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Monday, August 31, 2009

Monday Challenge Project Summary: August 31, 2009 (VIDEO)

Previous Challenge Project Balances:

Investing Account Balance: $481.73
Stock / Futures Trading Balance: $1,521.21
Online Savings Balance: $150.15

The original video explanation of the Challenge Project is to be found here.

Rule No. 2 of the Challenge Project states that each month, we can divvy up $100.00 as we wish between the various challenge project accounts. Some time ago I stated that I may split up Rule No. 2, into weekly segments; or, $25.00 a week.

The investing account continues to hold on to the SPY hedge option. I will be adding equity to this account in the near future. As I stated last week, I want to begin focusing on increasing the capital in the Challenge Investing Account. But ... not this week. As a matter of fact? I'm not going to send any money to the Challenge Project Accounts this week.

Why? Well, I'll discuss that in the video entry below ...

(Video Included. If you're seeing this entry elsewhere and cannot play the video? Click this link to go to the exact blogged vlog entry ...)



So the account balances, at this point, read as follows:

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $490.53
(YTD cash equity up about 0.98% Return is about -16.4%)
  • 4.1064 shares of KO
  • 3.0301 shares of JNJ
  • 1 SPY 80 Put - September Hedge
  • Cash: $89.12
  • Additional $37.53 available from slush fund
Stock / Futures Trading Balance: $1,521.21
(YTD cash equity up about 50%. Return on Capital is about 2%)
  • Additional $37.53 available from slush fund
Online Savings Balance: $150.15
(YTD cash equity up about 22%. Return on Capital is about 1.49%)
  • $37.53 for a Slush fund / Drawdown Kill Switch fund
  • $75.09 for a base savings
  • $37.53 for Emergency Savings
We'll be back to the Challenge Project, next Monday ...

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Saturday, August 29, 2009

Week in Review: Self Examination Lessons with Trading Psychology (PODCAST)

"There are three things extremely hard: steel, a diamond, and to know one's self." - Benjamin Franklin

Welcome to the Week in Review!

After a review of the markets, and some thoughts I have in regards to specific trades?

I will discuss the need to always examine pressures that could have an affect your trading, and some of the pressures that I'm facing; while wondering if it will have any adverse effects on my own trading efforts ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to Download this Podcast

Trading is a 'mental' business. It's a business in which psychology is a primary part. Therefore, if you are a trader? You must review any outside influences that may have an adverse affect on your 'mental' game.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Friday, August 28, 2009

State of the Economy: Concluding Comments and Trader Thoughts (VIDEO)

"Chance favors only the prepared mind." - Louis Pasteur

For the last few weeks, I've been discussing the current "State of the Economy". I discussed what I see as the "Ministry of Truth" and the power that they have within the economy.

I then discussed "where we are at", as well as possible scenarios that I see developing within the economy. I've discussed what I believe an actual 'recovery scenario' would look like (as opposed to what the mainstream financial media would like to feed people that a recovery scenario looks like).

I've discussed another scenario, in which I discussed what I believe deflation in asset prices would look like, in a 'round 2' of deflation. On the flip side of that? I discussed what a U.S. Dollar Currency Inflation Crisis would look like ...

Now, we're going to wrap up this series of videos, as well as some other 'trader thoughts'

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



I'll be appearing on the Davian Letters Happy Hour Show tonight, over at Dimdim to talk commodities ...

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Tuesday, August 25, 2009

Freak Monster Mutant Tomatoes (Wasn't there a movie about that?)

Hmm.

You know, I really, really wish I liked tomatoes. I eat them if they've been put into a salsa, or a chili. Or perhaps if they're made into a tomato Paste. But I'm not one for huge slices of tomatoes. I hate them as a matter of fact.

It's too bad too, because the tomatoes that are coming out of our garden? Are so beautiful and perfect, they don't look real.

And it's not as if we don't have enough of them. This is only a portion of our half, after splitting our share from our friends ...


