John’s been bugging me for a new laptop, and today I bought him a Panasonic CF-18 Toughbook tablet. Fully ruggedized, and a real alpha computer that will dominate those wimpy Macs that are used in the Libraries. I’ve said before, the Toughbooks are expensive, but are real good value. John will be pleased when he gets his surprise delivered next week.
I’m moving closer towards acquiring that painting I’m working on, and I also have to get that stupid Miro that I promised Denise I’d get John. It seems that all I do is spend, spend, spend. Plus I’ve got to worry about that April 8th auction at Sotheby’s, in which I will probably bid myself into the poorhouse
I’ve found another type of human vulture, the real estate agent. Since Denise died, I’ve been contacted by no less than 12 agents offering their services in disposing of my property. If another one shows up at the door, he might get a butt full of rocksalt from Denise’s scattergun, which is conveniently placed within easy reach of our front door. This week, I’ve also had some insurance guys try to sell me policies to protect my son. I am pretty well covered as far as insurance (just enough to bury me and have a good party). John doesn’t have to worry about money, as we’ve been saving a reasonable amount of stocks, bonds, land, art, gems, and gold. Myself, I could go without money really easily. I used to tell my lovely wife that I could be dropped off in any city in the country with $100 in my pocket, and within a year would be close to where I was financially before being dropped off. Money’s no big deal, it’s the game that matters.
I went to the gravesite today and spent an hour sprucing things up, and planted some flowers. I yelled at Denise for leaving me so early, and ended up crying my eyes out.Some onlookers steered away at me, thre crazy man, and Iwas glad to be left alone.
I tried to trade today, I really tried. There was just no set up, pattern, or edge that captured my fancy. So I didn’t end up hitting any hot button. I did manage a lot of reading over at DS and noticed that they let that troll back in the comments sections. This is the troll I wrote about in an earlier post….it’s pretty good and here’s the link.
http://masteroftheuniverse.wordpress.com/2008/02/17/second-handers/
This guy claims to have aspergers and wants to get a pass from everyone for his boorish, bombastic behavior. He insults most of the folks there, indulges in name calling, and makes grandiose, delusional statements. Disbility or no disability, the guy is a jerk who is seeking attention from his superiors…amd everyone on that list is his superior many times over. From what I gather, he’s a tyro who started trading the NASDAQ rise in 1998-1999, hence his heavy market experience. I won’t respond to him, as I don’t need his bad Karma. Click on the link and see how he savaged me on my own blog. As my lovely wife used to say, a person can have aspergers or any other form of autism, and can still be as crazy as a loon.
Hey Jeff,
Re John’s laptop - it’s not much of a surprise if you broadcast it in your blog.
On real estate agents and life insurance salesmen, how about just pretending you’re a timeshare salesman and Jehovah’s Witness, and tell them “No, problem” as long as they buy some timeshare and promise to come to the next Kingdom Hall meeting with you. Barring that, just tell them your survey consulting fee is $100 per minute; look at your watch and start counting down from 10.
Cheers,
George
Comment by allocator — April 1, 2008 @ 9:38 pm
George,
The people who were selling me last week were all local, and I doubt they read this blog. I don’t get a whole lot of hits, compared to your blog. I’ve seen your numbers, and mine are nowhere near yours. However, I have the best readers in the world.
Jeff
Comment by masteroftheuniverse — April 1, 2008 @ 11:14 pm
Doesn’t John read your blog?
I’ll take the “best readers” thing as a compliment.
My blog hit numbers come mostly from the fact that I’ve been blogging quite a bit longer, and I’m also over 200 posts. Search engines often find me, depending on the topic. Some posts where I put up some useful reference information (e.g. comparisons of solar stocks or short ETFs) I notice people sometimes return to. The alternative energy stuff I’ve done gets quite a few hits. The one about the HHO gas guy in Clearwater who uses hydrogen on demand to increase car fuel efficiency by 30% has 2500 hits alone.
