Monday, June 7, 2010

Still Short...

While May was the worst month the stock market had since like 1940, I made out like a bandit. I see absolutely no reason why anyone should be long in this unstable environment. That being said, I plan on selling my shares of DOG when they get up around $75. This, unless something catastrophic happens that warrants my attention and brilliance (kidding), will be my final blog post for 'Trading to Fund Mission Trips'. My life has become as volatile as the markets over the past year (Personal VIX hovering just above 50), and I'm becoming increasingly more involved with various ministry projects (leading a team to Haiti in July and founding a Men's Discipleship Organization). I've enjoyed, and still plan on keeping up with, your posts. It's nice seeing some of you (that I follow) pick up trading and blogging again after a long hiatus. That may become me one day, but for now I'm content with just watching...

Tuesday, October 6, 2009

It's Me, Your Resident Permabear

Do I still have a bit of egg on my face because of THIS post? Sure. I'm in great company though, and still believe the stock market will catch up to the real world economy soon enough. Here are some links to articles and quotes from so-called experts, all pretty much singing the same tune: There will be no V-shape recovery. Make sure you scroll to the bottom for 'Signs of Being a Permabear' :-)

“There’s a lot of risk going ahead of some big bumps. There’s a very big risk that markets have been irrationally exuberant.”

-Nobel Prize-winning economist Joseph Stiglitz

  • George Soros says the U.S. banking system is "basically bankrupt," in sharp contrast to Goldman's upgrade of the large banks.

  • Nouriel Roubini says "markets have gone up too much, too soon, too fast," and will retreat when economic news refutes the V-shaped consensus, Bloomberg reports.
  • Joseph Stiglitz told Bloomberg TV investors have become "irrationally exuberant" about prospects for a recovery. "There's a lot of risk...ahead of some big bumps." Current Roubini post HERE!

  • Christopher Whalen tells Tech Ticker the fourth-quarter will be a "bloodbath" for banking as says stocks rallying while the "real economy is dying" is not a healthy sign.
  • Meredith Whitney warned about the likelihood of a second credit crunch, especially for small businesses, a WSJ op-ed last week.

10 Signs We May Be Headed For An October Crash
Click on Signs to Read More

You Know You are a Permabear When…

Each time the market rallies, you declare it an “unhealthy sign of speculative excess”

The great majority of chart patterns always appear to be either rallies in a bear market or an imminent major top.

CNBC asks you to appear as balance to the optimistic Bull guests.

Good economic results are bad for the market – it will cause the Fed to keep raising rates; bad economic results are bad for the market -- its proof of the coming recession;

Sideways moves are actually just “setting up the market for the next down leg

You still rail against Nixon for taking the US off the gold standard;

Your colleagues think you should become a fixed income portfolio manager.

All the anecdotal evidence you see reveals excessive bullishness;

You have trouble sleeping when you take a long trade.

1. On days when gold prices drop, it's due to a government conspiracy;
2. When gold prices rise, it's because central banks have finally lost control of manipulating the gold market. Either that, or the masses have finally figured out their fiat currency is just paper.
3. If gold drops again the next day, see #1.

When companies make quarterly earnings estimates, its bad because a) its already built it, and b) its evidence of earnings management. Missing earnings, on the other hand, is bad, because, well, its bad.

You criticize any analyst that upgrades a stock from “Strong Sell” to“Sell”

The Yield Curve Inversion is a sure sign of the coming recession; As the inversion flattens, however, you note out how negative higher 10 Year Yields are for stocks;

Positive market commentary is evidence of “complacency” and proof that the market must go lower;

Any 10% rise in an stock is a “great shorting opportunity;”

You blame market rallies on ignorant bulls “who just don’t understand;”

You short anything that is in your parents' retirement portfolio – and are determined to outperform.

Special Thanks to Yahoo Finance,, and for content.

Friday, October 2, 2009

Trading Like 007

If you remember THIS post, you know I'm intrigued by the spy genre (borderline 'obsessed' around the time a new Bond film releases). While watching the newest 007 installment, Quantum of Solace (for the second night in a row...really, what's wrong with me?), I couldn't help thinking about how his life relates to stock trading. In almost every adrenaline-filled, pulse-accelerating situation, his training seems to summon 3 distinct reactions: He looks before he leaps, takes calculated risks, and always protects his assets.

Look Before You Leap

There are countless scenes, especially with the new, physical Daniel Craig, where Bond has to make a split decision. The consequence of that decision could prove fatal, had he not been
trained by MI6 (British Secret Service) to react quickly and decisively in life threatening situations. Any Bond/Bourne fan can recall countless times where a jump from a window, dive into/onto a moving vehicle, etc., was made only a spilt second after the protagonist saw his opportunity. Keep in mind, it's part training, part instinct (Not everyone can be trained to be an effective assassin).

