AXR ==> The Independence Day Winner!

[Runner]

Very nicely said Ski!!

[rivercitydan]

Keeping Those Stops

I have never been a fan of holding losers. Big losers wipe out multiple small gains on winning positions. I follow stops religously, no matter what, if I love a stock, which I try to avoid, I will put the stock solds on a stop-gain watch list to purchase on the day it exceeds my previous stop-loss price. (computers make this possible) Oh, it rarely does. Or if it does it can be a year or two, a long time. When you have stocks that lose 50% to 90% you will rarely recover. Those % losses are devastating. As an example I once owned the homebuilders for at least two years when interest rates were at their lowest, but exited when several of the stocks in the group were breaking their support and moving averages. I still watch tol, kbh,ryl,etc. and am thankful that I followed those stops.
This is my business and it was inevitable that the builders were going to be hit when interest rates went up as much as they have. I have seen this happen at least 5 times in my career.I have been on the dark side since May 11. Yes, those stocks are cheap,cheap,cheap, but they can become cheaper and they will. The turnaround time can be a couple of years or longer, too long for me to wait. I do watch those stocks every day. We can only follow the market and at this time, it points dramatically down. Every day I look at those cheap stocks that I want to buy when the bleeding is over.

Ernie is a smart fellow and a great stock picker. I think he would be good at picking horses, sports games, and las vegas gambling. Ernie is a rare person in that he follows his philosophy and beats the market. Ernie's stock analysis is great and funny which I enjoy the most. That is not to say his performance cannot be improved.

Oh, and I never enter the market with new longs when the market is decidedly negative. Remember the market in the short term can be inbelievably irrational, but in the long term the market is based upon value.This downturn looks relentless, this could be a rampaging, bloody bear.


R/C/D

[skiracer]

Very nicely said Ski!!

Well thank you Runner. These young kids nowadays.

[casinoboy3]

Well thank you Runner. These young kids nowadays.

I completely agree with you.... I hope it doesn't sound like I am blaming anyone. I "blame" absolutely no one but myself for buying and selling the stocks I have in the past couple of years. I am not blindly following anyone here including MM. I have bought and sold plenty of my own picks, some good some bad. Even if I am losing money I am learning quite a bit.

Yes, it's stupid to follow anyones lead without DD and I know that. I don't do that. I do pay attention to MM's picks because of his track record. I'm not critizing his technique, I don't care what he does with his money nor do I "worry" about it. I was just throwing my thoughts out there about stops and the portfolio, just like everyone else on this board does.

That being said, I admit I don't have enough experience to know exactly what to do with my investments. I try to learn as much as I can going along. There are so many options out there as to investments but my problem is that I simply don't have enough money to be in and out of stocks every week, or sell when the market is bad, or put my money into this and take it out of that, and buy a few shares here, etc. Those transaction costs even at $10 a trade add up quickly and I hesitate buying and selling too often. I don't want to be a day trader I don't have time for that, nor do I think it would be profitable. I don't want buy something like SPY either, I wouldn't be content with market returns (maybe I should be). I'd rather buy and hold a stock. I like reading the reports, news, and following the action.. and I don't like stops. But at the same time that obviously presents a problem when they lose 50%+ of their value.

I'm not desperate and am certainly not at the end of my rope. Does anyone recommend any good books or anything I can look into that might help in my situation? I do want to learn as much as possible and I like investing. I'm just more frusterated by that fact that I don't know exactly what I'm doing then the fact that I've been losing some money. Even though this market sucks I guess I will still hold, I don't know if thats the smart thing to do or not but we'll find out. Anyway, thanks.

[Runner]

Casinoboy, it is probably a good thing your losing money. I know this sounds twisted but here is my logic. If you just began to invest/trade and you made a bunch of cash you might think your bullet proof. This could then lead into some huge problems. I suggest you figure out a system that works for you and STICK with it. Don’t worry about making cash right now that will come with time. Just try to follow a plan. Nothing is wrong with trading fewer shares in the beginning. This way your hits won’t be as bad. I think many make huge mistakes in the beginning by trading way too much money on any one position.

