Do you find yourself on a performance roller coaster? This is a situation in which you make money for a while, begin to think you have it all figured out, only to fall back, lose money, and feel like a rookie all over again.
A while back, I wrote about the performance roller coaster and some of the emotional factors that sustain it. The gist of that important post was that how we process wins and losses affects our subsequent trading--and sometimes contributes to winning and losing streaks.
I just finished an enjoyable interview with Mark Wolfinger of the Options for Rookies site. One topic that came up was the way in which traders identify with their P/L. Once a trader’s sense of identity and esteem becomes caught up in profits and losses, the trader begins an emotional roller coaster simply due to the natural ups and downs of markets.
Well it sure was for us as my 10:01 Alert to Members was a play on the DIA Jan $103 puts at .56. Thanks to the late afternoon dip, they finished the day at .90 (up 60%) after peaking out at .95, a very nice win to close off the year. That was the only Alert trade all week as this market has been too tough to call and we don't make trades just for the hell of it. I had been sniping at DIA puts all week expecting a pay-off but Thursday it finally came together.
Of course, I also strongly advocated hedging on Thursday morning and listed 4 trade ideas in the morning post to hedge ourselves against the possibility of just such a drop so don't say you haven't been warned. Whether there will be follow-through on Monday or a full reversal remains to be seen and, even if I knew, I wouldn't tell you here because this is a review – predictions are another article entirely.
We treaded very cautiously into last year because our PSW Holiday Retail Survey was not looking very pretty so it was no surprise to us, on Dec 26th, when we got some horrific retail reports. These are, of course, the same reports that we "beat" this year – but not by much. Dec 29th was Monday and Israeli jets attacked Hamas targets in the Gaza sending oil flying up to $48 a barrel. That gave us a nice commodity rally into the close of the year but January 2nd was a Friday and we decided (fortunately) to take the money and run on our long plays, holding open our main cover of SKF Jan $120s at $4.35, which hit $80 later in the month (up 1,732%) and USO Feb $32 puts at $3.40, which hit $10.50 in the Feb dip (up 208%) so, on the whole, not too differently positioned than we are now, coming into the new year. Visually 2009 looked a little like this:
January – Waiting for Obama, or Something, to Change
We began January much the same way we ended December with my Wed Jan…
Does vitamin D have anything to do with investing and stock and options trading? Maybe. Preliminary research suggests that lack of vitamin D is associated with impaired mental abilities. And this may indicate that obtaining sufficient levels of vitamin D may improve cognitive performance.
Researchers stopped short of advising more sunshine, or fruit-flavored gummy D supplements (yum!), to improve one’s cognitive function. But further research is warranted.
In addition, and perhaps most importantly, many children appear to be deficient in vitamin D (see below) so it may be worth investing in some of those gummy Ds.
The push to prevent skin cancer may have come with unintended consequences—impaired brain function because of a deficiency of vitamin D…
“We know there are receptors for vitamin D throughout the central nervous system and in the hippocampus,” said Robert J. Przybelski,… “We also know vitamin D activates and deactivates enzymes in the brain and the cerebrospinal fluid that are involved in neurotransmitter synthesis and nerve growth.” In addition, animal and laboratory studies suggest vitamin D protects neurons and reduces inflammation.
Two new European studies looking at vitamin D and cognitive function have taken us one step further…
The scientists found that the lower the subjects’ vitamin D levels, the more negatively impacted was their performance on a battery of mental tests…
A second study, led by scientists at the University of Manchester in England… looked at vitamin D levels and cognitive performance in more than 3,100 men aged 40 to 79 in eight different countries across Europe. The data show that those people with lower vitamin D levels exhibited slower information-processing speed…
Although we now know that low levels of vitamin D are associated with cognitive impairment, we do not know if high or optimum levels will lessen cognitive losses. It is also unclear if giving vitamin D to those who lack it will help them regain some of these high-level functions…
I recently posted on the topics of psychological energy and life success and how we can overcome procrastination to become more productive. What is the difference between someone who persists through adversity and someone who gives up? Someone who makes that one extra trade to recover losses and someone who does not? Someone who stays alert and focused on opportunity and someone who overtrades in unfocused moments?
As Jim Loehr has pointed out, many times the difference is one of psychological and physical energy. How many times have we seen a basketball team make an attempt at a comeback, only to run out of gas late in the game and ultimately fall short? The same thing happens in the boxing ring: fatigue makes cowards and weaklings of the best fighters.
Less well appreciate are the effects of mental fatigue. We have free will only to the degree that we can direct ourselves in goal-oriented ways. When we are burned out, overwhelmed, or just plain tired, we lose that capacity for direction. We drift, rather than act with intent. Even our minds drift, rather than stay focused on goals.
Gunmen have stormed American University of Afghanistan in Kabul on Wednesday night as witnesses said they heard gunfire and explosions ringing out. According to media reports, the attackers have infiltrated the educational institution. Teachers and hundreds of students are said to be sheltering inside the building.
American Univ. in Kabul is reportedly under attack -American teachers & hundreds of students are sheltering inside https://t.co/QJPc6jZzDt
I’m making my way through the Sanford C. Bernstein research piece that everyone is talking about today, in which the sell-side brokerage compares passive investing to a combination of Nihilism and Marxism. To be clear, the author does not make the case that passive is bad or active is better – he’s just saying that there are policy considerations that should be thought about before regulators and government officials proclaim the shift to low-cost passive as universally beneficial for society.
So far, it’s very thought-provoking. I’m not sure how much of it I agree or disagree with yet, I like to stew on these things a bit before reacting.
By The Foundation for Economic Education. Originally published at ValueWalk.
Russian Smugglers Renovate Road Neglected By The Government
Who will build the roads if not the government? As it turns out, even criminals will, if they need to.
The public- and profit-minded entrepreneurs of the black market in Belarussia have taken it upon themselves to improve business by upgrading their transportation routes. Smugglers adopted a gravel road from Minsk to Moscow, raised the road, widened it, and added more turning points to increase access for their heavy goods trucks (fruit weighs a lot). The secret project was quickly rewarded with heightened traffic and an eventual government takeover, complete with customs....
This morning's release of the July Existing-Home Sales decreased from the previous month to a seasonally adjusted annual rate of 5.39 million units from 5.57 million in June. The Investing.com consensus was for 5.51 million. The latest number represents a 3.2% decrease from the previous month and a 1.6% decrease year-over-year.
Here is an excerpt from today's report from the National Association of Realtors.
Lawrence Yun, NAR chief economist, says existing sales fell off track in July after steadily climbing the last four months. "Severely restrained inventory and the tightening grip it's putting on affordability i...
With Folgers and Dunkin Donuts packaged coffee in its brand portfolio, the J.M. Smucker Company is both the biggest coffee roaster in the U.S. and one of the companies that is best-positioned to reap the profits from America’s caffeine addiction.
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
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Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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