WallStreetRamblings.Com Investment Strategy

I have requests to explain our Investment Strategy by some new clients. We are not by nature "Day Traders".Our strategies are based upon Macro-Economic, Fundamental, and Technical Analysis/Market Timing principals. We begin with a "Top Down" view of markets, sectors, and economics. We like to get a picture of the current environment and cycle. We do not use Value Investing like Warren Buffet and others. We feel there are many others with much greater expertise and access to information who can more accurately define the true value of a business. The core of our strategy is to try, as best we can, to move into positions we feel the majority of money will flow (Institutional Buyers), either while they are accumulating and just before rapid buying. We try to ascertain what are the real intentions of the "smart money". Are they scaring people away so they can accumulate? Are they promoting so they can unload? Once the Macro picture is identified we employ market timing computer programs based upon probabilities of technical formations. We try to play only those formations that have been proven to have a 75% or better probability of success. We try to play those with the strongest fundamentals; however, some of our best plays have been those which do not possess strong fundamentals but have "retail" appeal. Once opportunities have been identified, we then use accumulation principals ranging from pyramiding to all out buy. Our time frame is usually days or weeks. We will trade around core positions and frequently play the same positions multiple times.We employ strict risk management principals based upon the rules of "Texas No-Limit Poker" and protecting "Your Stack" against "Bad Beats". Better to live to fight another day. We will often use the media in a contrary manner. We will go long, short, or both. We are not believers in having a big basket of positions. We prefer to watch a small basket like a hawk. The rest is a "Secret Recipe".

Market Update

Well well. I guess we don't feel so bad now. Looks like our sell program wasn't so wrong after all. Went golfing with a client today and we missed the plunge. I will run some programs and see where the sell-off may end and find new entry points. Check emails and have a great weekend!

Dang Nab it!

Good Grief! CNBC smoked me again. I can not believe I sold early watching their .....you know what. I vowed to ignore them; however, I wanted to watch the Goldman inquiry. We could have made boatloads! Oh well....we restart our computers next week. Never again.

Market Update: Oops!

It is strong. Looks like we may have been a little premature on pulling off our trades. Not a big deal because we can get into them at only slightly higher prices if we choose. It is kinda of funny because I broke one of our rules- I watched the media (I couldn't help myself-I wanted to watch the Goldman Sachs deal). We were supposed to be in "Night Vison" mode (Night Vision is media blackout). Should have known better to sell based upon a S&P downgrade of Greece. They are almost always behind the curve and I usually buy when they downgrade. I guess we also wanted to lock in a good April performance after a poor March showing (not a bad strategy). We are not going to do anything the rest of the week. No use to put on trades going into Friday. Next week is SIRI earnings. We sold at 1.18 (.99 cost basis). Not sure we are going to play it again. There are just too many people crowding that trade right now and I don't like to play earnings. We missed our trade on NBG (National Bank of Greece. We had a 2.25 Buy Limit and it only got down to 2.56. We will not go back to PMTI (I was surprised at their low revenue number). Oh well...we are out for the market for the rest of the week. Check your emails for updates.

Fed Keeps Rates Unchanged

Wow! Seems very suspect. If everything is so great, why would they leave them unchanged. I take it as not a good sign. I sense a "Sell in May; Go Away". The Fed under normal conditions-given the good news lately- would have raised rates. The theory is they are holding trillions in interest rate sensitive securities-a la the crisis and bail outs. Very fishy. We are sellers or out of the market. Stay tuned.

Market Update

On the sidelines today.

Did Goldman Sachs do anything wrong? OPINION

I watched the hearings yesterday for 11 straight hours while I was multi-tasking our trades and research. There are 3 main questions. 1.) Did GS break any laws on the ABACUS Deal? 2.) Is GS obligated to disclose their opinion when they act as Market Maker? 3.) Did GS cause the housing collapse?

1.) There may be some disclosure issues here. Goldman knew what they were doing. They picked asset manager (ACA) for their synthetic CDO (The first time in over 50 deals they did not do it themselves- a clue). They let Paulson (who was going to make a massive bet against their success) assist in picking the RMBS securities for the deal. This was not disclosed in the marketing material on the executive summary. Almost everybody on the GS side thought the securities were "Sh&tty". They looked long and hard to find a "sucker" asset manager. They did in ACA. It is obvious the Mortgage trading desk knew the market was going to blow up and bet heavily against it. Not a crime. In my opinion: Goldman was ethically wrong (not in Wall Street terms, business terms) and my be somewhat criminally wrong on their disclosures. Their intention was to take advantage of a situation in the most expeditious manner knowing it would collapse- The smoking gun is that Goldman let a 2% revenue contributor (Mortgage Desk) use a 56% VAR (Value at Risk) bet. No one bets 56% of their total risk capital on a good idea or a hunch. BTW- the traders left the firm shortly after the all this happened. The Verdict: Guilty ( so are many many others on The Street)