But not too many people engage - I don’t get a lot of comments, other than from you and a few curious folks now and then. Quite a few people seem to have read through my REAP system. I’d say about 100. Who knows if they get it, or care? (With the commodity ETFs I’ve added, this thing is going to really take off. As I point out in today’s post, it’s like having options in your account that never go out of the money and never expire. I’m thinking now, that at the accelerated rate of signals I’m getting, I can get the results I was expecting in 20 years, now in maybe 7-8. The compounding dynamic is the same; if you get 3 to 4 times the number of trades compressed into the same time period …
I just have fun writing. In fact I’ve already written more than a book’s worth since I started. And I know I’m right on my system. Every nuance, every detail is in my head. Sooner or later someone else will see the value in it as well and I can turn it into a career (but not until I’m beating the averages and making money net).
The reason people engage your blog is that you’re a seasoned, successful veteran, and have a lot of really interesting things to write about from personal experience, and you write VERY well, I might add. I’ve enjoyed every one of your DS posts.
Cheers,
George
Comment by allocator — April 1, 2008 @ 11:43 pm
That’s what you should do is to write a book. I’ve been mulling doing one over in my head for some while,and might do it. I have some old friends at Wiley who would probably help me get published. Plus there’s a bunch of guys on the list that write books all the time and would be glad to give some contacts. Our books might not become best sellers, but I’ll bet that there would be a small niche audience. Plus, the advantages of having a book published include those nasty wine and cheese signings, 3 dollar royalty checks, and guys that pick up a copy of your book, think it’s the holy grail, and stalk you to kingdom come. Kind of the way our friend over at DS is doing to VN.
Jeff
Comment by masteroftheuniverse — April 2, 2008 @ 1:57 am
That’s what you should do is to write a book. I’ve been mulling doing one over in my head for some while,and might do it. I have some old friends at Wiley who would probably help me get published. Plus there’s a bunch of guys on the list that write books all the time and would be glad to give some contacts. Our books might not become best sellers, but I’ll bet that there would be a small niche audience. Plus, the advantages of having a book published include those nasty wine and cheese signings, 3 dollar royalty checks, and guys that pick up a copy of your book, think it’s the holy grail, and stalk you to kingdom come. Kind of the way our friend over at DS is doing to VN.
Jeff
Comment by masteroftheuniverse — April 2, 2008 @ 1:58 am
In stereo?
YOU definitely should write a book. As I’ve said before, your experiences in the Minneapolis pits are wonderful, historic, Americana. I’ll be the first one to buy it - I love that stuff. Real experiences of people having to rely on every scrap of knowledge, experience, instinct, inventiveness, and courage in a tough game. That’s why I love books like Victor’s “The Education of a Speculator”, Mark Ritchie’s “God in the Pits: Confessions of a Commodity Trader”, George Soros’ books, Ben Mezrich’s biographies such as “The Ugly Americans”, the movie “Rogue Trader” about Nick Leeson and so on - the stories on how it really went down. (I think what it is is that they keep my dream alive.)
As for your bad day today, Jeff, get out of Dodge for a while. Go visit one of your best friends, or maybe an old stomping ground where you know people, like in Minneapolis, and as I’ve said you’re welcome here, though you still don’t know me that well and what you probably need more right now is the familiar. Bring a laptop and some of your other stuff so you can still trade, but get yourself into an environment with some kindred spirits. (How about your best buddy in Hawaii?) Missing Denise and being alone is not a great combo. Sounds like John could use some getting away or some non-instrusive company as well.
Cheers,
George
Comment by allocator — April 2, 2008 @ 2:56 am
George,
I probably will get away in a few weeks. Meanwhile, I might have scored a deal on a 6 month rental for a condo in downtown Sarasota. It’s on the 15th floor and has great security. The view isn’t bad, either.
Jeff
Comment by masteroftheuniverse — April 3, 2008 @ 12:58 am
Sounds great, Jeff. Good luck with that. But what about the ocean?
On another note, I’ve been invited to join http://www.InvestorsPlaceBlogs.com as a “content-rich” blogger. It’s flattering to be noticed, but I’m not sure why I should blog out of another web site with my ideas while they collect the ad revenues. I already turned down writing for the Motley Fool because I wanted to keep my rights and my flexibility. If you wouldn’t mind having a look at the site at some point and telling me what you think, I’d appreciate it. At first glance I didn’t see anything there that grabbed me.
