Saturday, July 12, 2008

The Weekend Trader (Beta Column)

Two of my favorite columnists are Mike Lupica (NY Daily News) and Bill Simmons ( Mike's got a great recurring weekend sports column called "Shooting from the Lip" where he talks about random -- but relevant -- thoughts at the end of the piece. It's a great read, even as a Boston fan. On the other side, Bill writes outstanding and humorous pieces about his experiences -- high and low -- of being a Boston sports fan. As we enter down this new blog journey, I'm going to incorporate a little of both. So let's start:

Why the Blog?
Three reasons. But let's start with the first two: (1) It's fun, and (2) I enjoy writing. Many know that I used to write daily trading columns for a major online trading publication, but that grew old as my market energies were directed away from trading and the necessary R&R during downtimes. I also hated editors challenging my ever-so-candid market views about snake oil columnists & chatroom salesmen who don't trade. Here, there are no editors, deadline pressures, or hidden product selling agendas. Feel free to submit comments and I'll look at all of them as I can. It will be fun to see how this spreads simply by word of mouth. I'm also going to experiment with some You Tube stuff.

Reason 3? I was seriously thinking about publishing a book in 2009 that chronicled lessons learned in accomplishing my self-imposed $1M trading goal (net of expenses) this year. [Why the goal? Why do people climb Mt. Everest? I guess I needed a fresh, new incentive to go with the new 2008 ceiling-removing mindset.] Then I thought, wouldn't sharing thoughts live as the year progresses be a more helpful tool? The only self-benefit I see at this end is to help me stay focused on my goal while renewing friendships with many of my industry friends. Heck, whatever floats your boat.

Hey, if Curt Schilling can have a blog, why not?

Playing Defense
When the Celtics won the championship this year, they won largely by playing defense. In fact when the trophy presentation was made at the new Boston Garden last month, the fans actually chanted "DEE-FENSE". Well on Monday, I forgot to play defense. Didn't have my feet planted, let LeBron James and Kobe Bryant go right by me time after time, and couldn't get any offense going either. Yet by Friday afternoon, my defense was back on track which -- as is the case in sports so many times -- then drove the offense.

Case in point: I had planned on staying on the sidelines Friday afternoon and was actually writing Friday's blog entry when Bernake came out with some market-moving comments. Truth be said, any match would have sparked a mammoth short cover rally given the oversold conditions and reduced Friday PM liquidity, even if it was Jim Cramer blowing his nose. Anyway, I saw the spike approach its first "this is ridiculous" unsustainable spike at about 2:50pm ET, got off the bench and shorted, covering quickly into the retracement. Then it was back to the bench ready to head for the shower for the second time, but keeping one eye on the game. Then, as ES got completely out of control at about 3:06, I got the second short off within a point of its peak, again covering on the retracement -- albeit more slowly this time. In the process, I had to keep changing my EESM attainment logged in yesterday's post from 39% to 45% to 53%.

What did defense have to do with it? Plenty. Given a similar situation on Monday, I was active in the market at the time, providing liquidity as I did throughout the day, and didn't react to the charging Kobe -- again and again. On Friday, I was simply staying in the backcourt and not participating in the offense at all until all five players from the other team (we'll call them the "Lakers") literally collapsed on the court and then someone handed me the ball. Oh, sort of like the Celtic's Glen Davis going through all five of the Lakers at the end of the Game 6 obliteration. In both cases my timing was exceptional. I also chose to lay the ball in both times -- in terms of size and holding time -- versus risking an unnecessary injury on a slam dunk right before the weekend.

Defense wins championships. As we journey toward the end of this year, I expect to give you a million reasons why.

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