Longterm Investing
A place to put my posts
正文
Below are some highlights of 2008:
1. Got out of Chinese stock market near the peak, the only regret is not shorting any related Chinese stocks. "Market can stay irrational longer than you can remain solvent", I am scared of shorting, long is much easier psychologically, I can hold long postions for years if I have to.
2. Almost completely out of energy near the peak around June when crude price was around 130 - 140. Got back into high dividend oil gas stocks in recent weeks when I noticed that street gas price stopped falling. Now crude price is around $40 per barrel. Current oil gas holding: ent, pvx, apl, ahd, epd
3. Falled into love with bond insurers: abk and mbi,ago and rdn. In the darkest days of July, ABK, MBI's CEOS are buying their company's shares every couple of days. Insider buys are across the board: CEO, CFO, Board memebers, you name it. Eventually abk was up 10 times from 1 to 10, and mbi was up 5 times from 3.7 to 19. Throughout this process, I was trading these two stocks like crazy, huge and huge realized and unrealized profit are mounting up. These 2 company crashed back down to earth again after their bad Q3 earning report, abk broke its historic low of 1, while mbi revisited its historic low and hold. My huge profit was gone, but I still ended up with big profit just not huge. I accumulated big position of mbi one more time just days ago after seeing MBI's new insider transactions.
4. The climax of 2008 happened on the day when Wachovia was announced to be bought by Citi (it was later sold to Wells Fargo). With my recent success on ABK and MBI, I was actively searching big insiders' buys in the grave yard of financial. I set my sight on Wachovia, its CEO Steel Robert King and a board memeber Goodwin William H, each bought a million shares at a price above 10. There are other insider buys also. From these transactions, I am sure there are no fatal internal financial problems. As financial panic intensifies, bank run started quietly on WB, I was very sure WB is "too big to fail" especially right after the failure of WM, I was mentally ready to jump in. I happened to be up that day at 3am, I was crazy during those days. I soon noticed the abnormal pre market trading on WB. I started to buy wb at 2.66, minutes later, tripled my position at 1.51. My blood started boiling when I saw the price broke 1. I bought 10 times more at 0.66 per share. I started to pray. WB was under 1 for about only 15 minutes, then the trading was halt. I was tired, I was half awake, half asleep, waiting for my fate, for the market to open. Finally the news broke, WB was sold to Citi, after a frenzy moment of trying to comprehend the deal in the news, I gave up, I looked at quote of wb, I smiled, I sold all my shares at 2.38 seconds later. I could not hold the pressure anymore. I gave in. I later bought small positions of wb at higher prices at 3.8 and sold them at 5.15. I have been wondering what if I sold all my shares at 5.15, hmmm, greedy people.
5. On going tragedy of FMD. I started to buy FMD around mid 30 (split adjusted) on 2006. I made money. At the end of 2007, financial crisis started to unfold, no one is buying student loan backed bonds any more, because FMD does not hold bonds on its balance sheet, so there will be no danger of insolvency. All you need to do is to wait for bond market to unfrozen. Sounds simple, right? I started to average down/trading on this loser, hundred shares in 20 - 30 range, thousand shares in 10 - 20 range, 10 thousand shares under 5. FMD closed 2008 at 1.29. I think the biggest mistake on FMD is my refusal to admit defeat, I should just sit tight and wait for spring to come back, I should not fight the tide, especially when you can't find any insiders fighting together with you using their cash. There are only 3 insiders buy at the end of 2008 near 1. It would be great if I hold onto my buying power until I see these insider transactions. I am not admitting defeat just yet, especially considering recent insider buys, 2.23 per share cash, and the original investment thesis. I can hold this puppy for years if I have to.
6. In 2008, I experienced margin calls first time in my life, margin calls are bad, but now that you have experienced the worst, you are no longer as fearful as before. Margin calls actually helped me to locked in my profit. I was forced out of mbi continuously at level like 10, 9, 8 ,7. Because of my low cost, some of these transactions are actually profitable. The other reason is abk, mbi's abnormal high margin requirement. Because of this, margin calls turned into some kind of stop loss for me. Any way, I was able to reload all my mbi positions at 4 just days ago, how wonderful.
7. Eliminated my margin position at the peak of my account value, I think this is a critical step to ensure I am up in 2008. Learn to take profit, constant learning.
Dramatic events of 2008 verified for me a lot of investment axioms like "be greedy when others are fearful". Holding huge positions through dramatic up and downs is quite an experience, my stomach is getting much stronger, I can feel the difference at the end of 2008 when I was reloading positions in finance and energy. I wasted far less time than before hesistating. I was able to get a lot of positions at market's bottom. I was much more effective on chasing flying stocks. 2008 did not kill me, it made me stronger. It sets me free. The fact I am up in 2008 brought me a lot of much needed confidence.
For 2009, I will be cautious, but I will not be fearful. I will be eying for big fish, I will not hesitate to capture small victories, if only just to make myself happy. My mind will be more open, sharp when I am happy. This is what I learned from years of experience in stock market. I also learned this while watching "Survivorman" on discovery: the will to fight, to survive is number one issue in a survival situation, occupy your mind on things you control, do not let it wander on the boundless fear, build on small success, you will find your way out eventually.
2008 is the worst year so far after great depression, I hope people can free themselves from the horror of 2008, the worst has past us, right?
