Evil Short Monster

[Fidatelo]

Originally Posted by sterlingice

Hm... I set up a trade last night which should have gone down by now since it's after 9am, correct? Instead, it's showing as "pending"

SI

Your trade appears to have gone through from what I can see.

That said, the news events about your fund you bought seem to indicate it was being closed down by March 27th? So is it still active? Or will it's price just remain static?

[sterlingice]

D'oh- looks like it went through. And, yes, that was dumb. I was just trying to get a standard S&P 500 Index fund to use as a benchmark for everyone else. I did a quick google search last night but I guess I grabbed an old one. Anyone have a currently active symbol that I could use?

SI

[SportsDino]

Best and Worst S&P 500 Index Funds by Cost at SmartMoney.com

Some of those seem to be valid in the trade gizmo.

Wish I woke up early enough to place market open orders (it wouldn't let me do anything yesterday because it was before start date). Already would have 1-2% probably just buying up some of my public pics.

Have not really built this up yet very smart-like or anything, takes a while to assemble a portfolio. Just thought I'd put my fake money behind some of my previous picks (granted I got into most of these positions at lower cost than this, I still think they are going to trend up overall).

[sterlingice]

That was the exact article I took it from (see how they mention ETrade's in the second paragraph)

SI

[Fidatelo]

I just put through my first couple trades, I chose "Day Order" for duration, what does that mean exactly? I hope it doesn't mean it's going to sell it at the end of the day?

[SportsDino]

Day Order should only have an impact if you are using Stop/Limit orders (you set specific prices for the transaction to execute at). If that price condition is not satisfied during the trading day the order is automatically cancelled at the end of the day.

If its good till cancelled, that order will stay in the system until it executes.

If you are not using stop/limit it should not have any real effect.

[Fidatelo]

Ah ok, I don't think I set any kind of limit on it. Thanks, SD.

[SportsDino]

Ignore my heavy trade volume at the moment, testing out functionality with some short term plays (stops, limits, so on). A lot of these will clean up by end of day, but I figure I'll play a little short term volatility and make a buck while seeing the responsiveness of the controls.

One thing to mention, cancel is not very reliable, so again I suggest being very slow in making your transactions. As it is I now have WMT both long and short, doh! So if you have a pending order, beware, even after hitting cancel it can still execute.

[Fidatelo]

My orders have been pending for a long time now, coming on close to an hour I think. Not really the 20 minute response time I read about.

[lighthousekeeper]

made $12,000+ today...not bad for a newbie.

this game's got a reverso-feel to it: when you do well in the game, you kick yourself for not doing that in real life. when you do poorly in the game, you feel good that it's only fake money.

[Fidatelo]

I don't get why my orders didn't go through all day...

[QuikSand]

Originally Posted by SportsDino

Wish I woke up early enough to place market open orders (it wouldn't let me do anything yesterday because it was before start date).

Me, too. I tried to buy 150,000 shares of HL last night at 2.00. Dang.

[SportsDino]

The trades depend somewhat on volume, so 150,000 shares might be too much to process for HL at any point in time yesterday. I'm assuming the volume restriction is to prevent trading too much in unrealistic situations.

[QuikSand]

Originally Posted by QuikSand

Me, too. I tried to buy 150,000 shares of HL last night at 2.00. Dang.

My problem was that when I had time to fuck around with this thing, our "game" technically had not started yet, so I was banned from doing anything. I believe had I logged on at 9:30am, I woudl have been able to make the trade, but alas.

[Fidatelo]

Looks like my trades went through this morning, not sure why it took so long. Definitely not a case of volume as I bought a total of 600 shares.

[SportsDino]

Not sure why it clunks around so much, obviously its not as responsive or useful as normal tools.

If you make a trade after hours it will wait until tommorrow to do it.

I was caught by the game being locked before the first day as well. Wish I did a little more pre-game prep and testing to warn people of all these quirks.

[sterlingice]

I have a limit order to buy a different index fund if it goes back down to the price it was at on the day we started. Hopefully we don't ever see that and it's all good but I suspect my order will be filled at some point this year

SI

[Flasch186]

In real life I had to buy some more short SDS today on the massive up run. If it should continue tomorrow Im not sure Ill buy more until it gets below 65 but Im feeling good about a short turn gain when this market comes back to earth.

[SportsDino]

I'm slowly getting my portfolio closer to my real life one.

I own about half of those in there now, although the big difference is I bought on March 9th-10th. Obviously there has been a run-up and I've been waiting for downswings to load up, but for simplicity sake I just bought a bunch I'm looking at in the game.

In real life, of those I have:
DIG, MSFT, FUN, GE, XOM, BP, WMT, TGT, SUN, PFE

I've had PAAS, JPM, MCD in the recent past.

