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"Sir Tony8898's Corner "

kithe · 1110 · 186707

kithe

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This thread is created for Sir Tony's posts (of course with his permission) and coming from a person with a lot of experience, (because we met him already)  :cool2:
I know most of us will learn a lot from him especially about stocks.. thanks in advance Sir Tony. God bless you.  :thankyou:


singkit_1588

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This thread is created for Sir Tony's posts (of course with his permission) and coming from a person with a lot of experience, (because we met him already)  :cool2:
I know most of us will learn a lot from him especially about stocks.. thanks in advance Sir Tony. God bless you.  :thankyou:
you met him in person?
cool..
i'm looking forward for sir tony8898's insights for this coming week..
more power sir tony.. :)


kiriyama

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You met him?! Lucky you! sana ako din kahit minsan makita ko sya...or mag pa seminar sya for free! nyahahahaha

IDOL tlga 2 si sir tony8898!


Tony8898

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It was a pleasure meeting you Kithe, and the rest ( Boznizn, Nelson, etc.) in Powerplant Mall last May 25. I now realize I have this corner but don't know what to write. Somehow, its much easier to blog when you just write off what comes to mind... without pressure. Now that this corner is exclusive to my own blogs ( what does that mean?..lol ) I don't know what to write.. Oh well, perhaps let me start with this one article I read last February 2013
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Letting Your Winners Run: The Disciplined Art of “Sitting”
by ROSS HEART on OCTOBER 21, 2012

By Ross Heart
“Let your winners run.” Guessing you have heard that one a few times. Easy in thought and words, but perhaps the hardest investment axiom to follow – in my experience, even more challenging than “sell your losers.”

In my last post, Understanding When Cash Is King, I referenced legendary trader Jesse Livermore’s quote: “It never was my thinking that made the big money for me. It always was my sitting.” via the must-read Reminiscences of a Stock Operator. In that post, I discussed the value of Livermore’s “sitting” as it pertained to cash balances, whereas here I transition his advice to taking and holding individual investment positions.

As I look back at my own results, I’ve recognized trends consistent with Livermore’s quote. It’s quite possible to profitably and frequently trade in and out of positions and pocket gains, but the winners that leap off the page seem to always be the ones that required sitting.

For instance, over a 15-month period I logged 14 different short positions in Green Mountain Coffee Roasters (GMCR), all of which were exited profitably. If I had followed Livermore’s advice though, the first short position I took on July 29, 2011, at 105.49 would possibly still be on the books, and I’d be counting dollars instead of nickels and dimes given today’s price. Inversely, that escapade reminds me of not confusing genius with a bull market.

These are the investments that positively skew your results – early investors in Microsoft (MSFT) and Intel Corp (INTC) who bought, held & sat through the 1990’s come to mind. More recent investors in companies like Apple (AAPL) and Google (GOOG), John Paulson’s housing short or David Einhorn’s Lehman – these are all positions that drove outsized returns but demanded extraordinary long-term patience.

Following Livermore’s “sitting” advice helps to accomplish another thing – a development of extreme discipline that forces you to try to buy right. The mentality of sitting and waiting demands selectivity, as you want to be as certain as possible that you are “sitting” with the right positions. It may seem counter-intuitive in today’s schizophrenic, high-frequency trading market, but perhaps the best way to thrive is to lower your frequency, and “sit.”

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For those of you who have been following my past blogs, you know that I have been very much discouraging ADhD type of investing. I guess when you are young, by nature, with so much energy, its easy to get caught up and jump from one stock to the next..lol. As if you are on one horse already, realize there could be a faster horse and you switch horses. Very much like switching girlfriends..konting away, ayun, split na tayo! Whaaaa

The problem with that is - how sure are you you got on a better horse? With all the other guys trying to get on the faster horse, could that horse be pregnant with punters by the time you get on top of it?..hmmmm..

So be careful out there. Not all that glitters is gold, same with horses... markets have a certain efficiency that is heard to cheat against.

What i mean is this.. You are 27 years old, and meet this hot chick in a bar who is 26 years old. She has everything, - sexy, pretty, affluent, successfull, good dresser, FHM body, etc. except one thing... For the past 3 years she has no boyfriend!

