My Positions and Plans

Currently I am 66.5% invested. This ignores the 401(k), it perpetually sits in 4 stock fund baskets.. acting as a control to my active management.

Current positions:

APPL -4.88%
ALGN +3.35%
C +0.5%
CMCSA +10.11%
DVA -0.2%
ETN +6.44%
FIVE +0.8%
GLD(short) +0.8%
ITW +3.5%
KORS -3.4%
MDSO -3.9%
MTG -2.3%
OAS -2%
PGTI 0%
SAM -2.8%
VRX +6.6%
WDR +1.3%
XLF +4.4%
ACT +5.9%
EVR +8.3%
F -1.7%
FB +16.3%
MSFT -2.9%
PCLN +0.4%
REGN -4.2%
TCAP -2.2%
TIS +2.2%
WETF +2.77%
SPY +1.9%
TRLA -6.44%

Some positions I have tight stops, others have wide stops. A few positions I actually plan to average down if it corrects; in 2013 my big mistakes were selling winners too soon and/or getting shaken out… I want to get back to putting more emphasis on good companies with strong metrics and less, however important it may be, on technical analysis timing. I want to use technical to try to time my entries and cut my losses on more ‘higher risk’ names but not getting shaken out by them so much. For example, I want to do more of buying on a technical breakout, but instead of selling if it fails, either hold or buy more so long as it says within the last ‘Darvis box’ consolidation pattern. KORS is a good example as of this writing. I plan to hold my current position, even if it corrects to $71, which is a 10% drop. I’ll likely buy more there so long as it looks to form a bottom. KORS is a great company, so long as the story holds, I don’t want to get shaken out on the stock on a few month correction. A stock like FIVE… I do not wish to do this; I have a more trend following stop in place.

Market hasn’t corrected for a long time, everyone knows this. I anticipate it will in Feb during/after earnings season. At a 5% dip I plan to deploy half my remaining cash. At 10% I plan to deploy the rest. If it happens to dip 15% or more I plan on using fixed income funds to add more. If the correction continues not to happen, I will continue to have too much cash likely, and not best the averages again this year :)

Idea

Literally was thinking about this in the shower, so it has to be good.

Thinking back this year (will do data analysis next week), most of the trades where I lost money or left money on the table were NOT due to what stocks I picked. I’m guessing the vast majority of buys I did… if I held them for the rest of the year… are up, and up more than when I sold them.

My problems this year were being shaken out, either by an IBD market correction call, worried about congress, 8% loss rule, etc. Those, losses come bigger and faster in small cap stocks… obviously small caps are going to be more volatile than, say, KO.

So, maybe… a good idea for me to start to think about would be:

For small cap stocks (anything under 2-5bil cap), I buy a 1/3 position on a breakout like normal. However, if I’m going to be in a potentially volatile name, I must have a stop in place that assumes it might go down a good deal. So, I may add a 2/3 position if the stock does drop to that level. Say I look for stocks that are in a cup w/ handle breakout. I look at the cup, and its 25% lower than where I’m buying my initial 1/3. So I think/hope it will rise from my buy, good. But if it corrects, I hold on until it drops to the low in the cup. There I buy a 2/3 position. From this point, I have a pretty tight stop: if it invalidates this current trading range lower I want to cut my losses there.

So.. maybe I buy xyz for $3000, I lose $1000 on a dip to the low of the previous consolidation range. I buy $6000 more there. I may lose another $500 or so if it keeps going down, cut losses. But if it goes back to the original purchase, I do well.

Think this would allow me to stay in more volatile names, with not a huge risk of capital. The ‘worst’ case is I only get a 1/3 position on.

Thoughts?

REGN Trade 11/15/13

REGN is a great growth biotech.  It currently looks like its trading in a range, 270-310, with an ATM of 320.

My trade plan

Buy today @ 279.81.  Initial stop is 268.8.  This looks like the low end of the trading range, where a lot of support is from May-Nov.  This stop doesn’t give me much room, a decent change I can be shaken out.  I’m ok with that; I’m looking for 310-320… 10pts of downside to 30-40pts of upside.

I’m risking 1/2 R, where 1R = 0.3% of my total portfolio… so I’m risking 1/2 of what I normally want to risk in a trade.

Why I want to be in the stock

FB has +58%, +108% EPS growth the last two quarters.  +53%, +60% Sales growth.  ROE is 16%.  This is from a large cap company.  Looking at the chart, it appears to have stopped dropping, and its holding the 50day line.  The 52-week high (Oct) is 10% up from today’s levels.  I think it can get back there.

My Trade

Buying today $49.30.  I hope to see $54.80+.  My stop is $44.80, which is a bit over 2 x ATR, and looks to me from the chart to have good resistance there.

I’m risking 1R, which is currently defined as 0.3% of my total portfolio size.

XLF Trade 11/14/13

Going long XLF

I played with the idea of going on BAC or EVR instead of the index.  I didn’t go long BAC because 1) there is no dividend 2) it could be trading in a range and its at the top of the range vs. breaking out.   EVR I like a lot but as of this moment I have less gamble in me.  I hope to get long EVR (or KKR) in the near future.

 

My plan

Buying today @ 20.98.  My initial stop is 19.70.  I get that number from drawing a trend line since march using the lows of the chart as my line.  I could have made a stop at 19.50 of the October lows, but I like the trend line stop better.

So I’m risking 1.30, which will be 1R which is defined currently as 0.3% of my portfolio.  I will move my stop up as the trade works in my favor as a function of 3x ATR.

SAM – Sam Adams Beer

Great beer, great growth, great stock.  I want to be a long term holder of this company, here is how I’m trying to get back into the name.

Buy today $241.15.  My initial stop is $225, looking at the chart $230 has solid support.

So I’m risking $16/share.  My risk is 1R, where 1R = 0.3% of my trading portfolio.

If the trade moves in my favor, I will move my stop up, keeping it roughly a 3x ATR stop.

If it gets well beyond $250/share $250 will be a good stop, looks like support will be there.

I’m buying now because it seems to be holding the 50day line pretty well, and I want to get into this name long term.  If it hits my stop and I sell, I’ll look at $210 or even $180 as the next place to try again.

OAS Trade 11/13/13

OAS Oasis Petroleum

Reasons I like this stock

1.  I’m biased to the opinion that oil is a resource that will continue to be in demand for decades to come.  The energy ‘revolution’ in the US is real, and good for the country.

2.  OAS is in North Dakota, the ‘cool’ spot to be in.  Its EPS and sales growth are OUTSTANDING.

3.  Technically, OAS is respecting the 50day line, and has formed a double bottom of it in the last week.

My Trade

Enter the trade today at $50.39.

My risk is 1R, which is defined currently as 0.3% of my trading portfolio.

My initial stop is $47.85, which is a bit below last weeks price of $48.40.  This is a relatively tight stop.  My reasoning is I’m more ‘calling a bottom’ here.  If I’m wrong, I want to exit the trade fast.  I good scenario for me would be I’m wrong, the stock drops to the 200day line of ~ $40, which looks like good support, and I would re-enter the trade at that level.   On the positive side I’m looking for at least a return to $57.33, where it was a month ago.  ATR is 2.29… I know there is a good chance I will be stopped out here.  I don’t plan on moving my stop up very much in the near term; if I get gains I want to use them to widen my stop, I want to be in this space for years to come.  Right now my stop is ATR x 1, if it goes to $57 quickly my stop will probably be break ATR x 2.

 

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