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I had funds with Birinyi until end of August this year. He actually saved my
butt by dumping me out of stocks completely early in 2001 (he does not act
as a Hedge Fund so does not short).
His methodology is not a big secret, and I still do subscribe to his way of
thinking.
Basically, instead of using available volume reports, he would accumulate
every single solitary tick on every listed issue in the market (!!!) to
decide whether it represented accumulation or distribution. He then created
his own A/D charts that were like no other (at the time, I'm sure it's been
copied many times over by now).
Based upon his own unique mixture of Fundamental knowledge, plus watching
for interesting divergences between price and his custom A/D line, he was a
momentum player. Problem was, linear momentum became chaotic.
His newsletter in the last couple years decried the loss of what you called,
"The Good 'ol Boy Network", and it's negative effect on transparency,
because if news had to be released all at once, then it might as well not be
released at all... (boy have we seen the fruits of that come true). He also
foresaw a loss of predictability because of an increased "hysterical
reaction" to news in the market, again caused by the easy proliferation of
such news. He showed many examples of a Blue Chip like IBM, wildly swinging
on news of some pipsqueak tech startup, and his point was... how the hell
does one enter and hold? His conclusion (over 2 years ago)... was that the
current environment is a traders heaven, and hell on wheels for funds.
My reaction to this was always the same... either we deal with it, or we go
into a cave somewhere.
As for any "programs" he might have devised, he would occasionally daytrade
on my account, long only, and I'd say it was about 95% accurate, but these
trades only came along rarely... not even enough to pay for his reasonable
fees.
Do I believe he's adapting? Yes, reluctantly. I also know that he's a man of
extreme integrity and intelligence. One of a kind. But when I look at where
to put my cash now, I'm beginning to seriously consider the "anchor"
theory... that when I get back into Buy/Hold, that it will be with a less
aggressive fund that really goes for the long term... They exist, I've
interviewed a few already. Most of the cash goes there. Then X% remains as
trading funds... so the risk is compartmentalized. Bond ladders stay the
same.
Best regards,
Gene Pope
----- Original Message -----
From: "Charles Meyer" <chaze@xxxxxxxx>
To: "REAL TRADERS" <realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, September 27, 2002 11:08 AM
Subject: [RT] GEN: CROSSPOST ON VOLUME, LASZLO BIRINYI AND LIVERMORE
>
> ----- Original Message -----
> From: Charles Meyer <chaze@xxxxxxxx>
> To: <WyckoffStudies@xxxxxxxxxxxxxxx>
> Sent: Friday, September 27, 2002 10:03 AM
> Subject: Re: [WyckoffStudies] Jesse Livermore's story (PDF format)
>
>
> > Hi-
> >
> > Ditto to your comments about this classic reference reread. Since this
> > group has been
> > discussion VSA, etc. I wanted to call everyone's attention to an
> > organization called
> > Birinyi Associates. The contact info is: (203) 629-2400; Box 711,
> > Westport, CT 06881. I am
> > also sending to the list some info about his volume work which appeared
in
> > the Feb, '93 issue of
> > TASC. Two things of interest here. First; he used to be a former
> director
> > of Salamon Brothers.
> > Why is that importnat? Because SB (now SBSB) was and is one of the
major
> > players in the
> > arena of program trading. They are also part of the good-ole-boy
network
> > and have access to
> > tons of information on a daily basis. They see stuff we mere mortals
are
> > denied; in the way of
> > data and especially money and volume flow. To try and make a long story
> > short; Birinyi has
> > done a lot of research with volume and cites Livermore in the magazine
> > article. I contacted them
> > a few years ago; and they make available a service but its quite
> expensive.
> > Perhaps we could
> > figure out what he's doing.<g> Feel free to cross post this to another
> list
> > for thoughts and
> > comments.
> >
> > chas
> >
> > ----- Original Message -----
> > From: Dan Nicol <dan_nicol@xxxxxxxxxxx>
> > To: <WyckoffStudies@xxxxxxxxxxxxxxx>
> > Sent: Friday, September 27, 2002 9:32 AM
> > Subject: [WyckoffStudies] Jesse Livermore's story (PDF format)
> >
> >
> > > Hi All,
> > > I've come across a link, from the yahoo Gann study forum. It
> > > contains a free download of the Mr Livermore's classic Reminiscences
> > > of a Stock Operator. It's in a PDF format so you'll need the Adobe
> > > acrobat reader to see the text.
> > >
> > > <http://www.stock-market-seminars.com/downloads/reminiscences-of-
> > > jesse-livermore.pdf>
> > >
> > > I'm almost half way through and it's excellent. How much is true I
> > > don't know but it contains many gems and is well worth the time.
> > > His tales from the bucket shops are intriguing, and his struggle to
> > > adapt his trading style from the bucket shop to the brokerage house
> > > very interesting. He was wiped out many times but got back off the
> > > floor more times than Rocky. I'm sure most of you have read this
> > > book but if you haven't I'd highly recommend that you do. You will
> > > learn more from this book than you think, I promise.
> > >
> > > All the best,
> > > Dan
>
>
>
>
>
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>
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