Certainly no where near professional yet, but I think I'm going to clean it up a little at a time since right now I'm sort of in maintenance mode on my stocks so its hard to evaluate in the context of the game. (In real stocks my strategy is that the prices are going to stay higher than my intro point, I have no guesses about the current prices or short term behavior, and in fact burned a lot of money the first day on a childish speculation move on Ford/GM).

[SportsDino]

So back to guessing how this market works. We are in a new week, S&P has dropped bout 2%, although that is from a closing Friday spike.

One thing I've noticed, and hate, is financial news sources. If you read from Wednesday to Friday, almost everything is a massively rosy article. If you read today, everything is doom and gloom. Despite that the facts referenced today, was the news released last week (but not commentaried, or explained away in rosy articles)!

Is this a sign of media manipulation of the market? Or do they print articles based on which direction the market last jumped?

In the first, conspiracy most foul!!! In the second, simple minded policy (probably to explain symptoms rather than analyze causes), but with the unfortunate side effect of contributing to one way momentum shifts (i.e. boom/bust patterns).

I've seen this pattern so often (I store half the internet it feels like some days) that I'm certainly curious. It seems we have sort of a short term loop we are running, which is broken by long term events of signifigance (such as quarterly reports) and the occaisonal spike off some random news source (like a government bailout) which is often unpredictable which direction it will push things in.

I will say the general correlation of the market long term is roughly to the quarterly reports, if overall things have gotten better, prices have increased, and when worst, they've exploded... but it is an interesting phenonmenon. At the very least, it increases the tendency to try to time short term market highs/lows, which is fundamentally unsound (coming from an academia perspective), but seemingly a large portion of the industry.

-----

So if the above is true, watch this weeks news and discuss what you see. If the theory holds, it will be mostly negative oriented, and the stocks will truck on down along with it. If that occurs, then the interesting thing to observe is when the news turns back to rosy, and how it does so, in order that we might find out why (does it predict the market or lag it being my chief concern).

[SportsDino]

Apparently the site will cost average for you if you buy the same stock twice (as long as the type of order is the same). Some of my limit orders have executed and it shows only one entry.

This may be confusing if you had an entry that was negative and then is less negative despite the price continuing to be less than you originally remembered entering.

[sterlingice]

My "oh it's fun to keep money in a mattress fund" is in 2nd place

I still have a buy order to pick up an index fund when it gets back down to where it was when we started but the S&P is going to have to drop about 7.5% to get back down there.

SI

[Flasch186]

My short took an ass kicking in the game and in real life today. I havnt changed my 1-2 month opinion of the markets however.

[SportsDino]

I'm experimenting with an SKF play in the game (that I am not doing in real-life), I think the banks have risen too far and too fast. My real action lately has been locking in gains from early March with an eye to reload later, and buying small stakes in a variety of places to have more coverage. Thing is I have a time limit on this valley of lowness we're all dreading... I want to have my spots locked up well before the second quarter data comes up.

Right now I'm waiting for the shocker piece of news that will disrupt the big bank circle jerk. Hoping I get wind of it before the general market and can line up a real money short, but until I find something that is more than just my random speculation guess I can't load real money behind it.

Without the SKF/bank plays I think I would be hovering back at 1,000,000 again in game, after losing 25,000 my first day goofing around with things. Still don't like my portfolio set up, but its a weird time to buy right now (I bought my stuff at a massive low, so to me everything seems on the verge of a downturn right now). Eventually I'll have to break down and just match my long portfolio in the game, cause I don't have the brainpower to run separate calculations for real life and game.

[Flasch186]

well since the game is play money I didnt average in to anything and just dumped it all in on HD for an end of year housing stabilization and my short term short. eh, it's a shot I can risk on play money...

in the real world I continue to average into (or attempt to) on my longs and short.

[SportsDino]

So back to commentary, what is going on with the banks?!

My last note was a mention of an experimental SKF gimmick, I basically bought in the game off a random guess, and then went and did some research (obviously I suggest quite the opposite and was burned for 25,000 in funny money!).

So what I learned...

The banks I studied are staggering their charge offs, which is a fine tactic, no point in using up all your red ink all at once!

The surprising thing is inflows being larger than anyone expected, a lot of this in my opinion can be traced to large deals of money from AIG (particularly to some big banks) , and bailout money used to fund mergers, and rearrangement from those mergers being magicked into short term profit (structure profits up in time, push downsides back in time).

When it comes to merger news, when you hear 'higher than expected returns' from the merger, this is almost always the case. Its pretty simple to trace out, even with limited information, as you the benefits from cost reduction and supposed increases in revenue from market share don't appear in the first quarter of the merger!