2. No. Market makers do not have to do this. Verdict: Not guilty

3. No not the cause; however, they were a flammable liquid in an explosive environment (as were others). Goldman made great trades. They were definitely helped by all their connections in a "rigged" environment and exacerbated the results and the devastation. Goldman took advantage of a bubble in a grand fashion. Not a crime. The real crime is the government letting themselves be taken advantage of by Wall Street. Wall Street is Wall Street. It was shocking to see during this crisis how little Congress and Senate know about finance and capital markets. In the end- can you imagine letting the politicians run the capital markets?! My goodness that would be a disaster. Good or Bad- The Fed needs to remain in control. My solution: Bring back The Glass-Steagall Act. Let there be Fox dens and Hen houses-Not foxes in the hen house.

Conclusion: Goldman Sachs is the very best player to ever play Wall Street. They are a product of their environment and adapt very well. People go to Wall Street to "play to win". It is unfortunate and wrong when "Main Street" gets hurt as "collateral damage" when titans clash. There must be size limits (in all categories) imposed and regulated to contain the damage when things blow-up. There must also be seperation of "Main Street Money" ,"Wall Street Money", and "Government Money". Each with very distinct rules and regulations. The mucking of the categories, government financial ignorance, lack of law and order, and greed (Main Street included) caused the crisis.
Wall Street does what they are supposed to do- Try to profit. If you are going to have a pet tiger, you better know how to control it. Is it the Tiger's fault that it bit you or is it just being a Tiger? Thank goodness Wall Street is in America. IT is better to have "The Tiger" on our side then anywhere else in the world. When it is "good" -It pushes innovation, develops growth, creates jobs, fills our coffers, funds our defenses, and destroys our opponents (U.S.S.R. - yes it was capitalism that collapsed the U.S.S.R and not missles). A good example is to play Sid Mier's Civillization- the development of capitalisation is crucial to a country's development and success

P.S. They should teach every American basic finance in school

Safe Habor

We pulled our trades today. I didn't really want to;however, the environment seems sketchy right now. PPP netted +24% and ABC netted us +19%. It could have been more. We are in 100% cash. A little disappointed in the catch. The "weather" forced us to cut them loose.We will play these again (so we will keep them "coded" for now). It may not have been the best move; however, it doesn't hurt as we increased our YTD performance to +37.84% and sit comfortably in cash. It just doesn't seem right. We will see if we made the right decision. Check emails.

P.S. Had to let the two "JAWS" go. Bad weather. We will hunt them down again. A shame. Good profit-it could have been huge.

I'm Back

From my break. We should be picking up the activity and the search programs.

Now comes the hard part!

Our "Sharks" are running hard. Now comes the most difficult part-we have substantial profits in PPP and ABC. The question is: Do we sell before their earnings? Our PPP reports this week and our ABC in a few weeks (we have time). As usual, the media is no help in here. They only focus on financials and technology it seems. It is amazing how many good trades they don't even talk about. I guess they don't advertise with them. Our "programs" are leading the way. I am still contemplating whether to pull the plug before earnings. Check emails and stay tuned.

PPP Update

Our medical stock continues to hit new highs. Earnings are coming out very soon so we have to watch this closely. I think they will be good. Stay tuned.

MGM and FITB Update

New highs. We will continue to hold until our targets are hit. Check emails for info.

Fish are still on!!!!

We are still in great shape. Our medical stock PPP just hit a multi-month high and our other ABC is still running. Our "Night Vision" is working great. It's a good thing I took the last couple days to go golfing during market hours to avoid the "noise". So far it has worked. We missed the Goldman BS and the Greek BS. It probably would have been hard not to sell during the last two days! I did get nervous this morning and check the quotes many times on the course though! Check you emails for updates. have a great weekend!

P.S. For those who asked- I shot an 80 from "The Tips" (6705 Yrds/ 125 Slope). Drives were sick- 300+ yards in the fairway or 1st cut on most (being an ex-hockey player helps!). A few rammed into the trees, only to bounce out. Gotta love The Golf Gods!!!!

The Sharks are still On!