Smell something? In an efficient market, a girl like that will not exist for long. They will get bidded out fast. In short, in any market - property, stocks, cars, its very hard to find a cheap bargain, because everyone else is looking and willing to play.

Sometimes, the better stock to buy and hold on longer term basis is not that hot stock everybody is talking about.

Going back to the hot chick, - how sure are you she is not lesbian? Or a man hater? Maybe she is clinggy or a whacko...just saying, hehe


vicces

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nice share sir chief tony.. :cool2: if I may ask, how many securities/issues are you holding in your portfolio?

You met him?! Lucky you! sana ako din kahit minsan makita ko sya...or mag pa seminar sya for free! nyahahahaha

IDOL tlga 2 si sir tony8898!
celebrity status na si boss tony... #SirChief :D


Quiz

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ang boss ko Tony pangalan, I despised him so much ( but I don't let him know that), but you sir are an inspiration :idol: , kahit pabasa basa lang sa mga post! keep sharing your experience and knowledge with us, and I'm sure we'll pay it forward one way or another   :thankyou:  :thumbsup2


Quiz

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nice share sir chief tony.. :cool2: if I may ask, how many securities/issues are you holding in your portfolio?
celebrity status na si boss tony... #SirChief :D

Sino naman si #SirCheap??? :hihi:


mokongboy

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Sir Tony, ano po ba gamot sa mga tulad naming may adhd    :hihi:


vicces

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kithe

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You met him?! Lucky you! sana ako din kahit minsan makita ko sya...or mag pa seminar sya for free! nyahahahaha

IDOL tlga 2 si sir tony8898!

Yeah, we are so very lucky..   :yoohoo:

We met him last May 25, Nelson, Bozanian, pocoyo's wife and mokongboy..   :rakenrol:


rhipolito

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Finally! Sir Tony's own Crib! Keep em coming sir!


mikoangelo

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Sir Tony, ano po ba gamot sa mga tulad naming may adhd    :hihi:

Combantrin effective...   :secret:


kiriyama

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Sir Tony, ano po ba gamot sa mga tulad naming may adhd    :hihi:


yeah...ako din may ganitong saket...ahaha...di ko mapigilan...kahit nakaka 3 months nako sa stocks....


eischied_21

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Nabasa ko po Sir Tony mga posts nyo sa kabilang thread and I'm really learning a lot from you. Thank you po. :)


Tony8898

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nice share sir chief tony.. :cool2: if I may ask, how many securities/issues are you holding in your portfolio?
celebrity status na si boss tony... #SirChief :D


^vicces

In 2009 when the index hit 1747, down so much from the 2008 high of 3,800 - I decided that the bus was in Baclaran and ready to go. To diversify a bit, i set out to own 3 to 4 stocks.

MEG was at .55 that time and LPZ was at 1.35/ share. DMCi was around 5 pesos and I should have bought it. My goal was to have at least a million shares of the stock and hold it for 2 years. Its been 5 years and I havn't sold. .. This is because my cost is so low.. (My base or average cost in a stock) that its sayang if i cash out now, when the bus is not yet in Monumento,, maybe in Cubao, but clearly not in monumento yet.

In 2009, i had MEG, LPZ, some Atlas and PX. The mining stocks are so volatile, i have switched away from them when they didnt climb as fast as the others... Eventually, it was easy to sell them. Also, Because if I cant buy a million shares of it, or get good volume, or cant sleep because a mine could close, have a leak, etc. then I cant ride that far with it. Sooner or later I would get shakenout of that position anyways.

Today, after 5 years i only have 3 stocks..MEG, MEGw1 and Lopez holdings.

In the 2005 to 2007 bull run, MeG went from 1 peso to 4.80, and Lopez went from .98 to 5.80!

So its obvious to me.. Buy volume in these stocks and "sit " on them.

Even up to now, if  i make extra money, i still buy MeG and LPZ when I can. The COL article yesterday giving a price target of 9 pesos for MEG is exciting. But it also tells me i should try and trade the upside and hold longer if i can on MeG.

-----------------------
Here is a scenario which perhaps explains why younger kids become ADHD. It may have to do with the fact that their capital is limited.

Scenario A
---------------
Alex is 28 and working in call center. He wants to play the market and in his mind he only has Php100,000 to risk. In his mind his only option to become rich is to make many profitable trades!