Now is it bad that banks are showing a profit? A little bit yes, but mostly no. It is a heavilly subsidized profit is the main thing to remember, it is not like overnight these banks went from being morons to financial wizards, rather they have always been badly behaved wizards and with a little bit of muscle from Uncle Sam anyone can finagle a profit out of it. Some economists, and many clueless media commentators and conservative/liberal politicians (and some board members) are perfectly fine with the government basically sponsoring a fairy tale. Ultimately that argument comes down to the essential point 'the sheep are dumb and easily herded' which I cannot disagree with.

The downside to this is without some control or self-restraint we will dig an even deeper hole and cause a bigger bust in the future. As it is, this most recent bust is subsidized most likely by the post baby boomers (and foolish boomers) retirement funds, who most likely took the biggest losses in the stock crash, and probably are not getting their money in at the bottom quickly enough.

So some predictions:
Bank numbers will beat estimates, note most of these estimates are LOW (relative to prior year is the most easily verifiable basis). Bank stock prices will climb slightly after those announcements, and likely plateau (after volatility) at some point over the closing March numbers.

In my opinion, with banks successfully covering their problems (cross my fingers in hopes that they solve them with the extra time), and my earlier statements to the effect of an improving second quarter (see my comments circa February/March is where I got on the coming rebound train)... I think overall the next couple months will be stable to positive (note we already have jumped a large percentage since early March, so we may already have seen the best of the rally, it does not necessarilly have to sustain an upward direction, that is a very short term thinking approach).

My real portfolio was reloaded during a recent drop. Note I incorrectly predicted a short term downswing, and kept waiting for it to do my reloading... and all I managed to do was lock in some of my gains, only to reload at a higher price eventually anyway. Overall its not so bad, basically you need to see that as lost opportunity as really it did not cost me a single cent to do what I did, it just meant I didn't have the long as it was appreciating. That is something I learned a long while back, ignore beating yourself up over the times you should have bought but didn't and missed out, as in the end all that matters is after you buy that it goes up.

A more recent lesson is to not rely on short term volatility to try and game a few extra dollars, when all your data says there is a dominant trend at play. Basically I was complicating my position too much, having a 'this will be a great second quarter relative to the last couple' at the same time as 'I'm betting their is going to be profit taking and a downturn followed by a reversion to my earlier trend'. Although just to be safe I still think I should have liquidated my massive gains over that month, even though it means reloading high (after the news that this may be a sustained rally instead of a rally amongst fear and panic). Sort of back to my philosophy of 'you don't lose money if you always sell when its green and don't get too greedy'. Again, a battle of having the sure money, versus continuing the bet, you can always make another bet later (which is what I did with the reload) even though you are missing the implied opportunistic bet in the middle by just holding your original bet.

I'm in a chatty mood obviously, but I'm sure I could rattle off a few pages on an analysis of splitting one long transaction into multiple transactions over time (and information release), and how the simple common thought would be they are the exact same thing except the second one you are thinking too much, but how they have completely different risk profiles. It boils down somewhat similar to a hand in Texas Holdem, do you go all in on the flop with the 65/35 hand (i.e. buy and hold the long stock for the whole period), or do you bet something less on the flop and bet again or fold on the turn (i.e. buy long, sell on spike, buy again at new price after information event has occurred). Maybe that is too geeky of an analogy, but I'll leave it at that since I doubt anyone really cares.

The main point of this post: Information and its manipulation is a primary bit of knowledge you should be aware of when playing or even just trying to understand the stock market. Ultimately stocks are an abstract representation of cashflows over time, studying how the cash can be manipulated is a useful skill because it can tell you for instance how far a bank can finesse its balance sheet before it will inevitably need to show a bad quarter (and suffer losses in its stock price as a result). And this can all be negated by an odd third party (like the guvmint!) injecting capital into the situation.

[lighthousekeeper]

Current Rank Nickname Net Worth Total Return
1 lighthousekeeper $1,092,758.85 +9.28%
2 QuikSand $1,003,082.70 +0.31%
3 SterlingIce $999,980.10 +0.00%
4 Fidatelo $994,897.30 -0.51%
5 Flasch186 $987,355.10 -1.26%
6 SportsDino $960,094.20 -3.99%



This stock market thingamajig's a piece of cake! 9% return after a couple weeks? Time to take the rest of the year off.

[SportsDino]

That is a good job. If you convert to cash only now you could call it a year, 90,000 is better than most salaries I'm sure.

Meanwhile, I've lost 40,000, I'm practically in the poor house! I should quit before I lose my shirt!

[Flasch186]

today should be a good day for me.

[lighthousekeeper]

Originally Posted by SportsDino

That is a good job. If you convert to cash only now you could call it a year, 90,000 is better than most salaries I'm sure.

Meanwhile, I've lost 40,000, I'm practically in the poor house! I should quit before I lose my shirt!

if i only had a cool million IRL to play with.

[lighthousekeeper]

Am I the only one still playing this? Kinda takes the fun out of kicking everyone's ass if I'm the only guy playing.