There is a direct correlation to trading stocks. In the heat of the moment, it's all too easy to jump on board a skyrocketing ticker or hit the buy button in order to catch a falling knife without really knowing what you're getting yourself/money into. This is happening all too often, now that some trading platforms allow traders to (almost blindly) follow the trades of others. There are known traders such as Timothy Sykes, Investors Underground, and now Reaper, who have many followers/leapers/minions doing just that- following their trades without looking. While they may be lucky enough to begin that bonehead practice with some gains, it just doesn't work long term. They must know what they're looking at/for in order for their leaps not to completely ruin them.

Take Calculated Risks

Bond learned a hard lesson in Casino Royale when he was wiped out during a game of Texas Hold 'Em-style poker. LeChefre, the film's main antagonist, had fooled 007 by faking a tell (Manuerism that let's your opponent know whether or not your bluffing). Bond in turn goes all in, and subsequently loses his entire bankroll (To be accurate- the UK's bankroll).

Being able to properly manage your trading account's risk, or % of your total assets you trade with in a given order, is a make-or-break ability- which can and most certainly should be learned. I can't tell you how many times I've heard (and let's be honest, I'm guilty of this myself) someone say this type of sentence, "That one trade wiped out my entire week's/month's gains". Knowing how much you're willing to lose before ever leaping into a trade is a calculation every trader must know for himself/herself. Furthermore, one must be willing and able to execute an exit order if that threshold/risk level is reached.

Protect Your Assets

No matter what situation Bond finds himself in, he always manages to protect his most sacred assets: loyalty to her majesty, and himself. At times, he's forced to leave women, friends, Astin Martins, etc. behind so he can live to fight another day. Also, he seldom allows
himself to lose sight of his exit strategy simply because he's in the heat of battle.

With stocks, it's important to stick to your trading plan unless outside forces put your assets at risk. As you've probably noticed by now, the 3 qualities of a good secret agent and stock trader are virtually interchangeable. By looking before you leap, you're calculating your risk and protecting your assets. By protecting your assets, you are assuring your ability to take the next leap, and so on and so forth. Learn from the qualities that have kept James Bond from succumbing to the 90% mortality rate of other 00's.

Never wanting to be among the 90% of traders that lose money,

Evan (aka Island Minister)

Friday, September 4, 2009

Don't Fear the Reaper

As most of you know, I've been following Timothy Syke's trading style for almost two years. I first saw him on Wall Street Warriors (Mojo HD network show about various traders/investors) a few years back, and enjoyed his brutal honesty and knack for profiting from penny stocks. Here's a pic of me reading his first book, An American hedge Fund, while on a mission trip to the Amazon region of Brazil last summer. His trading abilities are only trumped by his business saavy (as he's currently growing an empire built on stock alerts, DVD and book sales, and even a publishing company called Bullship Press, LLC). Needless to say, his ship has sailed and, to most penny stock pros, needs no introduction. As for the title of this post, I introduce you to Michael Goode (aka Reaper), a padawan/apprentice of Master Sykes. I began shadowing Reaper on various trading sites such as Tim's and Investor's Underground. He always posted intelligent questions and comments, and his increasing profits could not be ignored (he's even been featured in some of Tim's posts like THIS ONE).

I'm pleased to say that Reaper himself has built a very nice looking website (Pallian would be proud ;-), and posts a well researched watchlist and ongoing video teaching series. Lucky for us, it's FREE (well, for now at least). below is a video from just a few days ago where he not only confidently explains the technicals of VG (Vonage), but also correctly predicts the following day's price action. He was dead on, and I'm excited to continue my own apprenticeship under this up and coming Master Trader. Enjoy the embedded video (very informative once you get passed his music preferences), or click HERE to check out his site (and don't forget to buy him a cup of coffee using the link on the right-hand sidebar of his homepage).

Successfully merging Blue Oyster Cult and Star Wars references,

Evan (aka Island Minister)

Saturday, August 29, 2009

Web 2.0

"Web 2.0" refers to web development and web design that facilitates interactive information sharing, interoperability, user-centered design[1] and collaboration on the World Wide Web. Examples of Web 2.0 include web-based communities, hosted services, web applications, social-networking sites, video-sharing sites, wikis, blogs, mashups and folksonomies. A Web 2.0 site allows its users to interact with other users or to change website content, in contrast to non-interactive websites where users are limited to the passive viewing of information that is provided to them. Thank you Wikipedia :-) For the full definition, click HERE. (I've left the links in just in case you wanted to look up the things Wikipedia assumes you might want to look up)