Trust me the market is not going anywhere and current conditions suck. I’ve not read many trading books and I will share one book I think is awesome “Trade your way to financial freedom”, by Van K. Tharp. http://www.amazon.com/gp/product/007...DGZ82&n=283155

This one book opened my eyes on some crazy stunts I was pulling. Pay close attention to the position sizing chaper…

[Runner]

Oh one last thing. For a short term trader one needs a low commission broker. You might look into Interactive brokers. I’m not sure what the min. is to open account, but 100 shares round trip is 2.00. If you don’t trade much you might be fine with 10.00 round trip. I also think IB has a monthly fee of data access. I personally think IB blows the doors off Scotrade.. JMO

[Lyehopper]

Being involved in this forum can make you a better trader.

That being said, I admit I don't have enough experience to know exactly what to do with my investments. I try to learn as much as I can going along. There are so many options out there as to investments but my problem is that I simply don't have enough money to be in and out of stocks every week, or sell when the market is bad, or put my money into this and take it out of that, and buy a few shares here, etc.

Hey Casinoboy.... In the POTW contest this week?.... Did you know that a 15 year old boy with NO MONEY is ahead of 75% of the field by short selling a stock that he asked about here on this very forum (the members here told him not to buy the stock.... so he shorted it.lol).... He has NO experience AT ALL.... But guess what?.... He's involved in the forum, he posts and asks questions frequently.... He has a sharp mind AND HE'S LEARNING FAST!.... 15 years OLD!!!! I LOVE IT!.... Why aren't you playing the POTW on a weekly basis and posting on the threads here dude? He wondered about interest rates and yeild curves and so he walks to a bank near his home and asked the freakin' manager to explain (right after he called another bank and they thought he was crazy.LOL).... I'll bet you that this boy will be worth a few $Million by the time he's 30.... What's the difference in him and 95% of the folks who lose their a$$ in the stock market? He has a thirst for knowledge and experience.... He is a true student of the market!.... Give-em-HELL Stickey!

[lemonjello]

Hi MM

Read my post again. I'm aware of the accounting standard. I am using the COMPANY'S OWN MARGIN NUMBER stated in the financial documents. Do you think they are faking up their margin numbers too make them too low? That would be a new one. Maybe the insiders are trying to manipulate the stock down and are going to slurp up the rest of the stock and go private.

Also, MM or anyone have a link to the backtested results of the MM method? I'm curious at this point.

In one of my earlier posts on here I mentioned that the MM record only goes from 2002 and was wondering how it would do in a 2000-type market. Although this type of approach works well in a bullish market, these same stocks tend to get taken out and shot in a bearish market.

Just an eyeball guessimate (not actually running the numbers thru a portfolio scenario) of the return gives about 30-50% per year since 2002 including clunkers which is very good. Is this close?

One thing that concerns me here is that people post these picks to various message boards and novice investors could end up burying their savings into one stock that tanks, not knowing about position sizing and portfolio management or that they may have to carry around a number of clunkers for a lot longer than 4-6 weeks. I see a lot of traffic on the MM picks threads. I know you're a nice guy MM and way too HUGE to want that to happen to people reading your board.

Good luck everyone.

BTW, I was stopped out of AXR earlier thanks to the stop provided by Spike. If it comes back thru again I might pick it up on the way up.

The company filings are showing the land value at "the lower of cost or market" which is the FASB standard. This company records earnings when it sells its land, because the revenue generated by the land sale exceeds the cost of the land that it holds on its books.

The point of my analysis is that the land on the balance sheet is UNDERVALUED and that is why this stock is cheap, in my opinion.

[Lyehopper]

Very cool Lye. Is that last one from Saturday Night Live or the actual movie.

That's a clip from a Seinfeld episode....

BillyJoe.... leave off the "new"....

[mrmarket]

Imagine the gain had he bought them back lower than where he sold them.

That's brilliant Dave. If I knew it was going to rain, I would have brought my umbrella to work.

[mrmarket]

I think that what you are saying makes plenty of sense. What I don't think you have realized yet is that you have to determine your own discipline and strategys. Following MM has proven to be great for most everyone here over the course of 3/4 years. There is nothing that says you have to do exactly as he does, buy what he does when he does, or hold through the times that he does. Your problem, if you want to call it a problem, is that when you are following MM's lead or anyone's lead and they go on a bad streak you can't say anything bad about their strategy because you followed it. Ernie never talked you or anyone else into buying on his lead. You followed what you thought was going to be a winner. You have to start studying the entire breadth of the markets. You should know about all of the different vehicles to trade and about both sides of analysis. Technical and fundamental analysis an how they can work together and by themselves. Until you do that and understand that in all of this you cannot blame anyone else for losing your money or the shape you are in because you followed their lead. You had better start studying and learning everything you can about all of this and learn to do it for yourself first before you follow anyone else. And don't be worrying about Ernie's portfolio. It's none of yours or mine or anyone else's business except for maybe Mrs. Ernie. Let Ernie worry about those losers he's holding the the money lost. You sound like you're at the end of your rope. You haven't experienced anything like what could happen to you in life much less trading. You are sounding like you could be close to giving in instead of analyzing what went wrong and what you could do to make it right. That makes you easy picking for millions of other traders out there in the markets everyday.