Cheers,
George
Comment by allocator — April 3, 2008 @ 2:01 am
George, for some reason, the blog won’t appear in my browser. I’ll try again later and let you know what I think. Personally, I think the audience at DS is the most astute group of speculators out there. They really get it. I went over to Elite trader and saw some real vitriol regarding DS and VN, so we must be doing a good job
They make fun of us a lot and spread a lot of rumours about VN….these are guys that probably have a default size of 500 shares on a $20.00 stock, trashing VN. Submit your content over to DS, and I’m sure you’ll get more things published….to an appreciative audience. By the way, I saw the troll using you as a reverse indicator.
Jeff
Comment by masteroftheuniverse — April 3, 2008 @ 2:26 am
Sorry Jeff,
I spelled the URL wrong - it’s http://www.investorplaceblogs.com.
Lon has NO idea what I’m doing. He doesn’t know my weightings, the theory, or any of it.
I’m dead certain my system is a money-maker, and one day it, or something like it, will change the face of money management.
Lon can fade me all he likes. Especially because of the perfect dynamic of the 2x commodity ETFs I’ve found, this thing is going to take off - growing slowly at first (year or two), and then really starting to fly.
I had one of those perfect moments of clarity last night as I was thinking about it. Hitch your wagon to the weather (which is increasing in volatility), and you’ll get a feast of random volatility. And my Clysdales are the energies and the grains.
By the way, I highly recommend Ben Mezrich’s new book “Rigged”. It’s a true story about an Ivy League kid out of school who gets involved first with the NYMEX and then is thrown into the real game of international oil in the Middle East. I’m still at the NYMEX part. Where that lightning flash of clarity came from for me last night is where in the book his new boss is explaining how the energy trading works on the floor and asks the kid what he thinks makes the markets move. As the kid is about to blurt out something about geo-politics and wars, but something twigs instead and he says “the weather”. That’s when the boss grins and knows he’s got his man.
Cheers,
George
Comment by George Parkanyi — April 3, 2008 @ 5:18 pm
George,
That site looks OK, but is a standard boilerplate investment site. If you supply the ideas, and they get the revenues, you already know the answer.
Actually, your allocation system is pretty cool, and has a lot of merit over the long haul, which is what really counts. Success is measured in years, not individual trades. I tend to hold my stocks for a real long time. I’ve had some stocks for 30+ years. Right now, my biggest stock holding is in CME, which I don’t think I’ll ever part with. I’ve also owned IBM for so long it hurts. I own a bit of DD and GE, which are part of the core. I’ll take a flyer in stocks when I scalp GOOG or RIMM, but the aforementioned stocks will stay under my mattress forever. Plus, on a stock like CME, my basis is extremely low.
Jeff
Comment by masteroftheuniverse — April 4, 2008 @ 12:17 am
Thanks Jeff,
I have 4 signals in a row this week. That’s 2 months worth of trading compressed into 4 days - with bona-fide signals (I’m not cheating). If it keeps up at even a quarter of this pace, the compounding will be phenomenal. The slight leverage of the 2x ETFs adds a lot of zip.
I looked at blue chips like you have for my system, but they move too slowly to get rich on. 2 of 6 are great as “anchor” stocks (I have some Merck for example), but you need to add some volatility in there to get a really good effect. (You can beat buy-and-hold by about 3% compounded with the Dow-type slow-moving stocks). CME sounds like a great long-term hold.
Cheers,
George
Comment by allocator — April 4, 2008 @ 1:17 am
George,
I read your post about the signals….that’s cool the system is working.
As for my core holding of stocks, some like CME, I inherited from my grandfather. I inherited the DD and GE from a rich old spinster great aunt. I’m not concerned about these stocks, and look at them as a sort of nest egg. I’m not even looking for performance,as I can generate all the performance (+ and -) I need by speculation. The best performing assets I’ ve ever had are my seats at the MGEX, which have increased nicely over the years. My great-grandfather bought the seats at the CBOT for the staggering sum of 25 bucks apiece, way back when. He was smart and held them, never trading, but leasing them out for income and appreciation.
I’m glad I blew out of my short on DECK as I would really be under water in that trade had I held it. I was actually $13 and change in the money on that trade. When I blew out of all my trades that fateful day, I ended up making $1.75 per share on thagt short. I wasn’t thinking too clearly at that time….I’m still not.
