|
PureBytes Links
Trading Reference Links
|
Paul, I beg to differ. Len used fundamentals as an initial filter in
looking for stocks to day trade. In particular, he is looking to avoid
the more volatile stocks, and ensure a higher level of financial
rectitude. He never suggested he traded off fundamentals. There is not
much difference between his methodology and the standard practice of
using longer timeframes to determine direction and then trading short
term in that direction. Perhaps readers should pay attention to what has
been written rather than impose their own beliefs on another's words...
Dan Goncharoff
Szilassy wrote:
>
> Len, again, fundamentals have no bearing whatsoever on downside risk and
> upside potential in the SHORT-TERM. Your focus on fundamentals and
> bottom-fishing tells me that you are of an investor mindset, so based on all
> you have written, you should stick to long-term picks in your trading.
> Again, this is my opinion based on MY experience and the very beneficial
> tomes I have read in the realm of daytrading and position trading.
>
> Take care,
>
> Paul Szilassy
> -----Original Message-----
> From: Len Olson <lto@xxxxxxxx>
> To: szilassy@xxxxxxx <szilassy@xxxxxxx>
> Cc: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Date: Thursday, February 04, 1999 8:07 AM
> Subject: Re: Hello, Who I am
>
> >Dear Paul,
> >
> >The reason I concentrate on fundamentals is to minimize downsize risk.
> >If the company is solid financially AND makes timely SEC reports, to me
> >it means that that it is a real company that is either making money or
> >is in a position to weather a storm. Secondly, when a company such as
> >this is in a sector that has been beaten down that adds further support
> >to the stocks bottom end, again minimizing risk. To me, if you do not
> >spend the time to thoroughly research a stocks fundamentals, reported
> >results and consistency with the business plan, then you are truly
> >speculating. Unfortunately, true speculation is simply gambling. I
> >gamble at the poker table, not my capital.
> >
> >BAMM is a good example, and I did research that pick. When I saw its
> >financials, (breakeven at best), I was not impressed. More importantly
> >when I found that the insiders were selling better than half of their
> >position, I knew it was fly by night, and I passed on that one.
> >
> >Of course, I know that the stocks are manipulated which is the basis for
> >even having a market, but I prefer to go with companies that I feel
> >comfortable with, (namely, consistent performance, followed very
> >closely by price action and volume). This approach works very well for
> >me. I will leave the AMZN and SIEB to others. Sure, quick rise, but
> >devastating falls. I like to pick up a grain of sand every day.
> >
> >I appreciate your feedback and look forward to future exchanges. Take
> >Care.
> >
> >Szilassy wrote:
> >>
> >> Hi Len,
> >>
> >> With all due respect, if you are engaging in nothing but daytrading and
> >> speculative position trading such as that you describe, you are wasting
> your
> >> time reading SEC reports and poring over fundamentals. That information
> is
> >> for long-term investors.
> >>
> >> Initially it was hard for me to make the transition as well, but
> currently -
> >> aside from reading as many news blurbs as I can before and just after the
> >> open to determine which stocks are in play - I rely entirely on a very
> >> simple form of technical analysis which incorporates nothing but price,
> >> volume, and a filter or two. With all the manipulation by market makers
> and
> >> our breed of trader (which last I read, was estimated to be 5 million
> >> strong!), if you want to be successful, you have to forget about the
> fairy
> >> tale concept that fundamentals will move share prices regardless of time
> >> frame. Buy some books with time-honored success, common sense, and
> >> simplicity to the approach (Joe Ross and Mark Cherlin have recently
> >> co-authored several like this - I have read two of them, and they are
> >> excellent). You will not regret the few hundred dollars that books such
> as
> >> these will cost, as it is an investment in your future.... not to mention
> a
> >> tax write-off at year-end if you qualify for trader status.
> >>
> >> I use the term speculative above, as your NBR trade could have JUST AS
> >> EASILY turned around and left teeth marks on your posterior. Trying to
> >> pretend that you are "smarter than the market" is one surefire way to
> lose
> >> your trading capital - trust me, as I suffered from a similar delusion
> >> previously. Market inefficiencies exist because of short-term
> manipulation,
> >> pure and simple. Study the recent examples of BAMM, AAGP, DLIA, etc. and
> >> the current situation with JBOH for your own confirmation. The sooner
> you
> >> can accept this most basic tenet of short-term trading, the more likely
> your
> >> success as a trader.