I swear to you that our bell yellow totato plant is over 6 feet high. There are hundreds and hundreds of the things.

I did put two of them to good use, and tried to be a good husband by fixing my wife a couple of B.L.T.'s this afternoon. She acted as if it was delicious.

I really, really wish I liked eating raw tomatoes ...

Monday, August 24, 2009

Monday Challenge Project Summary: August 24, 2009

Previous Challenge Project Balances:

Investing Account Balance: $481.73
Stock / Futures Trading Balance: $1,521.21
Online Savings Balance: $125.15

The original video explanation of the Challenge Project is to be found here.

Rule No. 2 of the Challenge Project states that each month, we can divvy up $100.00 as we wish between the various challenge project accounts. Some time ago I stated that I may split up Rule No. 2, into weekly segments; or, $25.00 a week.

The investing account continues to hold on to the SPY hedge option. I will be adding equity to this account in the near future. As I stated last week, I want to begin focusing on increasing the capital in the Challenge Investing Account. But ... not this week.

For this week, the $25.00 weekly deposit is being transferred to the Savings Account. Last week, we sent the $25.00 to the Trading Account in what I termed a "last push for the trading account equity". Consider this weeks deposit a "last push for savings account equity". This will increase both our base savings, our emergency savings (well, it's "sort" of emergency savings. It just is there to prove the point that you should have one). In addition, this increases the amount available for our drawdown kill switch for both the investing and trading account. Which in turn allows us greater mobility when it comes to investing and trading.

So the account balances, at this point, read as follows:

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $490.53
(YTD cash equity up about 0.98% Return is about -16.4%)
  • 4.1064 shares of KO
  • 3.0301 shares of JNJ
  • 1 SPY 80 Put - September Hedge
  • Cash: $89.12
  • Additional $37.53 available from slush fund
Stock / Futures Trading Balance: $1,521.21
(YTD cash equity up about 50%. Return on Capital is about 2%)
  • Additional $37.53 available from slush fund
Online Savings Balance: $150.15
(YTD cash equity up about 22%. Return on Capital is about 1.49%)
  • $37.53 for a Slush fund / Drawdown Kill Switch fund
  • $75.09 for a base savings
  • $37.53 for Emergency Savings
We'll be back to the Challenge Project, next Monday ...

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Saturday, August 22, 2009

Week in Review: The Stock Market Rally, Recovery, and the Economy (PODCAST)

"Wall Street people learn nothing and forget everything." - Benjamin Graham

Welcome to the Week in Review!

The Stock Market climbs higher still ...

And for some reason? Talk of "recovery" is being linked to this stock market rally.

After our 'market review', I'll discuss that in this weeks "Week in Review Podcast". Just click play !

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to Download this Podcast

Here is the link to the discussion with Mark Douglas that I believe is so key for new traders to review.

It discusses what I have mentioned many times:

"It's not about the one trade. It's not about this trade. It's about the many trades"

Now, moving on to what I discussed later in the podcast? Here is a picture of the current Unemployment Rate in the United States, since talk of recovery began:



Here is a picture of the Unemployment Rate where I live, in Michigan, since talk of "economic recovery" began:


If anyone could possibly point to a credit-led recession where the recovery began before unemployment began to improve? Hey, I'm all ears.

Just remember. The actual, working economy? Is not the stock market. And the stock market? Is not the actual working economy. Eventually, fundamentals and the data meet. But if we remember our recent history of 1999? The stock market may just take it's sweet time meeting up with those fundamentals.

Especially on a rally, that has less and less volume as each day passes.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Thursday, August 20, 2009

State of the Economy: Scenario #3 - U.S. Dollar Currency Inflation (PODCAST)

"Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man." - President Ronald Reagan of the United States

For the last few weeks, I've been discussing the current "State of the Economy". I discussed what I see as the "Ministry of Truth" and the power that they have within the economy.