1. Got out of Chinese stock market near the peak, the only regret is not shorting any related Chinese stocks. "Market can stay irrational longer than you can remain solvent", I am scared of shorting, long is much easier psychologically, I can hold long postions for years if I have to.
2. Almost completely out of energy near the peak around June when crude price was around 130 - 140. Got back into high dividend oil gas stocks in recent weeks when I noticed that street gas price stopped falling. Now crude price is around $40 per barrel. Current oil gas holding: ent, pvx, apl, ahd, epd
3. Falled into love with bond insurers: abk and mbi,ago and rdn. In the darkest days of July, ABK, MBI's CEOS are buying their company's shares every couple of days. Insider buys are across the board: CEO, CFO, Board memebers, you name it. Eventually abk was up 10 times from 1 to 10, and mbi was up 5 times from 3.7 to 19. Throughout this process, I was trading these two stocks like crazy, huge and huge realized and unrealized profit are mounting up. These 2 company crashed back down to earth again after their bad Q3 earning report, abk broke its historic low of 1, while mbi revisited its historic low and hold. My huge profit was gone, but I still ended up with big profit just not huge. I accumulated big position of mbi one more time just days ago after seeing MBI's new insider transactions.
4. The climax of 2008 happened on the day when Wachovia was announced to be bought by Citi (it was later sold to Wells Fargo). With my recent success on ABK and MBI, I was actively searching big insiders' buys in the grave yard of financial. I set my sight on Wachovia, its CEO Steel Robert King and a board memeber Goodwin William H, each bought a million shares at a price above 10. There are other insider buys also. From these transactions, I am sure there are no fatal internal financial problems. As financial panic intensifies, bank run started quietly on WB, I was very sure WB is "too big to fail" especially right after the failure of WM, I was mentally ready to jump in. I happened to be up that day at 3am, I was crazy during those days. I soon noticed the abnormal pre market trading on WB. I started to buy wb at 2.66, minutes later, tripled my position at 1.51. My blood started boiling when I saw the price broke 1. I bought 10 times more at 0.66 per share. I started to pray. WB was under 1 for about only 15 minutes, then the trading was halt. I was tired, I was half awake, half asleep, waiting for my fate, for the market to open. Finally the news broke, WB was sold to Citi, after a frenzy moment of trying to comprehend the deal in the news, I gave up, I looked at quote of wb, I smiled, I sold all my shares at 2.38 seconds later. I could not hold the pressure anymore. I gave in. I later bought small positions of wb at higher prices at 3.8 and sold them at 5.15. I have been wondering what if I sold all my shares at 5.15, hmmm, greedy people.
5. On going tragedy of FMD. I started to buy FMD around mid 30 (split adjusted) on 2006. I made money. At the end of 2007, financial crisis started to unfold, no one is buying student loan backed bonds any more, because FMD does not hold bonds on its balance sheet, so there will be no danger of insolvency. All you need to do is to wait for bond market to unfrozen. Sounds simple, right? I started to average down/trading on this loser, hundred shares in 20 - 30 range, thousand shares in 10 - 20 range, 10 thousand shares under 5. FMD closed 2008 at 1.29. I think the biggest mistake on FMD is my refusal to admit defeat, I should just sit tight and wait for spring to come back, I should not fight the tide, especially when you can't find any insiders fighting together with you using their cash. There are only 3 insiders buy at the end of 2008 near 1. It would be great if I hold onto my buying power until I see these insider transactions. I am not admitting defeat just yet, especially considering recent insider buys, 2.23 per share cash, and the original investment thesis. I can hold this puppy for years if I have to.
6. In 2008, I experienced margin calls first time in my life, margin calls are bad, but now that you have experienced the worst, you are no longer as fearful as before. Margin calls actually helped me to locked in my profit. I was forced out of mbi continuously at level like 10, 9, 8 ,7. Because of my low cost, some of these transactions are actually profitable. The other reason is abk, mbi's abnormal high margin requirement. Because of this, margin calls turned into some kind of stop loss for me. Any way, I was able to reload all my mbi positions at 4 just days ago, how wonderful.
7. Eliminated my margin position at the peak of my account value, I think this is a critical step to ensure I am up in 2008. Learn to take profit, constant learning.
Dramatic events of 2008 verified for me a lot of investment axioms like "be greedy when others are fearful". Holding huge positions through dramatic up and downs is quite an experience, my stomach is getting much stronger, I can feel the difference at the end of 2008 when I was reloading positions in finance and energy. I wasted far less time than before hesistating. I was able to get a lot of positions at market's bottom. I was much more effective on chasing flying stocks. 2008 did not kill me, it made me stronger. It sets me free. The fact I am up in 2008 brought me a lot of much needed confidence.
For 2009, I will be cautious, but I will not be fearful. I will be eying for big fish, I will not hesitate to capture small victories, if only just to make myself happy. My mind will be more open, sharp when I am happy. This is what I learned from years of experience in stock market. I also learned this while watching "Survivorman" on discovery: the will to fight, to survive is number one issue in a survival situation, occupy your mind on things you control, do not let it wander on the boundless fear, build on small success, you will find your way out eventually.
2008 is the worst year so far after great depression, I hope people can free themselves from the horror of 2008, the worst has past us, right?
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