Slope of Hope Blog Posts
This is the heart and soul of the web site. Here we have literally tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. You can also click on any category icon to see posts tagged with that particular category.
There’s something I’ve noticed on Slope that I find perplexing, a little troubling, and ever-so-slightly amusing. Whenever I write anything that seems to be a prediction, some people get their feathers quite ruffled. Indeed, it seems to kind of piss them off, and they pound their virtual fists on the virtual table and declare that no one can predict anything, and that it’s an arrogant waste of time to even attempt it.
I’m in the business of prediction. Principally, I use historical price charts to try my best to suggest what the future holds. That sort of thing doesn’t seem to bother folks. On the contrary, it’s kept Slope popular, to varying degrees, for nearly fourteen years.
However, when I make, shall we say, textual predictions, some people object. I guess all I can say to that group is………you might as well stop reading the post now, because I wanted to offer up a few speculations about what’s ahead. I am by no means a futurist or an expert in societal trends. By far my biggest “this is what’s coming” success was the 1983 book I wrote, which I’ve mentioned here before, called The World Connection, which predicted our online world with Nostradamus-like accuracy. (more…)
Well, THAT was something, wasn’t it?
I’d like to recount the past 24 hours for me. Just a way for me to share some thoughts, for whatever they may be worth. Perhaps there are some insights buried in these words for others so that it’s not just a self-absorbed narrative.
As regular readers know, I had taken on the decidedly un-Tim-like stance of turning bullish. To be precise, last week I reduced my short positions from 90 to 30, increased my long positions from 0 to 4, and had reduced my overall exposure from 300%+ to 135%. In short, I was ending the week with much lower risk, much lower opportunity, and an eye toward a bounce.
I was eagerly awaiting the open on Sunday. I kept scanning the news, and there was nothing particularly market-moving going on, with the exception of the radical-right nut job winning the Brazilian Presidency, which was actually kind of bullish. Even ZH couldn’t seem to find anything really big to worry about. (more…)
First off, I urge you – -nay, insist! – – to check out the incredibly sexy and fantastic Quarterly Reports page. Oh, my God, it’s beautiful!
Second, I wanted to tell you that I’ve covered a ton of positions. And by “ton” I mean I’ve gone from 300% margined to only about 95%, and from 90 positions to 35. For someone like me, this is almost like “nothing but cash”. Now let me be clear, I hate taking profits. Just hate it. Here’s why:
- The opportunity is gone. Well, mostly. I still have some shorts. But if we crash, I’ll feel like stupid.
- The thrill is gone! It’s FUN to see profits explode when the market is falling.
- The entry prices were DYNAMITE. I’ll never get prices that good again!
We are only 18 trading days into the final quarter of the year, and part of me wants to close out everything, chalk up a profitable year, and be done with it. I honestly don’t think I’ve had such a powerful run in such a short span of time since, well, a decade ago. Going entirely into cash right now would take risk to zero and allow me to lock in all these fabulous profits.
Just look at how quickly things have become undone. That sliver of time on the right utterly unwound the long slog of gains shown in green. Sell-offs are swift and severe, aren’t they?
A reader sent me an email which asked: “I have a question about stops…once before you mentioned that you limit your losses to think 1-5% using stops. How do you decide whether its 1%, 2% or 5% etc? And can I assume that some of your losses are very small numbers like $150 and some are thousands of dollars? ”
As I’ve tried to say before, I avoid responding 1-on-1 to just about anything, so I told the gentleman I’d write up a post about this topic. So here are a few points, in no particular order, about how I set stop-loss levels: (more…)
We recently introduced a page that I don’t think has an equal on the Internet – – it tells you the present value of any equity investment you made in the past as well as the worst drawdown during the span of your personal holding period. You can use the page by clicking here.
I discovered, however, a mistake in the arithmetic on the original deployment. The drawdown would tell you how much you might lost from your entry price. I thought a more useful definition – – particularly given the psychology involved – – would be the loss from the peak value to the lowest value during any period of your holding. We’ve made this correction, and I think the improved results speak for themselves.
Have fun with the regret! It’s quite a painful page.
If you think I ever stop thinking about Slope, just look at the side of my pool. As I am doing laps, whenever I have an idea, I grab a chlorine tablet and scrawl it on the side. By the end of my little workout, I’ve usually got a bunch.
After the market closed today (Monday), I saw on my news feed that Verifone Systems (PAY) had agreed to be acquired at a huge premium to its closing price, about 50% higher than the market. That’s not especially interesting news to anyone that doesn’t have a position in the stock, but I do. And it’s a short position. And that, as you might guess, is not a good thing.
I am sharing this bit of bad news as an object lesson in risk management, however. Because after I found this out, I asked myself the following questions and gave myself the following answers: (more…)