Going to be wild rides comming up. Both our sharks are reporting earnings in the next few weeks. As Captain Quint said: "Back home we have a taxidermy man. He gonna have a heart attack when he see what I brung him". Let's hope he's right. We continue to hold and let the fish ride. We are going to need more barrels I fear! In addition-we have added new gear....besides our "Night Vision", we have added a high-powered "sniper rifle" (other earnings estimate sites)to double check our estimates. It's the Cheytec Intervention M200 Sniper Rifle. The most powerful and accurate in the world. We are going to need it if we are going to play our JAWS stocks through earnings. Besides- It's my 13 y.o. Nephew's favorite weapon in "Call-of-Duty: Modern Warfare". I am still probing for intel. Check emails and be ready to bail if its not looking good.

Still Working!

Holding! Our ignoring media (Night Vision) is so far so good. Check updates.

Still Strong! Update.

Looks like I missed an interesting day. Out having fun as I advised y'all to do today. Looks like Government Slacks (GS) got hit with a civil suit today. What a surprise! Riiiiiiight. No worries...our Sharks are still strong...we still have decent profits and they held up well. Again...."sniper mode"...turn off the media and go into "night vision"...our computers are still "all systems go"...and our fish are still hooked. Like I said..gonna be a tough catch in here...the big ones are hard to land. It's still FISH ON until further notice. Yes I know the VIX is low, Yes I know expectations are high....we are fishing in a different spot and it is still "Game On". Our stops are in for a break even if we have to cut bait. Check your emails for updates.........have a nice weekend!

Strap in Folks!

Our catches are strong and still running! I have put some targets on them and we will have to play them just right. If we pull too early, we might let the big ones get away. ABC is getting run hard! Our medical stock PPP is ready to run deep! Earnings are coming up soon and it promises to be quit a fight. I feel we may be looking at twin 75% returners in the next 4 weeks. We will continue to hold MGM and FITB while we focus on our two SHARKS. We let the C go even though we felt it would hit our 5 target, it did. No biggie, we needed more line to catch our two big fish. Check emails for the details and targets.

Wow! Rock-n-Roll!

Left early this morning and just got back and.....Our lines got hit hard today! We left our trades floating in the water with no action and then-BOOM! A shark attack! Our portfolio got a whopping 9% total gain today! Just when we we dying of boredom and getting frustrated, we got FISH ON. We are going to let them run...lets hope it's JAWS...dahnna dahna dahna dahnadahnadahna.....AAAAAAAh

Update

The market has been very strong. The financial sector has been leading the way. Our MGM play is doing well and we will continue to hold it. FITB continues to climb and our holders continue to post profits. Our medical stock PPP has been doing nothing; other then one day when a rumour hit the stock. The volume on the stock is so low that when buyers come in, it moves substantially. I believe in the technology and think it is ready to jump soon. When it does, I think it could be a 3-bagger. We will not add more and just hold it for now. Our new position ABC is an old trade that we are trying to play again. It is acting well and earnings should be comming at some point. Either we are going to be a hero or zero in the next few weeks. I have been busy the last few weeks and have not spent a lot of time trading. Too bad-there were some great opportunites. We are kind of just holding our positions since the volatility has been so low and when the market hits your stock, it does so randomly. Check your emails for new details.

P.S. Congratulations to "Lefty" on his Masters Win. A class act.

Still Out: Check Emails

We made a big purchase today of ABC. Tight stops. I'm still traveling.

MGM Update

Continue to hold. We are doing very well. Check your updates.

Update: 3 of 4 Dumped

FLEX, EMC, C have been sold today for a 0,0, +10% gain. We are going to regroup here. The market seems hesitant and we will try for another mover after we do some research. Will continue to hold PPP (our medical stock).

FFFF and EEE Dumped

They were FLEX and EMC...at breakeven...too slow.

Trading Update

We got hit fairly hard in March. I think we got a little arrogant and greedy. We went for the big score and failed to bail when we had the chance and our computers were giving us the signal. That can happen when you start off doing very well. We let our guard down and took some unnecessary losses. You don't have to trade every day. We got impatient and pushed the system. An amature move. We learned from it and now we will move onward. The good news is that we improved our systems and our strategy (hopefully) and are positioned to look for gains. 2 of 4 positions are holding well and starting to move. We will dump 2 today at break-even.Stay tuned for updates and check your emails.

Dream come True!

Today, I again ignored the markets and went to play golf. I shot a -1 par of 70. Missing a 2-foot putt for a 69-I was shaking. I never thought I would shoot par-not to mention break it-in my lifetime! It was sweeter playing with my father, brother-in-law, and my nephew! Our stocks did well too! A great day!

Still Holding: Going to Opening Day

Not much to do today. Taking off for Opening Day! Have a good day.