I then discussed "where we are at", as well as possible scenarios that I see developing within the economy. I've discussed what I believe an actual 'recovery scenario' would look like (as opposed to what the mainstream financial media would like to feed people that a recovery scenario looks like).

I've discussed another scenario, in which I discussed what I believe deflation in asset prices would look like, in a 'round 2' of deflation.

I had mentioned as well, that I would in the future discuss a "credit default" on the U.S. Dollar and what it would look like, resulting in high inflation. But the more I sat and thought about that title? "Credit Default"? I decided it was inaccurate. Therefore, we'll call this "U.S. Dollar Currency Inflation", and what it would look like ...

I discuss that scenario in the following podcast...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Monday, August 17, 2009

Monday Challenge Project Summary: August 17, 2009

Previous Challenge Project Balances:

Investing Account Balance: $490.58
Stock / Futures Trading Balance: $1,496.21
Online Savings Balance: $125.15

The original video explanation of the Challenge Project is to be found here.

Rule No. 2 of the Challenge Project states that each month, we can divvy up $100.00 as we wish between the various challenge project accounts. Some time ago I stated that I may split up Rule No. 2, into weekly segments; or, $25.00 a week.

As far as the investing account, trust me, I will be adding equity to this account in the future. I would love to have about $700.00 cash in that account come this November 1st. Of course, if we added money every week from now until November, it would not give us $700.00 worth of cash. Possibly, a little over $380.00 worth of capital to work with. $700 is simply the 'preferred goal'. We can work with $360.00.

Then why make a goal of over $700.00? Well, I'm stating right now, that if I have continued successes in the trading account? I will funnel those profits over to the investing account.

For this week, the $25.00 weekly deposit is being transferred to the Trading Account. Yes, I know the time between now and November 1st is just ticking away, and that I said that I wanted to be beefing up the investing accounts cash balance. However, since I know I'm going to be doing that, I have to beef up the trading account while I still can. Because in the near future, the investing account will be receiving my full attention. Call this weeks deposit a "last push for the trading account equity"

So the account balances, after this deposit, read as follows:

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $481.73
(YTD equity is - 1%. RoC is about -17.5%)
  • 4.1064 shares of KO
  • 3.0301 shares of JNJ
  • 1 SPY 80 Put - September Hedge
  • Cash: $89.12
  • Additional $31.28 available from slush fund
Stock / Futures Trading Balance: $1,521.21
(YTD Cash equity up about 50%. Return on Capital is about 2%)
  • Additional $31.28 available from slush fund
Online Savings Balance: $125.15
(YTD Cash equity up about 2%. Return on Capital is about 1.49%)
  • $31.28 for a Slush fund / Drawdown Kill Switch fund
  • $62.59 for a base savings
  • $31.28 for Emergency Savings
We'll be back to the Challenge Project, next Monday ...

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Sunday, August 16, 2009

Week in Review: Market Relationships (PODCAST)

"Developing the plan is actually laying out the sequence of events that have to occur for you to achieve your goal." - George L. Morrisey

Welcome to the Week in Review!

For the last few weeks, I've been discussing the economy. The current state of the economy, as well as possible scenarios that I see developing within the economy. I've discussed what I believe an actual 'recovery scenario' would look like (as opposed to what the mainstream financial media would like to feed people that a recovery scenario looks like). I've discussed what I believe deflation in asset prices would look like, in a 'round 2' of deflation. In the future I will discuss a "credit default" scenario, and what I believe it would look like.

It's all well and good to talk about various 'scenarios'. But when and how will I make the decision to "go with" a certain bias?

I'll let the market tell me which bias is the correct bias out of the current developing scenarios.

Ok, that sounds all well and good Dan. But what does that mean? How does one go about doing that?

After our 'market review', I'll discuss that in this weeks "Week in Review Podcast". Just click play !

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

Here is a picture of the current Bond Curve

(Click to Enlarge)

Here is a picture of the stock markets action on Friday, as reflected by the DOW Jones Industrial Average

(Click to Enlarge)


Here is a picture of the U.S. Dollar Index on Friday ...