1) 1st trade he buys and sells in a month. His 100,000 earns 30k so he now has 130k
2) he then makes another play, his 130k makes 10% and its now 143k
3) he buys a stock on a tip, and his 143K he makes 20% in 2 weeks!

So in the mind of Alex, he is expanding his principal in a compounding way. he will be a millionaire in about 1.5 years.

But here is the thing, just when he is up 50k, the market corrects from 7400 down to 6,500! All his profit is wiped out. He even has a loss now!

------
Maybe the better way to trade was not like that at all. alex was chasing it too much..because he is naive about the market, and because he listens to what average yuppies also tell him. These guys brag about their killings, but nobody brags to him about their losses. alex starts to think the market is that easy..lol..

 I tell you that since 2009, I have been like alex too. I bought Century peak metals on a tip,even bought some PsB after IPO. I also bought some vitarich and CyBr on a tip...lol.my winners just cancelled the losers!!!
 In short, these quickie plays didnt really score much for me. Since i was buying on tips, i also didnt buy alot or get volume, nor sat it out long.. So what can i expect doing that?

You have to get volume once you learn to trade. There is an argument for leverage,, assuming you k ow what you are doing.

---------------
The better scenario?
scenario B

_________________
Say, Im alex.i have 100k. Instead of chasing it too much, i borrow 400k for 1 year, and give postdated checks to my rich friend for it.

So my working capital is now 100k plus 400k = 500K

The market goes down from 7500 to 6,500! MEG is now doing 3.76. So i buy all of it ..yes all 500k on MEG. An article comes out giving a target of 9 pesos on MEg!

Since im on borrowed funds, I am able to buy 140,000 shares of MEG, my cut loss is also steep. I cut loss at 3.55! If something goes wrong, i cut loss at 3.55, thereby preserving my capital and borrowed money.

But in next 6 months MEG climbs up to 6 pesos!

Because im leveraged, its possible that my 100k goes up to 250k in one year.

Sorry for this long story. But here is my point.

Many guys will think doing the first scenario is safer. Because he didnt borrow, because he only risked 100k each time... Not 500K, right?

The second scenario involved taking on debt, and cutting loss more tightly.. With a smaller margin for error.

You know, many newbies will really think the second route is the riskier route! Is it?

Hold off on the risk department, lets talk about profits..How about making a killing? What did you really risk in the second example? But how much can you make if you get it  right?

In the second scenario, you have 500k invested! What if MEG really goes to 9 pesos! How much will you make? A big killing right?

So this my point! Scenario A could be the dead end scenario actually, while scenario B is the smarter way to play,,for me, actually a proven way to make a killing but nevertheless the road less travelled coz it looks scary to the uninitiated or the newbie, especially since im talking volume and gearing, or leveraging..

In scenario B
-you get volume! To make a killing,, you also have to bet more to make more
  So your bet is not 100k but 500k!
- you just have to cut loss quickly and pay interest to the lender
- in this scenario, what if MEG goes up to 9 pesos! You are set, you are made.
- so in scenario B , you are playing poker with the chance to bet all, or go all in with volume if you have a good hand.

And you only need one MeG play every two years to make it big:)

----------
Whats is my point?
When i was new, i thought scenario A was the only way to play the market. I bet small, made small, traded often making my broker rich!  ..and also got losers that cancelled my winners. I was  always back to square one, looking at short term charts...hehe

Scenario B is now HoW I play the market. If i feel strongly that MEG can go to 9 pesos, and I can ride it from 3.76 to 9 pesos, im gonna borrow  from my aunt and load up! Its the only way really...esp. If i have a base in the stock already.

( but how will i get my base if i didnt get volume in 2009 as well, -see my point about volume?)

Yes, scenario B is the road less travelled, but it may be the better way to play the market... In a bull market, scenario B is playing the upside. Its really setting yourself up for that one lucky play.. That 3 or 5 bagger.

Its not frequency of trading, but quality.

The chart of MEG is really bullish, massive formation at 2.80 and now a COL article saying 9 pesos, clearly breaking out of the 4.80 high! If i think this is a high return low risk play, the stars are aligned, etc. well scenario B is the only way to play this..not frequency, but volume :)







 


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