Monthly Archives: September 2014

The Most Important Lesson That I’ve learned in the Market

Let me share to you one of the most important conversations in “Reminiscences of a Stock Operator”, which depicts the difference between the pros and the amateurs

Reminiscences_of_a_Stock_Operator


Elmer: “Mr. Partridge, I have just sold my Climax Motors. My people say the market is entitled to a reaction and that I’ll be able to buy it back cheaper. So you’d better do likewise. That is, if you’ve still got yours.”

Turkey: “Yes, Mr. Harwood, I still have it. Of course!”

Elmer: “Well, now is the time to take your profit and get in again on the next dip,” said Elmer, “I have just sold every share I owned!”

Turkey: “No! No! I can’t do that!”

Elmer: “Didn’t I give you the tip to buy it?”

Turkey: “You did, Mr. Harwood, and I am very grateful to you.

Elmer: And didn’t that stock go up seven points in ten days? Didn’t it?”

Turkey: “It did, and I am much obliged to you, my dear boy. But I couldn’t think of selling that stock.”

Elmer: “Why not?”

Turkey: “Why, this is a bull market!”
(The old fellow said it as though he had given a detailed explanation.)

Elmer: “I know this is a bull market as well as you do. But you’d better slip them that stock of yours and buy it back on the reaction. You might as well reduce the cost to yourself.”

Turkey: “My dear boy, if I sold that stock now I’d lose my position; and then where would I be? And when you are as old as I am and you’ve been through as many booms and panics as I have, you’ll know that to lose your position is something nobody can afford; not even John D. Rockefeller. I hope the stock reacts and that you will be able to repurchase your line at a substantial concession, sir. But I myself can only trade in accordance with the experience of many years. I paid a high price for it and I don’t feel like throwing away a second tuition fee. But I am as much obliged to you as if I had the money in the bank. It’s a bull market, you know.”


Here’s an example: $PIP one of the solid growth stocks during 2012. from 2.00 went as high as 6.88. I remember back then most of the technical / fundamental analysts only saw this going at 4.00-4.50, after that they thought it was expensive or too high already.

Do you seriously think that after consolidating for 4-years, a stock will just go for a mere 20% move?Do you seriously think that after consolidating for 4-years, a stock will just go for a mere 20%-30% move?


Most traders are so eager to make a quick buck. People label themselves as a “TRADER” thinking they have to trade all the time to make money. In reality, they OVER-TRADE just to feel the fulfillment, the excitement, the rush. They try to watch the market everyday looking for ways to make quick money.  They seek to predict each tick and capture each spike, thus they react to every short term market gyration. They go in and out of their positions with very high frequency. They think they’re so smart for making a quick 5% punt…… only to see the stock they sold move further by another 30% sometimes even 50% to 100%. Then they start wishing for a retracement so that they can buyback.

Oh… the great old buy back THAT NEVER CAME. They only realize their mistake once the stock has made it’s big move– like a 50% to 100% trend up. People fail to realize that the biggest trades doesn’t require much effort nor force. It’s just a matter of being right, and sitting tight. (which is easy to say, but very hard to do.), Traders don’t have to fucking trade all-day. Problem is most of us do not aim for the BIG $$$Money. Many of us subliminally stay in the markets just to fill our psychological need for EXCITEMENT.

Remember, BIG moves take TIME to develop. It is quite ironic, but for me, one of the most important aspects of being successful in the market is to have the discipline and patience to stay away from the screens when the market is already going according to your flow. This means shrugging off all the impulse and the excitement that you get from seeing the current premature profit your position is showing. 


Most amateurs feel excited during trading, because they are acting on impulse. Pros rarely feel excitement, because they are acting on their SYSTEM. There is no emotional attachment to a single particular trade, each trade is just a statistic. Pros are not here for the thrill, they are here to MAKE MONEY–BIG MONEY. 


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Sa mga chicks or for those who have queries, questions, suggestions, trashtalks, you may hit me up on my facebook account

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September: Playing a Different Ball Game

September: Playing a Different Ball Game


 

Entering September, I thought it was time to go back to blue chips. Thus my portfolio looked like this:

sept 08, 2014


 

My signals were showing strength with the index breaking 7200-7300…. Various blue chips was looking solid… so you see names like RRHI, SMPH, AGI on my port.

but then, this shit happened.

pseiwarning

holdings fade pmini fade property fade



Financials
were an exception though, this might give the index a ray of hope.

financials ex


 

I took this as a warning sign. I think that most index names will be stagnant for awhile, so I decided to I trim my whole portfolio and left my defensive picks $MWIDE + $MPI.

Since most of the sectors looked weak and dull, I have decided to be overweight BASURA and GAMING.

