Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

The Value of Thin Bets

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Each morning, before the market opens, I fire up my trading platform to see what's happening. Invariably, I'll see some positions with gigantic "losses", because the bid/ask data is just plain silly (e.g. for a $15 stock, it might show a $10 bid and a $20 ask, until such time as the market is actually open). So most of these are false scares.

One of them this morning – APL – was not. This was a short of mine, and it was getting bought for a 35% premium. Not a great way to start the day!

However, this position represented 0.34% of my portfolio, so it was hardly devastating news. Was it good news? Of course not. Would it wreck my portfolio? No. I spread my positions thin. Of course, if the stock dropped 35%, it would also mean that my short wouldn't make a meaningful positive difference either, but everything is a two-edged sword, isn't it?

0728-apl

Mexican Disappointments (by Nathaniel Goodwin)

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I’m back from my journey to Mexico and successfully brought Ted’s new car back safely. I’ve never been arrested in my life here in the USA, but down there they seem to have a much stricter penal code. My ignorance of Mexican laws did get me in a bit of trouble, and I was arrested over 14 times. A couple of my crimes included walking down the wrong way of a one way street, speaking English outside of a church during mass, wearing shorts on a Tuesday and riding a bike without knee and elbow pads.

The funny thing was that each time I was arrested by the policiales, my fine was the exact amount I had in my wallet at the time. One other odd thing in Mexico is that the used car salesmen carry AK-47’s.

A real bummer for me was coming home and watching “Master Chef” on Fox. I have been pitching the most awesome reality cooking show ever created to all of the major networks, and I see that Fox has picked it up…. Unfortunately, they took my idea and I don’t seem to be included in the production. They did get Gordon Ramsey though which is pretty cool though.

Well I’m glad I shorted Fox broadcasting via NWS on Tuesday, which makes me feel a little better. I hope it crashes and burns; however, some of my breadth indicators are still looking bullish and the show is awesome which could propel NWS to new highs. Still good risk reward in my eyes though.

NWS
 

As Simple as ABC

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Today I covered a position in the world's simplest ticker symbol, ABC. I had shorted this stock when it broke its ascending trendline (circled). It had fallen about 14%, and as it approached its former breakout level (the horizontal line), I covered in the tinted green zone. Because this chart only covers a portion of the entire price history, it isn't clear to you that the horizontal line is a big breakout, but trust me on this one.

0727-abc

I offer this as an example of a rational time to "take profits". Yes, this stock could go lower, but this seemed like a logical time to reduce risk and take the 14% given to me.

Trading Rules from the Marines

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I look at charts so often, I usually have to have something on in the background to keep the rest of my brain from rioting. Typically, that "something" is usually a movie or some music, and today I put in Full Metal Jacket (which, like most of my DVDs, I've seen many times).

Semi-watching the movie made me curious about the Marines, and I found this really interesting code of principals, which I've put below. It's an impressive list, and I think every element shown here is relevant to trading. Please read it:

INTEGRITY
Uprightness of character and soundness of moral principle. Absolute truthfulness and honesty.

KNOWLEDGE
Acquired information, including professional knowledge and understanding of your Marines.

COURAGE
A mental quality that recognizes fear of danger or criticism, but enables a Marine to proceed in the face of it with calmness and firmness.

DECISIVENESS
Ability to reach decisions promptly and to announce them in a clear, forceful manner.

DEPENDABILITY
The certainty of the proper performance of duty.

INITIATIVE
Seeing what has to be done and commencing a course of action, even in the absence of orders.

TACT
The ability to deal with others without creating offense.

JUSTICE
The quality of being impartial and consistent in exercising command.

ENTHUSIASM
The display of sincere interest and exuberance in the performance of duty.

BEARING
Creating a favorable impression in carriage, appearance, and personal conduct at all times.

ENDURANCE
The mental and physical stamina measured by the ability to stand pain, fatigue, distress, and hardship.

UNSELFISHNESS
Avoidance of providing for ones comfort and personal advancement at the expense of others.

LOYALTY
The faithfulness to country, Corps, unit, and to your seniors and subordinates.

JUDGEMENT
The quality of weighing facts and possible solutions on which to base a sound decision.