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Thirty Reasons Why I'm Long Stocks
I am not posting any actual numbers or charts here for two reasons. First, I get them from a variety of sources and they are not all free so I can't legally post them here.
Second, and more important, you have to do your own work, and see them yourself for it to have impact. Check what I'm saying here- most of the data is publicly available for free on the internet- or your Bloomberg.
So here is my list of reasons why I think being long stocks in size makes a lot of sense.
Dig further and see if I’m wrong.
Connect the Dots- Meet Siri
In Steve Jobs' famous Stanford commencement speech, he claims that many key events in life are only understood in retrospect. You can only “connect the dots” by looking back. He uses an example from his own life in which he dropped out of college, but hung around and took classes on calligraphy, which must have seemed frivolous at the time, but instead ended up in the first Apple operating systems, and later in Microsoft Windows.
Traders Library: "The Way of the Turtle"
"Master traders read." Ari Kiev.
Way of the Turtle. Curtis Faith, written in 2007.
Back to School Reading: "Trading in the Zone"
The greatest investors continue to read and learn, honing their craft as markets change, always adapting and evolving.
One of the best books I’ve ever read on trading is Ari Kiev’s “Trading in the Zone.” Kiev is said to often coach the crew at the famously successful and secretive hedge fund SAC. This is the most valuable, useful investing book I’ve read in the last decade- if you are serious about improving your skills, you must read this volume.
Chill Out and Study History
Learning from history. It doesn’t repeat, but it rhymes.
Everyone is talking about how stocks are sure to drop if the debt ceiling doesn’t get raised. Financial calamity is sure to ensue as the government “shuts down” or defaults on its debts. So it’s a great time to sell all of your stocks, especially the good ones.
Let’s look at history first before we blindly follow the crowd.
Trend Commandments: Religious Fervor with a few nuggets there
All great investors READ. They read constantly, even books by others that may or may not be as accomplished as they are. Constantly learning, improving, honing their skills.
Kindle Capers: A Review of Altucher's "How to be the Luckiest Person Alive!"
Kaizen. CANI. "Constant and Never-ending Improvement." The best investors I know READ. They read constantly, looking for clues from other successful people. What can sets apart the elite from the merely good is often a "game of inches."
James Althucher put some of his best ideas into a book which I bought on my Kindle for a buck. Wow- what a great use of time and money.
A Trip to the Library: The Art of Short Selling
Some investment books are very expensive, claiming to offer some amazing insights. You know the type- a normal hard-cover book sells for 20 bucks but these sell for $100 or even $1000 in the case of “Margin of Safety.” As a “value investor” at heart, I don’t like to pay these kinds of prices for books. The New York City library often has them, but only at the fabulous SIBL library on 34th Street. They will not let you check them out (since they know people will steal them) but you can read them in the library.
What I CAN say with certitude
Like politicians, I cannot say much with "certitude" but I will note the following:
The Mother of All Pair Trades
I despise the idea of shorting an index against your long positions, just to call yourself “hedged.” This is nothing more than market timing, because when you decide to add the short is purely based on your guess of where the market will go.
Technical Analysis is Nonsense!
But it works!
We sold SWKS yesterday mainly because the chart was so bad. Despite fundamentals that seemed good, I just couldn't figure out what was wrong with stock. Now we know why- they just announced a big acquisition today, buying AATI, which closed at $3.95, for $6.12. As I write this, the stock is down 6.5% on the news. How did I "know" this? Was it inside information?
No- it was a look at the charts.
Heavy Lifting, Indeed.
"Heavy Lifting"
It was another tough quarter for Cisco. This one statement from the earnings call sums it all up: "We have gone from 42 boards to 13." This fat, complacent company has a hairball management structure that has led to decisions like buying Flip Video and watching RVBD, JNPR, and APKT steal all their business.
"Sucker Punched" by Critics. Again.
Movie critics remind me of Wall Street analysts. They make sheep seem like independent thinkers in comparison. “Sucker Punch” was such an easy target for them- the name itself was perfect for snarky reviewers. Most of them didn’t even get their basic facts right- they wrote “the movie was set in the 1950s” or “I couldn’t follow the plot” or “attempted rape” or other nonsense.
POMO-Schlomo: "How I learned to love BerNANK and quit worrying about the end of QE2"
Why the end of QE2 doesn’t matter.
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