[Fidatelo]

I'm still playing, check every day, I'm just unsure of what to do right now.

[lighthousekeeper]

Originally Posted by Fidatelo

I'm still playing, check every day, I'm just unsure of what to do right now.

pro tip: buy low, sell high

[SportsDino]

I haven't been giving it as much attention as I probably could. I've taken on multiple projects all at once and am knocking them out one by one so I can focus.

Overall, I wish my game portfolio was more diversified to reflect my real portfolio, but I've been too lazy to enter a bunch of transactions. I kind of want to add some commentary when I make picks as well, just to spark much whailing and gnashing of teeth!

[QuikSand]

It's pretty hard to focus on stuff like this when there's nothing really at stake. I have played a number of stock market games before, and it's alluring... but every time I (and most everyone) ends up in the same place, just sitting around.

I've actually been semi-actively watching the markets these last few weeks and have made some real trades, but all I did here was stagger my buy-ins a bit, that's all. Have yet to actually do anything in this game, really, and candidly I probably won't.

So it goes. Get some money on the table, and I'm engaged. Without the money, it's like playing poker for jelly beans.

[QuikSand]

Anyone still following this? One of my holdings (both in real life and in VSE) popped pretty big time this week, and when I sold my real shares, I had a little bell go off about this game, where I hold it (CELG), too.

I guess I'm basically in buy-and-hold mode, as I haven't made any transactions since loading up my VSE portfolio. *shurg*

[SportsDino]

I completely stopped paying attention, I was about 30K in the hole, am now 30K up after doing nothing but sitting on my longs.

Only one down currently in my portfolio is WalMart, which is above my real world entry price of 46.5, and in the game loaded up at the wrong point.

My biggest problem was messing around too much early with gamey behavior instead of replicating my bread and butter strategy and bringing up discussion on the whys and hows.

I will say that a few of my guesstimates are pretty much going as planned:
- My oil prediction holds on BP, XOM, and DIG.
- March was the turning point for the decline, turning off the shorts was the right thing to do even though it made me tons before that. (play the facts, not your past performance...)
- Market still has signs of softness in my opinion because of jobs. The market value on stocks has bounced, but it can't soar unless the true economy pulls its head out of the sand (yes I know folk disagree with me on this point, but it is central to my thinking that it is trend breakers, not trend followers, that define how the economy functions and who is rewarded).

I probably should fire up my involvement again, but I don't really have the time, and it doesn't seem all that exciting or brilliant to just report on 'yep still holding all these stocks I bought back in March'. Never mind it was the against the trend at the time, right now everyone would just think I'm spouting what is common knowledge. The 'fun' is in predicting something that other people don't believe because the 'common sense' tells them one thing... and then the prediction comes through. But I am disenchanted at how rapidly the media and the politicos and companies are quickly forgetting all the lessons they were spouting as being learned during the downturn.

[Flasch186]

nope

I totally forgot about it while doing the real thing. Ive actually continued scaling into my short position since that game started getting hurt all the while but I do believe the S&P goes back down into the 800's (which is a higher level than I first anticipated retouching) but Ive been wrong this whole way. Fundamentals dont mean shit.

[sterlingice]

Originally Posted by SportsDino

But I am disenchanted at how rapidly the media and the politicos and companies are quickly forgetting all the lessons they were spouting as being learned during the downturn.

I know this probably isn't the thread to get into this, but it's scared me, too. I figured it would happen but I can't believe how quickly and how easily it's going to happen again.

SI

[QuikSand]

*shurg*

I'm declaring time to sell on Helca Mining (HL), one of my big kills in this game (and personally). Bought at around $2 when we started this thing, it's up north of $6 now and, in my view, pretty overbought. Back when I went long on it personally, I was thinking that a target range of $4.50-$5.50 was reasonable... time to ring the register.

[SportsDino]

Ha, I stole HL from you, I sold off at 3.2, 4.8, and am timing my next exit. I think I'll follow your lead shortly... my model is riding a gold wave at the moment, but you are never wrong if you cash out at the end of the day!!!

[MalcPow]

I'd bet about a billion dollars that Quik will be back on Hecla soon enough. You can't fight true love.

[SportsDino]

Ha, I'd advise against falling in love with a stock, they tend to cheat on you even more than women! Really, these are for the most part imaginary votes of confidence in the cash flows of an entity so far distance from actual cash flows as to be ludicrous at times. Going with the 'load up whenever you know something has to go in some direction' and 'sell whenever it spikes too good to be true while you are in the deep green' has not failed me. You give up the value if it keeps soaring... but avoiding loss is the first goal, and I think throughput of your money actually increases if you can rotate a lot in your portfolio (assuming some of your picks on average are currently underestimated and some of your picks are overestimated, then your profit and edge comes from correcting your estimations faster than the crowd.... on top of accumulation of value of the stock itself over time).