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The Time & Money Group – 2nd Anniversary

The farther the calendar moves away from 3/31/2006, the day I walked away from a 20 year career in Sales, Marketing and Engineering, the less I have to explain why I said good-bye to a 6-figure job to trade full-time on my own account. That’s good, because it was pretty hard to explain anyway. The job was rewarding. I worked with great people. So, what was the problem?

I was never cut out to work a job. I am an entrepreneur by nature. I love trying to make something happen. Risk and uncertainty are not scary to me. Now every day that I wake up – I am faced with these challenges.

Interestingly, when you migrate towards your true passion – the money follows. My lifestyle hasn’t changed one bit since I quit the 9 to 5. I haven’t missed a meal. We still have our house in the suburbs and drive nice cars. Our vacations have actually upgraded a little.

Interestingly there are now some people who have only known me as a financial guy. Most think that I am some kind of financial advisor. I still haven’t come up with a good quick way to explain what I do. A stock trading financial freedom advocate will have to do for now.

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Let Your Winners Run and Cut Your Losses Quickly

Wall Street has many great sayings. One that I try to live by is “let your winners run and sell your losers quickly.” Many people buy into the “letting your winners run” part, because they have also bought in to Wall Street’s buy and hold philosophy. However, unless you are planning on “letting your winners run” until retirement – you will need to sell at some point. So when do you sell. In particularly, when do you sell a winner? Let’s take a closer look.

If you really think about it – you have two options for selling a stock: selling as it is rising (into strength) or selling as it falling (into weakness). To accomplish yet another famous Wall Street saying, buy low and sell high, by definition – one must sell into strength.

Selling into strength is a proactive trading strategy. It requires selling when a stock is still rising but is expected to reverse. The problem is trying to determine if a stock is preparing to reverse or if it is simply pausing on its way higher. This is a critical decision point.

Continue reading “Let Your Winners Run and Cut Your Losses Quickly”

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Bear Stearns Fiasco a Reminder for Us Little Guys

It is getting uglier and uglier.  Bear Stearns (BSC) a major Wall Street investment bank nearly filed for bankruptcy this weekend.  In a fire sale, J.P. Morgan with backing from the Fed bought Bear Stearns for $2 per share.  Bear Stearns closed at $30 per share on Friday.  A little over a year ago, January 2007, Bear Stearns traded at $170 per share.

It is simply amazing how much wealth is being lost during this “financial mess.” Billionaire investor Joesph Lewis is light about a billion bucks since his ill-timed investment in Bear late last year.  That will sting a little, but he will be OK.   However, there are many regular folks at Bear Stearns who are in the red zone (0-5 years from retirement).  Their retirements have been delayed, significantly modified or simply won’t happen. 

The reason for this blog is that I know many people who have substantial assets tied up in their company’s options and stock programs.  Like they say, a recession is when your neighbor gets laid off – a depression is when you get laid off.  I am not sure what they say when your retirement gets wiped out, but it “ain’t” good. 

Diversify. Diversify.  Diversify.

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Friends of TTaMG have been maneuvering quite well during this market turmoil.  As of 3/14/08, our Real Money Portfolio is up 8.5% v. -12.8% for the S&P 500.  

Check out a sample report and then become a Friend of TTaMG.

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Now is Not the Time to Listen to Wall Street

In my report last week to my subscribers, I said the following: 

“Some may recall that last year – our timing on becoming fully invested wasn’t the best.  On almost every occasion it usually preceded a sell off.   Hopefully this time will be different, but let’s not be too careless.”

Based on Friday’s action, I don’t think that this time will be any different.  Although our Real Money portfolio closed up 1.1% for the week, it sold off 3.3% on Friday turning a great week into a good week.  All of the major indices sold off around 2.5% for the day and closed down for the week. 

Matter of fact, Friday marked the fourth consecutive losing month for the market.  I looked back over the past 10 years and this is the third time that the market (as represented by the S&P 500) has strung together four losing months.  The other two times happened 2001 and 2002.  We haven’t had five losers over that time period.  If we do happen to break the streak – we will undoubtedly be in an official bear market.  Many are already claiming that we are already there. 

Bear markets conjure up significant anxieties amongst individual investors.  Interestingly its Wall Street’s buy and hold crap, sorry for the vernacular, that does most investors in.   Continue reading “Now is Not the Time to Listen to Wall Street”

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Free Time & Money Report 2/25/08

Thanks for stopping by and checking out the site.  As a bonus for visiting, I have made available the latest and greatest Time & Money Report.  This report is released each week to Friends of TTaMG.  Intra-week buy and sell signals are also issued when appropriate. 

As of 2/22/08, our Real Money Portfolio is outperforming the S&P 500 by 17.2%.  The Real Money Portfolio is up 9.4% v. S&P 500 -7.8%.  With that kind of performance, it won’t take long to recover your $20/month subscription fee.  Check out the freebie and then become a Friend of TTaMG.