My Mind Switched Side But so Did the Market, Stock Traders Blog

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I hold an MBA degree, master of business administration with concentration in finance. However I lost 70% of my investment value about $70,000 over the course of 11 years. I dare not to put up my picture on the blog for fear I am going to be tag as the biggest loser. Nevertheless I learned from the pass and changed my investment strategy. I changed my whole mindset of investment and started over with what I have left...

My Mind Switched Side But so Did the Market

Posted on 22 June 2009 by BloggingTrader Tags: Stock Trading Diary, Stock Trading Lesson Learned

From the past few weeks of trading I had concluded in a previous post that live was much better on the long side. So I reminded myself from time to time to avoid taking the short side. I thought about taking the short side in pre-market this morning when I noticed future was down so much but I was hold account balance 20090622 back because of past experience. In retrospect if I went short at pre-market and went long in after-market then what a great day it was going to be.

Anyway I bought Bank of America and I bought 2,000 shares at average $12.50. I not only bought Bank of America but also added more Patriot Coal (PCX) also at $6.12. My average on PCX is now $6.90. I am buying the dip. In fact I am all in already and on a small margin. I changed from the short mind to a long mind and the market changed from bullish to bearish. The result was of course I lose big. At today’s close I lost almost $2,500 today. My account balance stood at $27,107.79 which was 10% down from my initial capital.

I bought Bank of America because I was betting there would be a run up after the prefer to common share conversion. I am surprised to see someone post my link about the conversion on yahoo message board

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_B/threadview?m=tm&bn=1903&tid=1042741&mid=1042741&tof=11&frt=2.

I still think my entry point at $12.50 can make me some money in a couple of days because I believe the conversion price will be above $12.50. But I feel a bit shaky after seeing the market tanked like this today.

I am not sure if I should put today’s trading in the lesson learned category but I put it there any way. I don’t know what kind of lesson I have learned today. Probably I act too early again in the trading day. At least I put it there so that it would remind me what I was thinking when I losing big on my trades.

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Comment by Leon at 2009-06-22 22:04:09

My suggestion is not to go on margin. You said in your post that you are on a small margin. Give the total capital of $30K, your margin is around 8K, that’s more than 25% of your total account worth. In a bear market margin can kill you in matter of days.

I hope you good luck, and I am coming back every other day to see your recently posts. I appreciate your sharing your trading activities as well as your thoughts.

Comment by Stock Traders Blog at 2009-06-22 23:31:34

I found I start getting lose again. It is just very hard to follow my guidelines and I start get used to big swing like this. I use to short 3000 shares of WFC at average $24.76. That was over 50% margin at the time. The thing I am worrying is that I lose my sense on risk. Thanks for reminding.

Comment by Nikki at 2009-06-22 22:04:49

Just found your blog through yahoo message board. I used to write a blog as well, honestly and truthfully about my thoughts on investing, whether it was win or lose and even my emotions on it as it perspired throughout the days.

It’s a tough market and sometimes, if I felt that I got too emotional about my decisions to buy and sell, I’d just leave it alone a few days, but make reasonable mental limits, both on the upside and downside. Watching the start of the day (usually 30 minutes) mostly tells what kind of day the rest of the day would turn out to be. I bought BAC at an avg of 13.06 about 2000 shares as well, but then sold it off when I saw weakness this morning at 12.95 for a small loss. Some stocks take several days to finish on the downside. What I did today was buy again at the end of day, 2200 shares @ $12.05(due to the having a lower cost entry), but will look again tomorrow to see if it’s a good day to sell again if the morning is weak. It looks like there’s a big possibility that it’s going down again because of the worldwide consensus that the market is going down. If commodities, esp oil, gold, silver these days goes down, the market usually follows.

Comment by Stock Traders Blog at 2009-06-22 23:32:22

What happen to your blog. I would love to read it. Thanks!

Comment by Nikki at 2009-06-23 00:23:30

I meant to write “transpired” instead of “perspired”. Anyway, my blog, which I haven’t updated in several months is still kicking around: http://baggerlife.blogspot.com/

I’ve been busy trading, but I haven’t been updating the blog, which I should be. Since the market has been going up since March, the returns have been really good for the long position buyer, until recently. I was once down 20K starting near the end of 2008 holding long into several “resistant” stocks, but ended up positive 10 Grand now using my gut feel to trade. I fear the market might continue it’s weakness again due to rising unemployment problems and credit defaults. The CDS rates are rising again, which is bad news for the banks. It could take another dip so I’m cautious on the long side. Overall, I’m long BAC and the the other large financials (except C).

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Comment by Pointer Men's Basketball at 2010-10-29 20:45:49

You you could edit the page name title My Mind Switched Side But so Did the Market, Stock Traders Blog to something more better for your subject you write. I liked the the writing still.