(Click to Enlarge)

Here is a picture of the Crude Oil as a Commodity on Friday ...

(Click to Enlarge)

Here is a picture of the 10 year Note in the Credit Markets for Friday ...

(Click to Enlarge)

Here is a picture of some rules that Larry Williams came up with when it comes to Bonds, Gold, and the Stock Market ...

(Click to Enlarge)

B = Bonds, G= Gold, S= Stocks.

Remember. Money flows. The trick, is to figure out when a 'key moment is upon us', and then look and see where the money starts flowing.

Incidentally? The song I mentioned in the beginning of the podcast? Here's the link to the video for "Don't Take me for Granted!" by Social Distortion

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Thursday, August 13, 2009

State of the Economy: Scenario #2 - Deflation Round Two (PODCAST)

"Zero percent is still deflation." - Kozo Yamamoto

I have had a series going for over a week, in which I discuss my outlook for the economy. I have developed and look at four possible scenarios occuring within the next few months. This is the second possible (and I might even add, probable) one of those scenarios ...

I discuss that scenario in the following entry ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

Here is the link to an entry I had, describing one part of a deflationary trap.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Tuesday, August 11, 2009

State of the Economy: Scenario #1 - Recovery (VIDEO)

"My major hobby is teasing people who take themselves and the quality of their knowledge too seriously and those who don’t have the guts to sometimes say: 'I don’t know...." - Nassim Taleb

I have had a series going for over a week, in which I discuss my outlook for the economy. I have developed and look at four possible scenarios occuring within the next few months. This is the first possible (and I do stress, possible) one of those scenarios ...

I discuss that scenario in the following entry ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



What we are concerned with as investors, at some point, is the "truth in price" moment that I discussed, and discovering when that time has been reached. Economically, everything begins to head forward from that point. Despite corruption. Despite horrendous economic conditions.

There's comes a point, where you have to recognize that although you have a long road to travel and there are many challenging obstacles in your way? You've already begun to walk.

In 1937, suicides were higher than they were in 1929. People were giving up to despair at an alarming rate. But in 1933? The 'truth in price' moment had been reached, and the economy was always trying to recover from that point forward.

The biggest thing to look at, is an actual IMPROVEMENT (not slowling, an improvement) in the unemployment rate.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Monday, August 10, 2009

Monday Challenge Project Summary: August 10, 2009

Previous Challenge Project Balances:

Investing Account Balance: $508.25
Stock / Futures Trading Balance: $1,496.21
Online Savings Balance: $100.15

The original video explanation of the Challenge Project is to be found here.

Some time ago I stated that I may split up Rule No. 2, into weekly segments; or, $25.00 a week. Rule No. 2 states that each month, we can divvy up $100.00 as we wish between the various challenge project accounts.

The investing account continues to hold on to the SPY hedge option. Unless we get some sort of spectacular blowup in equities, that option will probably expire worthless. Though it will have served it's purpose, that of a hedge. I think the option has about 41 days until expiration. I will be adding equity to this account, as I have stated that I would love to have about $700.00 cash in that account come this November. We'll see how that turns out.

For this week, the $25.00 weekly deposit is being transferred to the Savings Account. This will increase both our base savings, our emergency savings (well, it's "sort" of emergency savings. It just is there to prove the point that you should have one). In addition, this increases the amount available for our drawdown kill switch / slush fund for both the investing and trading account. Which in turn allows us greater mobility when it comes to trading as well as investing.