Ski...brilliant, cogent and spot on. You are a treasure on this board.

[mrmarket]

Read my post again. I'm aware of the accounting standard. I am using the COMPANY'S OWN MARGIN NUMBER stated in the financial documents. Do you think they are faking up their margin numbers too make them too low? That would be a new one. Maybe the insiders are trying to manipulate the stock down and are going to slurp up the rest of the stock and go private.

Also, MM or anyone have a link to the backtested results of the MM method? I'm curious at this point.

In one of my earlier posts on here I mentioned that the MM record only goes from 2002 and was wondering how it would do in a 2000-type market. Although this type of approach works well in a bullish market, these same stocks tend to get taken out and shot in a bearish market.

Just an eyeball guessimate (not actually running the numbers thru a portfolio scenario) of the return gives about 30-50% per year since 2002 including clunkers which is very good. Is this close?

One thing that concerns me here is that people post these picks to various message boards and novice investors could end up burying their savings into one stock that tanks, not knowing about position sizing and portfolio management or that they may have to carry around a number of clunkers for a lot longer than 4-6 weeks. I see a lot of traffic on the MM picks threads. I know you're a nice guy MM and way too HUGE to want that to happen to people reading your board.

Good luck everyone.

BTW, I was stopped out of AXR earlier thanks to the stop provided by Spike. If it comes back thru again I might pick it up on the way up.

Margins on the land sales can be cosmetically adjusted simply by selling the properties with the most expensive book values first. That makes good sense from a tax savings perspective although it would limit the earnings.

The only way to know what their land is really worth is to go to the town hall and get the records for who owns what. Then use some sort of real estate mechanism to assess the retail value.

Remember, this city is taking off like crazy. There is zero evidence that would indicate that any growth slowing is occuring. This WILL increase the value of their land holdings. Slam dunk.

[lemonjello]

I thought Wharton was a quant school...

Do you seriously believe that they are manipulating earnings down for tax purposes!?! Can you name three serious exchange listed public companies that have manipulated earnings down for tax purposes? LOL.

There is also ZERO evidence that growth is NOT slowing. Are you kidding? Real estate values are tanking all over the Southwestern US. Coming soon to a city near you.

Do you have any idea what your picks have returned per annum in a portfolio? You should know if anyone does. Just give us a ballpark. Inquiring minds want to know!!!

Margins on the land sales can be cosmetically adjusted simply by selling the properties with the most expensive book values first. That makes good sense from a tax savings perspective although it would limit the earnings.

The only way to know what their land is really worth is to go to the town hall and get the records for who owns what. Then use some sort of real estate mechanism to assess the retail value.

Remember, this city is taking off like crazy. There is zero evidence that would indicate that any growth slowing is occuring. This WILL increase the value of their land holdings. Slam dunk.

[mrmarket]

Do you seriously believe that they are manipulating earnings down for tax purposes!?! Can you name three serious exchange listed public companies that have manipulated earnings down for tax purposes? LOL.

There is also ZERO evidence that growth is NOT slowing. Are you kidding? Real estate values are tanking all over the Southwestern US. Coming soon to a city near you.

Do you have any idea what your picks have returned per annum in a portfolio? You should know if anyone does. Just give us a ballpark. Inquiring minds want to know!!!

Manipulation isn't the correct word. Think of it this way. They are sitting on land that they have sat on for a number of years. They can book whatever earnings they want by selling whatever piece of property they want. There is no more magic to it than that.

I think the demographic data I cited in my write up was very accurate and very current. Rio Rancho is a GROWING city...period.

Of course I know what my stock returns are....and I am quite happy with them.

[DSteckler]

That's brilliant Dave. If I knew it was going to rain, I would have brought my umbrella to work.

https://www.weatherchannel.com