Stock Blog

Yesterday I began outlining some of the principles Jesse Livermore used so successfully to make $1million during the Panic of 1907. $1million doesn’t sound like a lot these days, but of course it must have been worth closer to $100million in today’s terms. Please keep in mind that there are probably a thousand other lessons that one can glean from Livermore’s trading career, and many of his mistakes and shortcomings are probably more instructive.

4.      Probe out weak points. As noted... [Read More]

In my last post I suggested that we’re in a bear market and that we would be wise to position ourselves accordingly. To this end I suggested that the account of Jesse Livermore’s experiences during the 1907 Panic could provide us with some useful tips.

At the outset I should say that Livermore’s approach is obviously not for everyone, probably not for very many at all. Nor should we receive his lessons without a dozen caveats attached. I certainly wouldn’t recommend anyone employ his approach... [Read More]

A couple of market commentators (eg. Chris Mayer) have drawn parallels between today’s credit crunch and the Panic of 1907. There are certainly a number of similarities: in 1907 speculation was rampant and credit expansion out of control. New, highly leveraged investment vehicles (the Trusts) embraced the easy money conditions and employed little in the way of risk control. At first they profited greatly. But, as always, market conditions changed, money became tight, and the credit bubble burst.... [Read More]

Another shorting opportunity. ATI looks like it will test resistance at 85. If/when it fails, look to short with a downside target of around $30. Targets are dodgy to say the least. So look to take profits following sharp sell-offs. Or better yet, trail your stop and hold for as long as possible. Then look to take profits when you believe the market is set for a rally, but not until late in the year.

not sure how to designate a short on my watchlist. Anyhoo, AIG has formed a massive 9-year top. there's plenty of overhead supply if the price continues rising. suggest a limit entry at 46.99 with a downside target of around 10. suggest taking profits following very sharp falls however. Stop should be set no closer than 52.31

Well, I don't know. Markets around the world are plunging. BSC goes bankrupt. The Fed is desperately trying to slap a band aid on the problem. And yet the S&P rallies! Looks like I'll have to wait a bit longer for my shorts to come good.

I'm following a fascinating debate on deflation vs inflation between Mish (http://globaleconomicanalysis.blogspot.com/2008/03/now-presenting-deflation.html) and Blumen among others. Either way the Fed has a huge problem on its hands. Will be very interesting to... [Read More]

Well it's 11:43 Sydney time and the All Ords is down 130 points! What's more, the Yen is trading at 97 (yes, a dollar bounce is probably coming but I'm enjoying it while it lasts) and gold is $1020! This bodes ill for those carry traders and US bulls. Will be very interesting to see what happens on the US markets when they open in a few hours.

My US shorts, believe it or not, have been languishing since January. My timing was dreadful, and I've been stopped out for steep losses on TS, BCO, and... [Read More]

The Delusion Continues