So the account balances, at this point, read as follows:

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $490.58
(YTD equity up about 1.19%. YTD Return is about -17.5%)
  • 4.1064 shares of KO
  • 3.0301 shares of JNJ
  • 1 SPY 80 Put - September Hedge
  • Cash: $89.12
  • Additional $31.28 available from slush fund
Stock / Futures Trading Balance: $1,496.21
(YTD Cash equity up about 47.5%. Return on Capital is about 2%)
  • Additional $31.28 available from slush fund
Online Savings Balance: $125.15
(YTD Cash equity up about 2%. Return on Capital is about 1.49%)
  • $31.28 for a Slush fund / Drawdown Kill Switch fund
  • $62.59 for a base savings
  • $31.28 for Emergency Savings
We'll be back to the Challenge Project, next Monday ...

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Saturday, August 8, 2009

Week in Review: This Stock Market Rally (PODCAST)

"Man can believe the impossible, but can never believe the improbable" - Oscar Wilde

Welcome to the 'Week in Review'.

So beginning on July 13, 2009, we began what has been called a massive 'upwards slide' in equities. At the same time, the credit markets decided to reverse, and towards higher rates (remember, look at the credit markets in relation to the stock market).

But everyone wants to continue to talk about the stock market. So let's do that. Let's talk about that stock market rally in this week in review ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)



Click here to download this podcast.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Wednesday, August 5, 2009

State of the Economy: Three Scenarios (and Comments Regarding Lifestyle of Traders)

"The general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat: how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose." - Sun Tzu - The Art of War

When you talk about arriving at a conclusion based on a differential mathematical subset (economics) - you are dealing with variables that you can't control.

Uhhh. Ok Dan. What does that mean?

It means that in essence, the variables that make up this 'math problem' of what will occur within the economy? Are constantly changing. This is another reason why I state that is silly to try to 'predict' the market. The variables are known. They are things like; the governments actions or inaction, the media's 'spin' on what occurs, and the basic economic flow of capital within the markets. But those factors all interrelate to one another, and change, based on each others action.

Well, we already discussed that the mainstream media (and to some extent, new media) can affect the psychological aspect of consumer confidence. We also discussed the conflicting 'elements' of 'where we now stand'.

I mentioned in my last blog entry that there are various scenarios that I have my eye on, in this crazy, toppsy tuvy economy that we find ourselves in. I discuss that in the following entry ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)



Here is the link to David Warings YouTube Vlog Channel, and here is the link to his Blog at the Informed Trades community.

( Psst! Bug him to start the videos back up! :) )

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Tuesday, August 4, 2009

Airelon's "Time Line"

Some time ago, I was corresponding via email with someone that shared their "time line" with me. In other words, how they had been doing financially over the course of the last few years. Major events. Setbacks. I could sense a bit of, shall we say, frustration about the rate of progress?

So I figured that the best way to encourage someone? Was to share a "time line" of someone who did well, but progressed more slowly than they had. Thus, I then shared my own personal "time line"

Here it is, and hopefully, it can encourage the small retail traders and investors who are slowly but surely struggling to get ahead ...

1996 - Got married, started trading. Blew $3,000 in the first two months, thus blowing up the account. I was still dreaming of yachts.

1997 - By mid year, I had blown up two more accounts. Anywhere from $3,000 to $2,5000 per account. Accumulated probably near 50k in credit card debt after getting married. I probably would have been stupid enough to buy a house during the coming housing bubble if I wasn't already sunk into a debt quagmire.

1998 - I heard about some Larry Williams guy. Started trying to pay down absolutely impossible debt - and understood what I had done, but much too late. Still blowing up trading accounts to the tune of $3k a piece. Thank god I had a nice job for this lifestyle! I was working at E.D.S. at the time.

1999 - Started listening to something called "Money management"? Still trying to pay down absolutely impossible debt. Interest raping me at this point on the credit cards.

2000 - Creditors, although I'm paying them back? Are starting to yank money out of various accounts I have. Blew up account again, but this time, I'm noticing that on the trading front? I'm making real headway, and the blowup was due to a mistake where I knew better. But as I mentioned in that entry, I was so discouraged after 4 years of work, I stop trading.

I start looking at dividend investing, but don't pursue it.