Why not financials? I opted not to just because I think the reward is small.


Here’s a view of the Shabu Portfolio

port sept 12

See it’s not all profits right? This is a different ball game. But at the end of the day, it’s all about being overweight strong names at the right time.

(I blocked off all basura names that are under accumulation both for the benefit of the reader and the poster.)


Why Basura

1) KASI SIRAULO YUNG MARKET.

2) wala lang. trip ko lang.


 

This is the main trigger of the BASURA FRENZY

ISbasuralord

 

So I figured, the market will probably look for more plays like this.


Examples, of my recent basura chamba moves

$ORE

ore

orebuy

oreport

Just to show that you that I practice what I preach. Well ito medyo obvious kasi susunod lang sa $MARC. Sold everything at 3.00 downwards.


 

$MG

MGchart

mgshabu

mgsell


Trade of the millennium ko sana, kaso tinira nila agad. Profit is profit. Sold most at .58 after seeing it fail to hold the .60 level.


As usual if the index goes stale, speculators and the usual pundits will resort back to the old “tira dito, tira doon” style. It’s a matter of knowing which of these penny stocks have the potential.

Tip lang sa NEWBIES. Wag masyado greedy sa basura. It’s a different ball game. Walang AWA mga kalaro mo dito.

There will be times where you’ll feel like a genius riding high fliers, getting ceiling plays and all, but you have to determine how to do this CONSISTENTLY.


Ask yourself, did you just get lucky? or can you identify high fliers in a consistent manner?

Tighter risk controls, specially if you don’t know what you’re doing.

Di araw-araw pasko. Always define how much risk you can take when taking these kinds of trades. When I have a basura that is not working based on my expectations I don’t hesitate to throw it away, even if it’s a 10% loss, after all it is GARBAGE, right?


Moving on. So why Gaming?

When the general market looks weak, those who remain strong MUST BE REALLY STRONG.


$LR

This was one of the strongest names according to my system going into September. It detected MCP + BEL as well, which I have exposure as well in my other accounts. But I chose to be overweight $LR because it gave the strongest signals. Since I liked LR, I also accumulated $LRW for a more speculative play.

LRzoom

Earlier, I posted about $LR  in my Shabu Analysis 2 (Check it out here), highlighting 8.40-8.50 as a critical range. It was sold down temporarily at 7.90-8.00, but then it rebounded quickly, and blasted its way past that resistance closing at 8.80 with huge demand on bid.

This kind of set-up is the forte of my system. Specially when most of the market is weak, that’s where you’ll see the outliers.


Anyway, that’s about it. I will stick to gaming and basuras for the mean time. I’ll only revert back to beta sectors once I see clear signals. 


You might see me post charts from time to time but that is NOT an indication to BUY, remember that. 

With all the information available in the internet, please do yourself a favor and always put in your own diligence before making a trading decision.

That’s all. May we all have a profitable month ahead!


 

This blog aint a reco to buy or sell shit. This blog is mainly my journal meant for sharing, and entertainment purposes. Don’t take everything too seriously. Wag nyo po ako susumbong sa PDEA.

Charts are provided by: http://investagrams.com/ 

Feel free to subscribe if you want to follow what’ll happen to the SHABU PORTFOLIO. 

Sa mga chicks or for those who have queries, questions, suggestions, trashtalks, you may hit me up on my facebook account


Maneuvering the Shabu Portfolio to All-Time HIGHs

THE SHABU PORTFOLIO
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Sup! After being busy for the past few months, I’m now back in action. Before we start, let me just tell you bout some changes:

First. I am now focused full time into trading for myself and fund-management for clients. I can now move more actively and aggressively in the market if I choose to do so. Before, I could not play quick trades because I was so caught up with my job and other responsibilities.

Second. I won’t be showing portfolio values anymore, since capital has increased vs the amounts handled in my previous blog posts. And laganap ang mga kidnapper. lol

Third. After spending several years in the SHABU LAB, I am now a more systematized trader.

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Let’s Begin. 

Global equities are hovering around all-time high levels. If you read in my earlier posts, I was mostly bearish entering the year, but I didn’t let my opinions interfere with what the market was showing. Factoring in all the QE/money printing bull shit all around the world, one can get scared with all the excess. However, the craze is still on and markets all over the world are showing they ain’t scared.

You can say people are probably getting complacent, but as a trader we just follow the money and listen to what the market is saying.

Opinions won’t make you money, trading on the right side will.

This quote is very relevant nowadays since we have lots of people in social media sharing views, analysis, hypes, bull shits and what not. If you see a super comprehensive, logical, fundamentally sound analysis / opinion from a veteran, think twice before betting your balls.
LEARN TO BE INDEPENDENT, always take responsibility for your trades.

