Stocks-Rider

In the end, agility wins

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Okay I admit its been a while but really why would you have listened to someone who was ranked 500 unless my writing gave you goose bumps. But now that I have received a slightly more respectable position (50ish) I feel more comfortable about my rants. Here is why you should pay attention to me and what I have to say in the following paragraphs. First and foremost, it might benefit you. Second, it wasn't achieved overnight or by just trading couple of high volatile stocks. I have been gradually lurking up higher changing my strategy and keeping it as nimble as I could. This is the result of some blood, sweat and manual stop orders.

I definitely aim to come in top 10 and higher. I don't have time on my side. But I have renewed confidence.

First a quick flashback on reasons for my improvements that I think you may find useful. Why did I get higher percentage return? - (a) I finally decided to spend some time on Marketocracy instead of being a passive participant, (b) I decided to trade in and out instead of letting the positions languish given the high volatility of the markets, (c) I exploited the earnings seasons to place trades on companies that I was extremely confident of posting good results. Sometimes it backfired but for most times it netted me double digit returns., (d) Finally I built hedges in my portfolio by buying ultrashorts like TWM to avoid a free fall with the markets during down days.

Now on to Future. It is really a tough job predicting markets and every market timer is sweating in his pants. Most are predicting we have hit a bottom. But does it really help in a contest that is going to end in a month? A bottom takes weeks to form. So lets just forget about predicting business for the time being and focus on the few precious weeks remaining. Keep in mind it is excessively frustrating for active traders when time is limited and on top of it, there are these darn big range days going in both directions.

So what has worked for me in the latter half of this competition is to increase my agility in terms of pulling the plug sooner than later. Besides, the ability to not let your good trades languish for a longer time is safer and more profitable in this atmosphere. Seems obvious this strategy would have been useless had this contest been held in the first half of this year. It may have still netted you gains but you would have missed all important upswings.

Needless to say, it is important that the strategy you follow needs to change with the changing markets. I believe this and the ability to cut your losses are the two most important ingredients of a successive portfolio.

My latest positions are a result of this. Here are some comments on the open trades:

DKS: This is one of the few trades I have held for a long time. In my prior post I had mentioned that any positive announcement would send the shorts for cover big time given the percentage of float that is shorted. This is exactly what happened when DKS declared a 2:1 split in October. The squeeze practically murdered the sellers.

ISRG: My darling. I got this one before the earnings as ISRG has demonstrated a really good success rate with positive announcements and optimistic guidance. They did not disappoint in October. To top it all ISRG obediently languished for some time to form a solid base before surging again. I had anticipated this and hence I never sold ISRG even in the worst of markets.

GLD: Hedge bet

TWM: Hedge bet. Ultrashorts on Russell2000. You know they accurately say that when the atmosphere gets bearish, the small caps are the first victims that get sent to the altar.

DELL: Play upon earnings to be released this week

CHK: Steady rider, good company and play upon natural gas' increasing dominance. It has been declining recently but I am still not taking it out as it has just hit the 200 day. I love 200 day MA. I am hoping a bounce is on the cards in days to come.

SNDA: One of the few Chinese stocks I like. They are releasing earnings this week

AAPL: Christmas. iPod. iPhone. Leopard. Crazy followers. Potential Post Fed bounce. 'Nuf said.

SYNA: Love this stock. Just look at the charts. Very positive earnings. It shot up but it has come down without violating any of the technical levels. I consider this value as an excellent entry point.

MOO: Ever wondered how can you cash in on agriculture boom without knowing much about any one stock. This is the ETF for an Ag play.

DVY: As people are getting out of riskier stocks and the headline risk still remains, they are looking for defensive plays. DVY is a good example of that.

PCU: Okay this one was bad. But I can't remove it. Because this stock too is touching its 200 day MA. Anymore fall and it is out.

I hope my thought process and my picking rationale would have helped you in your own selection process. I would love to hear from you - praises, boos, questions or a silly smirk. Bring it by.

Krish