Its exactly 2:00am PST and I just read your post. I'd just like to say this is the most incredible post that I've read since becoming a member to this site. I for one would like the thank you for taking the time to share your thoughts and let you know that not one word went unappreciated. If you are running for Trading-God status, you just moved one trade closer. sincerely, momo (an alias)
>>> this is the most incredible post that I've read since becoming a member to this site. <<< momo, I used the same sentence earlier to describe one of his posts ... I entirely agree !
rs7, I have a question for you as well as everyone who wishes to answer : When the market goes down ... real bear trend ... just like the current one ... what stocks would you buy ? Assuming you can't trade options, so you can't buy puts or sell calls ... only stocks ... or maybe I should ask, what stocks/sectors have been consistently going up over the years whenever the stock market is going down, and vice versa ?
Defensive stocks generally are stocks like Gillette, PhillipMorris, Anheiser Busch. Companies that in theory should not be affected by a downturn in the economy. The thinking is that people will need to shave, smoke, and drink beer I guess. Their products...non durables, need to be replenished in our households. However, in this market there is very company specific news every day it seems. Tobacco suits, accounting irregularities, etc., So a little research is a must more so than ever ("ever" being in my time frame of experience). Gold stocks are also usually considered a hedge. Defense stocks have been doing well I suppose due to the tensions in the world. Defensive stocks like Proctor and Gamble...a Gillette type stock is, I believe the strongest Dow stock recently. People gotta shower and wash their clothes (and what is more necessary than toilet paper at any time?). Restaurant stocks like Wendy's....People have to eat. But not at Mortons...but then again, the most affluent restaurant frequenters are usually least affected by a slowing economy. So I wouldn't be surprised if a Mortons did well in this environment. Same with say a retailer that caters to the wealthy. Tiffanies probably is less affected than The Gap because of their clienteles strong financial durability. (I am shooting from the hip here....I really don't know what these stocks are doing now..it is just conjecture. I don't even know the symbols to look them up). Grocery store stocks. I guess that should give an idea of what conventional wisdom says to buy. I myself do not trade these stocks very often. I am not an investor, so it is not a real concern. I need to stay with trading the most liquid and volatile stocks. I intentionally try to stay in the dark to a degree to avoid having an opinion. I don't read barons, on Sunday. If I were an investor, I guess I would. I am sure you will probably get some better answers from others. This is not my forte. But since you asked....well I hope I am not wrong. If I am, we will all know about it very soon!
rs7, well .... in as far, that reply makes sense to me thanks a lot ! I'll go search it more ... P.S. Right after I posted my question, I did some search, and discovered that Silver & Gold sectors are indeed the best defensive stocks ... health care too ... back to more search now
I owe an explanation here. "Outlaw" is a play on the word "inlaw"....Outlaw is my brother in law, and my best friend. He just sold his business, and is going to begin trading with me. Yesterday while I was firing up the barbecue, he logged on to my computer. You can see in his post that he took some brotherly type ball busting shots at me. Implying I was a scatterbrain and not as much of an intellectual as others who post here (which is obviously very true). I did not realize that when I went to answer his (Outlaw's) post very late last night that ET was still logged on under his name. So now I suppose that Secco decided I was a sicko. Having a dialogue with myself. I can see how it could appear that way. After I saw what happened, I deleted the post, so now it would appear that seccos comment is out of the blue. But at the time he posted this, my response to Outlaw was still standing, and so seccos' impression was understandable. My apologies! Outlaw is one of the funniest humans on the planet. But he is truly a newbie trader and isn't very comfortable talking about trading. He is, however, very eager to learn, and wants to understand all of what is said here. It is tough for me to "teach" him....we are too close. I encouraged him to come on this site and absorb what he could. I look forward to the day that he gets comfortable with something and lets loose with his humor on this site. We will all get great enjoyment from him. The only person I know who doesn't think he is a riot is; you guessed it...my wife, who is his sister. So I hope this clears the air on the confusion. None of this however is meant to debunk seccos' contention that I am a "sick puppy" or that I need help. I couldn't agree with him more!. :eek: :eek:
Geraldo Rivera opening the tomb of Al Capone and Evil Knivel's son trying to jump the Grand Canyon are two nonoccurring events I've witnessed.
Logical assumption, but not at all accurate. My first trading position was as manager of a trading company on the CBOE. I learned about risk management from a young guy I hired as my nominee. He was a busted out trader who went to work in the risk management department of First Options. When we set up our company, the lady at FOC in charge of customer relations set up several interviews for me to select a floor nominee. One of the applicants was this guy...an employee of theirs (FOC). But she (the FOC lady) knew he would be happier trading, and so it worked out that I picked him. He was still very young at the time, and was a great teacher for me. He taught me my job. I felt funny that I made more money than he did. I thought he had more value to the company than I did. And a great deal of value to me as well. He showed me around Chicago like a tour guide. Knew all the best places to hang out. I wish I knew how to find him after all these years. Have tried.....KEVIN (of WSF)....you around here by any chance? Anyway, after that I had the credentials to trade without anyone over my shoulder to "pull the plug". Not that there weren't times that that would have benefited me. There are always points in time that an objective outlook from a supervisor can be of great value. I think that the reason most prop firms do not let their managers trade is so they can concentrate better on what they need to do as far as monitoring their traders. I was a manager for a prop firm for a few months. I was not allowed to trade. I hated it, and went back to being a trader. But I understood why they would not let me do both.