On your ETF’s, what’s the daily costs per share?
As for Lon fading you, he’s something of an indicator himself. I get a kick out of his retorts.
Jeff
Comment by masteroftheuniverse — April 4, 2008 @ 1:34 am
I don’t know about the daily costs, but the management fee I think is in the order of 1% or so on the Canadian ones. On commodity ETFs there probably would be a bit of a drag on the NAV in transaction costs like futures rollovers, but at only 2x leverage, most of the assets would be in T-Bills. Anyway, those costs are in noise for the volatility these things have. I like the fact that I can take both a long AND a short position on a commodity at the same time. AS it goes up, I accumulate the short and sell the long, as it goes down, you do the opposite. These things are so volatile (for stocks) that I was able to get 4 profit-taking trades in the short gold ETF - against a pretty strong trend!
There are plenty of 1x commodity ETFs on US exchanges, but I haven’t seen any 2x. I’ve only come across Horizons BetaPro in Canada that offers them, and most of them are relatively new. The grains short still only trades a few thousand shares a day. The ones that have been a around for a while (like the gold stocks pair) trade high volume, often over a million shares a day.
Cheers,
George
Comment by allocator — April 4, 2008 @ 4:28 am
George,
I’ve never played with ETF’s. I can see how they can make money,and I can also see the distortions that they can cause to the actual underlying commodities eg. gold. One could have fun spreading those ETF’s, but I’d probably have a hard time doing it as my mind would have trouble keeping up with being long-long, yet in a spread.
Jeff
Comment by masteroftheuniverse — April 4, 2008 @ 11:47 pm
They do publish the net asset values everyday. But the ETF’s trade at substantially different prices, so then you have to manage the ratio of “long” and “short” positions - the share counts. For example the 2x long gas ETF is around $25 while the short is $13 something. You’d have to do some number-crunching to figure out how you arbitrage or spread these things. And some of them aren’t very liquid. Your size would probably make it hard to get in and out. I dunno.
Me, I’m just creating a non-linear price motion machine and using a capture mechanism (divergence spread) to simply harvest when the price divergence is ripe. Not every one is profitable, but statistically in aggregate they are. I know there is a compounding effect, because I’ve mathematically isolated it.
I liken it to throwing out a net and trolling. I don’t know where exactly the fish are or when I’ll run into them, but I know they are there and if I troll long enough I’ll catch plenty. And by throwing in a little food (commodity ETFs), I’m creating more fish more quickly.
Cheers,
George
Comment by allocator — April 5, 2008 @ 12:48 am
George,
With ETF’s, you can trade commodities and your wife will be none the wiser.
Jeff
Comment by masteroftheuniverse — April 5, 2008 @ 1:53 am
Oh she’s fine with it. I explained to her that the leverage is really dialled down at 2:1. She sees all the trading slips anyway. I wouldn’t hide it from her.
I remember when I was trading commodities wondering why can’t someone just create single commodity funds or ETFs? They would be great tools to use in allocation strategies.
What’s interesting now is how they will effect the dynamics of the futures markets. These ETF guys can’t just wait till the last day to roll over their (huge?) positions at expiry or they’ll get killed. I’m sure they have to do it gradually over time. I bet it gets interesting for them when there’s a big difference in the front and back months. They may also be able to smooth things out using options. It would actually be interesting to design the trading algorithm to maintain a leveraged commodity fund that would replicate the 2x action for which they are designed. Hey, maybe we could design a “breakfast special” ETF group of funds OJ,KC,PB & W.
BTW Have you ever heard of the Dubai Gold and Commodities exchange? I just realized that the book I’m reading right now (”Rigged” by Ben Mezrich) is precisely about the creation of that exchange. I wonder what a seat there costs? Maybe I’ll just Google it and find out!
Cheers,
George
Comment by allocator — April 5, 2008 @ 2:31 am
You can buy membership priveleges for $10,000-$30,000 depending on what you want to trade. It might be a good deal for someone who wants to trade in a tax free environment. I, myself wouldn’t trade on that exchange due to the liquidity problems that could pop up.
Jeff
Comment by masteroftheuniverse — April 5, 2008 @ 2:39 am