be even greater in the day ahead.

 

****************************

 

Interactive Brokers statement on oil margin losses, circa $88m

Tue 21 Apr 2020 20:31:02 GMT

 

Interactive Brokers statement says several of its customers held long positions in oil contracts on CME and ICE Europe

In a nutshell:

• customers incurred losses in excess of the equity in their accounts
• IB has fulfilled required variation margin settlements with the respective clearing houses on behalf of its customers
• As a result, the Company has recognized an aggregate provisionary loss of approximately $88 million.
• The Company does not believe that any anticipated losses will have a material effect on its financial condition.

----

Heads up, IB will not be by themselves in this. 

 

***********************

 

There will undoubtedly be other brokers who will take hits. If the hits are severe enough some may not survive. In 2015 during the SNB debacle several brokers including FXCM went under. Knowing your broker's financial condition can save you a lot of headaches.

Edited April 22, 2020 by nuckin_futz

[AriGold2.0]

3 minutes ago, Tortorella's Rant said:

I'm still waiting. The Corona news in the States lately has been "better".. cases dropping, deaths dropping. But I think these idiots lifting restrictions so soon are going to get bit real hard. And the market will reflect that in the coming weeks. It appears Buffet has been sitting on the sidelines with cash the past few weeks ultimately for the same reason - another big drop is to come and we're not out of the woods

I know I know.. lol.. Just sparking the morning debate..

 

This is only the minor 2nd dip, the 3rd is coming as well when the USA opens the economy and more people start dying. 

 

I plan to be more active on the backside of that. I personally think the Dow could drop lower then March 23rd.

[CBH1926]

21 minutes ago, nuckin_futz said:

Further to the discussion of the ETF USO............

 

USO ETF reveals it closed at a 36.4% premium to NAV

Tue 21 Apr 2020 23:43:39 GMT

 

What a mess

 

Retail traders are piling into the USO ETF thinking they're bottom-fishing in crude oil. The fund is an absolute mess right now. They stopped issuing new units because they were becoming too large a part of the open interest in futures.

Trading was halted at least four times today and the final time included an announcement that the ETF would shift funds from 80/20 front/second month to whatever mix of oil future it wanted, along with the option to buy gasoline, natural gas and "other petroleum-based fuels".

 

For some reason this set off another misguided rush into the ETF.

 

Now the fund has published its daily holdings and says it holds assets worth $2.06 per share. It's last trade was at $2.81.

 

That's a comically large premium to NAV and means that nearly $1 billion of the $3 billion ETF is a fantasy.

 

As for its holdings -- which are now opaque intraday -- the shift so far is small. Nearly $2.2 billion of the ETF is still in June oil futures but there are pending trades to sell about 40% of that with the vast majority going into the July contract.

 

 

I don't see how this thing survives and I can't understand why brokers would allow clients to trade something at 36% above NAV and guaranteed to lose money. The only sliver of good news here is that by spreading out its holdings among several contracts, it's less likely to spontaneously implode and drag down oil with it.

 

Either that or the things it holds all rally 40% on Wednesday. But if that's the case, I suspect even more retail money will flow in and the premium to NAV will be even greater in the day ahead.

 

****************************

 

Interactive Brokers statement on oil margin losses, circa $88m

Tue 21 Apr 2020 20:31:02 GMT

 

Interactive Brokers statement says several of its customers held long positions in oil contracts on CME and ICE Europe

In a nutshell:

• customers incurred losses in excess of the equity in their accounts
• IB has fulfilled required variation margin settlements with the respective clearing houses on behalf of its customers
• As a result, the Company has recognized an aggregate provisionary loss of approximately $88 million.
• The Company does not believe that any anticipated losses will have a material effect on its financial condition.

----

Heads up, IB will not be by themselves in this. 

 

***********************

 

There will undoubtedly be other brokers who will take hits. If the hits are severe enough some may not survive. In 2015 during the SNB debacle several brokers including FXCM went under. Knowing your broker's financial condition can save you a lot of headaches.

I was just looking at USO and my brokerage account has blocked buying or selling it.

[nuckin_futz]

2 hours ago, CBH1926 said:

I was just looking at USO and my brokerage account has blocked buying or selling it.

I don't think they should block people from buying and selling it. If people want to trade it on a cash basis, let them.

 

However, if I am the brokerage I am either greatly increasing margin requirements or making USO unmarginable.

[AriGold2.0]

Free tip to all you cool cats and kittens. DECN is working towards FDA approval for a self test Covid kit. 
 

Just got 5000 shares at .26

 

Edited April 22, 2020 by AriGold2.0

[NucksPatsFan]

37 minutes ago, AriGold2.0 said:

Free tip to all you cook cats and kittens. DECN is working towards FDA approval for a self test Covid kit. 
 

Just got 5000 shares at .26

 

Questtrade won't let me buy. Says its an OTCN? 

[AriGold2.0]

11 minutes ago, NucksPatsFan said:

Questtrade won't let me buy. Says its an OTCN? 

I have no idea what that means. I got mine through my TD webroker account and had no issues. I paid .02 more per share for the purchase but had faith.

[Warhippy]

33 minutes ago, AriGold2.0 said:

I have no idea what that means. I got mine through my TD webroker account and had no issues. I paid .02 more per share for the purchase but had faith.

what?  How?

 

I have a TD web broker account and it refuses to allow me to buy it.  Walk me through your steps because that's a fast riser and if the FDA approves they'll be a 5x earner

 

[nuckin_futz]

1 hour ago, NucksPatsFan said:

Questtrade won't let me buy. Says its an OTCN? 

OTC stocks are typically garbage that do not or cannot meet the listing requirements of NYSE, Nasdaq etc. Commonly referred to as Pink Sheets or "Pink Sh*ts".

 

53 minutes ago, Warhippy said:

what?  How?

 

I have a TD web broker account and it refuses to allow me to buy it.  Walk me through your steps because that's a fast riser and if the FDA approves they'll be a 5x earner

 

I assume somewhere in the account settings you might have to acknowledge that you are aware trading OTC stocks is more risky than usual and that it's basically a free for all with no rules and no regulation. And request a trading permission. Just a guess though.

 

That's not to say money cannot be made trading these things.

Edited April 22, 2020 by nuckin_futz