2001 - I have to declare Bankruptcy. Trying to pay back the debt, and it just wouldn't work. It couldn't work. I could make $100k a year, and it was just treading water. So before I do that, I naturally take all of my brokerage accounts that had some money in them to $0.00

2002 - I start looking at investing. Started investing at JUST the right time, based on pure luck. :) I had experienced so many losses in trading, I didn't trust the success I was having at investing. So I started to look into economics.

2003 - I started Trading again. One more big loss that really, really hurt, but now it's a case of "one big step back, 5 small steps forward" and money management is really starting to pay off. That mistake cost me dearly, but I now understand what it was that caused the problem. I ignored risk management. So I begin to now add $35.00 a week to my trading accounts, in addition to my base capital. I begin to develop my "three sisters" portfolio management system.

2004 - Trading and Investing starts to take off. About 60% invested at this point, 30% trading, and 10% savings.

2005 - Things are looking up, but I was struggling, since I began from the low funded position. Just having to be patient.

2006 - 2009 - I still tried to work part time as an audit control officer, but finally left after only a few months in 2006. As time passed, I didn't need the money, and my success with trading and investing was actually affecting my work ethic, so I left.

The rest is public history. 2006 was in many ways, a "hump". Then later in 2006 I made a move that I think gave my wife and I an 'emotional boost' to our social support system. It's a move that I think helped buttress my trading and investing successes - as it led to a 'healthy emotional environment'. We've been loving every day since then.

Now do you see why those who are low funded and in a bad way financially are near and dear to my heart?

So if you are in the low funded position? Remember that these things take time. And that progress? Is just that. Progress.

Hopefully, you all do not have the debt that I managed to accumulate for myself in the beginning, as debt is the easiest way to slow down your progress. But I firmly believe that by paying debt down quickly, and with a firm hold on Money Management Principles ... you can do it.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Monday, August 3, 2009

Challenge Project Summary: August 3, 2009

Previous Challenge Project Balances:

Investing Account Balance: $503.19
Stock / Futures Trading Balance: $1,464.14
Online Savings Balance: $100.06

The original video explanation of the Challenge Project is to be found here.

Some time ago I stated that I may split up Rule No. 2, into weekly segments; or, $25.00 a week. Rule No. 2 states that each month, we can divy up $100.00 as we wish ...

For this week, the $25.00 weekly deposit is being transferred to the Trading Account. We'll add to the bit of GLD put profits we took last week, and help buttress that accounts growth.

The investing account continues to hold on to the SPY hedge option. I will be adding equity to this account, as I have stated that I would love to have about $700.00 cash in that account come this November. We'll see how that turns out.

The savings account received $0.09 in interest payments for July, and continues to grow from Rule No. 2 deposits; which in turn supports the investing and trading accounts.

So the account balances, at this point, read as follows:

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $508.25
  • 4.1064 shares of KO (DRIP is on)
  • 3.0301 shares of JNJ (DRIP is on)
  • 1 SPY 80 Put - September Hedge
  • Cash: $89.12
  • Additional $25.00 available from slush fund
Stock / Futures Trading Balance: $1,496.21
  • Additional $25.00 available from slush fund
Online Savings Balance: $100.15 (Interest Paid)
  • $25.00 for a Slush fund / Drawdown Kill Switch fund
  • $50.15 for a base savings
  • $25.00 for Emergency Savings
We'll be back to the Challenge Project, next Monday ...

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Sunday, August 2, 2009

Crazy Weekend ...

I've been a little under the weather, as I think I'm trying to battle off allergies at the moment. There will be no "Week in Review" for this week, however, much of the economic thoughts I've had on my mind will be covered in upcoming entries. We'll be discussing the various outcomes I see, namely ...

  • Recovery, what it would look like and how to profit from it ...
  • A "second round" of deflation in asset prices and the time frames that I have my eye on for both such scenarios, and of course how to profit from it ...
  • A credit default scenario, what it would look like, and how I expect to profit from it ...

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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