> >>
> >> Happy trading and best regards,
> >>
> >> Paul Szilassy
> >> -----Original Message-----
> >> From: Len Olson <lto@xxxxxxxx>
> >> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> >> Date: Wednesday, February 03, 1999 3:34 PM
> >> Subject: GEN: Hello, Who I am
> >>
> >> >Greetings to All:
> >> >
> >> >I am new to this forum and wanted to introduce myself.
> >> >
> >> >Like alot of traders, I am a disillusioned professional who wrestled his
> >> >money away from a traditional broker a few years back. I found out that
> >> >I pay more attention to my investments than he ever did. Result, I now
> >> >do better. I like to think that I have made every mistake in the world
> >> >when it comes to trading. Of course, that is not the case:
> >> >
> >> > Here's an example: I bought NBR on a Thursday about two weeks ago based
> >> >upon my belief in the company and the fundamentals, regardless of the
> >> >analysts. I had trouble getting to sleep that night. In the morning,
> >> >my brother brought me out of a daze with a phone call at 8:20 central
> >> >time and said "NBR gapped up 3/4". So i thought man I need to trade.
> >> >(I'll take a .50 profit in less than 24 hours anytime). So, I stumbled
> >> >out to the office, turned on the PC, and tried to sip coffee while my
> >> >vision cleared. As soon as I was logged on, I went to the trade screen
> >> >(WebStreet). What I didn't understand my brother to say was that the
> >> >stock gapped up 1 1/2 to 14 3/4. Well, I got a little excited, (vision
> >> >still blurry, still medically asleep).
> >> >I placed my order. I received a notice that my order had been
> >> >received. (When a stock gaps up like this, I usually place my sale at
> >> >the current bid to move it). This long story shortened: I forgot to
> >> >change the trade to a SELL from BUY. I ended up buying another 1000
> >> >shares at 14 11/16. Thankfully, I did sell the first 1000 at 14 1/4,
> >> >and I was able to average the second 1000 down at breakeven. I lost a
> >> >$750 opportunity, a gift.
> >> >
> >> >I track approximately 20 stocks religously spread between airlines, oil
> >> >services, retailers, and technology. I steer away from e-commerce
> >> >companies unless based upon solid brick and mortar operations. I will
> >> >not trade a stock unless the fundamentals and SEC filings are 100%
> >> >solid. I do not give alot of credence to analyst, because they are
> >> >driven by other factors and influences which IMHO tend to stray from
> >> >true basic analysis. Here are some of the things that I look for:
> >> >
> >> >P/E preferably 10 to 15, up to 20
> >> >D/E under .8
> >> >SEC all filings on time, without nonsense
> >> >Mgt in line with business experience and business plan
> >> >Growth between 12 and 20%, less is insufficient, more is probably an
> >> >anomaly or at a minimum posing problems for continued expansion
> >> >Price between eight and $22
> >> >
> >> >The most important factors for me are daily price action and volume.
> >> >Price action provides the opportunity to take advantage of daily highs
> >> >and lows, and volume provides the ability to sell a stock. My average
> >> >holding period is 1.3 days, and my average profit margin is 1.6%. I
> >> >like companies that do not have alot of news but show consistency. I
> >> >generally trade in blocks of 1000 to take advantage of small moves.
> >> >However, I have been known to take larger positions and wait. I am
> >> >currently tracking ALLC, BJS, NBR, PESC, CD, KM, HAST, RMDY (which I
> >> >should have trusted my instincts on), TWA, PAIR, and EVER.
> >> >
> >> >My goal each day is to select four or five stocks to play. I attempt to
> >> >make 2% in each roundtrip. If you are about to make a mistake, I have
> >> >probably made it. I truly appreciate educated criticism and
> >> >suggestions. I call my approach "Grain of Sand".
> >> >
> >> >Take Care
> >> >
> >
|