Ya'll, ... don't feel guilty about trading long OR short. This argument between 'traders' & 'investors' has been going on for a couple of hundred years now (Kim , have you read the reminisces book yet?). It all relates to 'fundamental' vs 'technical', ... some peple have a problem with traders, ...so what, ... that's their perception of reality problem , not yours! Yes, alot of it relates to jelously (even envy) of 'traders' when 'investors' are losing money.
Longs vs Shorts, ... I notice that people that have traded options & futures don't have a problem here & are as likely to go short as long. The 'game' in stocks however is bias against going short as a result of laws created in the '30's (uptick rule/min price rule/margin rules). Matter of fact, in the '20's the margin was only 5-10% and stock traded with high leverage & volatility like commodities of today's markets.
My purpose is to do my trading 'job' to the best of my ability to obtain $$$ for a good lifestyle for myself/family. It does not matter if the money was obtained from the long side or the short side or the technical side or the fundamental side. It all spends the same!
However, looking back over the years, at my past trades, the fundamental approach, for me, has gotten me into BIG trouble. The technical approach on the other hand, has been the only consistant way that I have made money. Why? One has 'money management' the other does not, IMO. The so-called fundamental 'investor' most often becomes an unwilling 'speculator/trader' and most often the worst possible time. I bought IPM on fundamental & was forced to 'bail out' with losses at 3 1/4.
Let me quote Jesse Livermore for perhaps the best summation:
" You will recall not so many years ago it was considered safer to have your money invested in the New York, New Haven & Hartford Railroad then to have it in a bank. On April 28, 1902, New Haven was selling at $255 a share. In December of 1906, Chicago, Milwaukee & St.Paul sold at $199.62. In January of that same year Chicago Northwestern sold at $240 a share. On February 9 of that year Great Nortern Railway sold at $348 a share. All were paying good dividents.
Look at those "investments" today: On January 2, 1940, they were quoted at the following prices: New York, New Haven & Hartford Railroad $0.50 per share; Chicago Northwestern 5/16, which is about $0.31 per share. On January 2, 1940, there was no quotation for Chicago, Milwaukee & St.Paul - but on January 5, 1940, it was quoted at $0.25 per share.
It would be simple to run down a list of hundreds of stocks which, in my time, have been considered gilt-edge investments, and which today are worth little or nothing. Thus, great investments tumble, and with them the fortunes of so-called conservative investors in the continuous distribution of wealth."
|