So why am I even taking time to post about Web 2.0? If you're into stocks, finance, missions, cooking, whatever- technology WILL NOT WAIT FOR YOU! I've found out the hard way sometimes, since I'm usually a laggard when it comes to hopping on the bandwagon (ie. Facebook, Twitter, etc.) Whether you're trying to figure out how to access Think or Swim from your iPhone, or wondering how to embed an RSS feed into your website- you need to keep up! This brings me to my next point (and thanks to Charlie G., who unfortunately for us has taken some time off from blogging, I know I'm not alone in my thought process):

Stop being lazy! This not only goes for your trading, but EVERY aspect in your life: physical fitness, diet, relationships, education, etc. I've lost my night job recently at a Christian Bookstore because of a little thing called bankruptcy, and have found myself with more time than I know what to do with! Since I began seriously trading and investing for mission trips almost two years ago, I've wanted to have more time to devote to these two passions. Well, my mom always says, "Be careful what you wish for". Now it's game on! I have the time, so let's see what I'm made of. I built some exercise equipment yesterday (one big piece with dip bars and a pull-up bar), and have been working on my ministry website (it's actually a small business that uses t-shirt sales in order to fund youth mission trips- I've just been neglecting it for years).

I guess what I'm trying to say (if anyone is still reading at this point :-), is that there's no better time than the present to pursue your goals- but it takes work, patience, and perseverance (no, I did not get that from a fortune cookie). Web 2.0 pretty much personifies what I'm talking about. There are people building empires using the new social networking sites and tools anyone reading this blog has access to. I'm serious, now matter what your passion is, it can be enriched by the computer you're using right now! I'm well aware that most of my readers are traders and investors in the stock market- use the new tools available on the web to quicken your learning curve. The other day, JEDM was in play and went supernova- small fortunes were made. You know how I heard of it? A tweet from Timothy Sykes I saw come across my Facebook home page.

Now, I'm not saying everyone should be a web 2.0 junkie and have a blog, tweet all day long, update their Facebook status hourly, and/or get rich from building numerous websites full of ppc (pay-per-click) ads. I just know it's enriched my life. Feel free to share any new ideas or apps you find helpful from the wonderful, widget-filled world of Web 2.0!

Waaay too much time on my hands,

Evan (aka. Island Minister)

Wednesday, August 12, 2009

What I Believe...

Don't worry- I'm not about to go into a long dissertation on why I am a Christian (even though I'd be happy to if anyone was interested). This post is about my belief that the market will correct and retest the March lows. The reasoning could stem from something as simple as everyone saying 'the worst is over' and calling march the absolute bottom for decades to come, to following the Elliot Wave theory and strictly using technicals. Since I'm not a saavy enough analyst yet to map out the Wave's peaks and troughs or chart how the dollar is bottoming, I'll just let you watch one of countless videos bouncing around in my head that seem to make sense. When everyone around you is bullish (especially non-traders), it's time to protect your profits!

Long DOG, EVFL & SUNV (these two are purely speculative),
Up to my neck in wedding plans,

Evan (aka Island Minister)

Thursday, August 6, 2009

Back from the Motherland and Still Bearish!

I'm back from the mission field, newly engaged, and still waiting for the market to correct itself. My last post taught me a valuable lesson- NEVER CALL A TOP! For a while, though, I looked like a genius- the DOW retraced to 8200 before the current rally ensued. I'm not calling the top, but definitely agree with THIS article. I understand debt (my knowledge on the subject has increased exponentially along with most other Americans the last couple of years), so I know there has to be some sort of reckoning for the carelessness of both the private and public sectors over the past few decades. Again, THIS Seeking Alpha article is pretty good at nailing the details.

Thanks for the prayers and e-mails many of you sent me last month while I was away. Here's a pic of my fiancee and I, at what we hope will the location of our wedding. As for the mission trip- it was FANTASTIC! You're welcome to view all the pics HERE, as well as THESE pics from Paris (where I proposed at the Eiffel Tower). I've been working on the Island Ministries website since I got back (that's the company I started to help fund youth missions), and plan on putting a team together to go down the Amazon next summer. Interested? You can see pics from last year's Amazon trip HERE. I've also added a cool 'Tip Jar' type of application to my main trading SITE. For $5, anyone can advertise their wares. Timothy Sykes I 'aint (He's made about 50k trading in just under 2 years, and hundreds of thousands from Ad revenue and selling his products), but every little bit helps:-) As for the following video, all I can say is this- you have to be able to break loose sometimes. I thought about titling this post 'Michael Jackson's Alive and Well in Zimbabwe', but I thought that might be in bad taste. Enjoy!

Zimbabwe Moonwalk from Evan Dawson on Vimeo

Learning new tricks every day,

Evan (aka Island Minister)