At the end of the day the market dictates which views are relevant and which ones are trash.

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Even if I had a bearish view I was almost always 100% in terms of portfolio exposure, it did not matter to me since I was focusing on low-beta plays. I wasn’t able to ride market leaders DNL and NIKL, but I found other ways to make money. Since I thought that the index sucked, I focused on mining–which built up 50% of my portfolio before I started trimming on rallies.

Here’s a glimpse of my port on Aug. 13, 2014 (I have trimmed already at this point)

Censored Aug 13 Port

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Why the f*ck Mining?

Mining was clearly one of the leading sectors this year.

mining index miningzoom
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Why AT, MARC and PX? 

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$MARC

Since I wasn’t able to hold NIKL, I focused on its brothers. Many people were selling because of the suspension. Good thing my signals were telling me otherwise. I was overweight this with about 1/3 of my port. Again let me emphasize: Opinions won’t make you money.

I sold most of it at 6.80-7.20, before it crashed back to 6.00, I wasn’t able to buy back, so I bought $ORE instead LOL

MARC break

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$AT

Sold 16.80-17.00


AT5yearATzoom

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$PX

Been accumulating this since 9+, then added on breakouts of 10-11. if you look at my port my avg price would be high already since I tripled my size at 11+, because it looked like a high probability 12. It did go there, and I threw most at 12.50 on the way down.

pxbreak

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As for MWC

Since I was mainly bearish, I didn’t want high-beta names. I stuck with this for 5 months. Sold at 29.50 downwards. Good thing it’s now back to 28!!! wooo! I almost thought it would breakout of 30.

MWCtargets

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These were the main plays of the Shabu Portfolio that made me money in the month of August.

Again, I was trading the whole year with a bearish view, but because my signals were telling me otherwise… I looked for ways where I could get exposure to strong names that had stories of their own or had low correlation to the common shit that fundies hold.

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August was a generous month. I am quite thankful that the SHABU PORTFOLIO is at ytd highs, and is currently doing more than double my benchmark’s performance. I have also beaten my 2012 ytd, considering that I’m trading a bigger size now–not bad.

September may be more challenging.. yet more interesting. I saw something that made me decide to implement a different approach moving towards the “ber” months.

You can check it out on my next post. (Link to be inserted here)

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This blog aint a reco to buy or sell shit. This blog is mainly my journal meant for sharing, and entertainment purposes. Don’t take everything too seriously. Wag nyo po ako susumbong sa PDEA.

Charts are provided by: http://investagrams.com/ 

Feel free to subscribe if you want to follow what’ll happen to the SHABU PORTFOLIO. 

Sa mga chicks or for those who have queries, questions, suggestions, trashtalks, you may hit me up on my facebook account

Shabu Analysis

From time to time, I’ll be posting my view on stocks that I find interesting. Please note that these stocks have already been filtered in my “Shabu Screening Program”. I have back tested my program since 1969 and I can say that I have a 69% hit rate. I don’t care if I miss, I just throw it out and cut immediately and move on to the next play.

I won’t post any buy signals, or any technical indicators, rather I’ll just highlight certain Shabu Levels–ranges that help me determine my buying/selling decisions. Kanya kanyang diskarte na yan.  It’s up to you how you look at the chart.

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Here’s this weeks highlights:

LR

Gaming leaders SINO + BLOOM have emerged already. I think this baby is next in line. I think gaming will be a strong theme moving towards the latter months of the year. Watch MCP + BEL too.

3-year down trend broken, likely to break 8.40-8.50, then move forward to 9-10.

LR sept 08
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PAL

RSA sold it for twice the amount he paid for during 2012. (bought 49% at $500m, sold at $1B). Coincidentally, it has been on a slump since RSA bought in. What will happen now that he’s out of the picture. Let’s see how the market reacts.

CEB holding its solid trend, I think it’s time for Airlines to shine. OIL prices continue to weaken. Many factors why airlines are now gaining interest.

2 year + down trend broken, hovering at 6.00, bound to tackle 6.50, then 7.00 then HEAVEN

PAL sept 08

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ORE

Kinda lagging among the nickel miners NIKL + MARC + CMT, but for those who want catch up in the Nickel Crazeyou can check this out.

Broke its 2.40 resistance. You saw how it flew to 2.90 awhile ago. Seems like this still has potential, all depending on how the big boys handle the ride. A convincing breakout of the 3.00 level will definitely make things more interesting.

ore sept08—-

That’s all for this week, if you want to receive FREE stock updates just add me in Facebook (click the link or just search Imbang Klase), you can also subscribe on my blog to receive email updates.