DAYTRADING: The Highs and the Woes 2/17/01
I get letters, lots of letters from my legion of loyal and astute readers. But with my trading, co-moderating with Jenna, seeing my shrink, the inimitable doc Kronkite, and tending to my tin plants,(they’re doing fine by the way) in the back yard…who has time to respond? Not me. But I have a few moments now, so here we go.
“You have tin plants in your back yard? That’s ridiculous and un-American. What, you can’t grow roses or tulips like a normal person?” Gus, Winemucca.
I am not a normal person. Would a normal person spend agonizing hours on doc Kronkite’s lumpy couch? Would a normal person spend thousands for ten years of therapy? As for my tin plants, you want I should put them in my front yard? An eye-sore they’d be, and an inviting target for all the neighborhood dogs with bulging bladders.
“Are you afraid of a recession? Should I sell all my stocks? Just this week President Bush said that the “warning lights are flashing on the dashboard of the economy.” Janie, Moose Jaw.
Well Janie, it’s good to know that the president can turn a catchy phrase. But let me make it clearer than Waterford Crystal; I am not afraid of a recession, absolutely not. I’m afraid of Suzy with a heavy copper pot in her hand; I’m afraid of doc Kronkite with a blueberry muffin in his hand; I’m afraid of Dortmunder with anything in his hand. But my biggest fear is screaming “DELL, DELL, SHORT DELL” at the very pinnacle of passion with Suzy. This would not be good.
“Why do you constantly snicker at analysts and their upgrades, downgrades and targets?” Lenny, Secaucus.
I never snicker. I chuckle, chortle, sometimes even guffaw. So you’ll not catch me snickering, not even in the shower. But analysts are funny Lenny. QUALCOM drops from 200 to 50 and some analyst will downgrade it from a “strong buy” to a “buy.” Or CacheFlow will ease down from 160 to 14 and an analyst will downgrade CFLO from an “aggressive buy” to a “hold.” If you’ve still got CFLO at 10 you’ll be holding it until the Boston Red Sox win the World Series, or longer. And have you ever heard an analyst utter the word sell? That word is forbidden among the analyst crowd. And another thing Lenny. A “hold” is Street euphemism for “Dump this dog, pronto.” All the fund managers and pro’s know this. And now you know it.
“Why must you always make disparaging remarks about Maria? I’m quite smitten with her. Is she married? Involved? Maybe likes to fool around? Can you introduce me?” Homer, Belchertown.
Yes, no, no and no. She dresses nice, changes hair-do’s at record levels and carries more rumors than a five-story rooming house.
“Who’s the best trader you’ve ever known?” Sandy, Uxbridge.
That’s an easy one Sandy. Guy I knew growing up, great poker player. Poker players make great traders. I suggest you buy a deck of cards immediately. He went by the moniker the Briz, don’t ask me why. Never knew his real name. He knew probabilities, odds and had a terrific memory. He knew all the cards that were out. And every time he raked in a pot, he’d tuck half his winnings into his shirt pocket. He was locking in his profits. Never saw a bill come out of that pocket. Another fine trader was my boyhood chum, Barney Bufflekarp, who went on to make his stake as a bookmaker. He could set a line, a spread, on anything. And his lines were always solid. He’s a daytrader now and shares my passion for growing tin plants. We share tin growing tips.
“How come you need a trading partner? Why is he named Dortmunder? Who would stick a name like Dortmunder on a child? Why does he wear three-piece Savile Row suits, sport an IQ of 187 and carry a bumbershoot? What is a bumbershoot? Does Dortmunder really exist?” Percy Aloicous Bilbo, Moose Jaw.
Many have questioned the existence of Dortmunder. Some suggest he’s merely an apparition, a doppleganger; kinda like the kid in “The Shining”, with his imaginary friend Tony. Dortmunder is real. He trades, therefore he is. If you really want to know the truth he’s invaluable. Next to Jenna and the watch-lists and doc Kronkite of course, he’s a critical help to my success as a trader. We sit across from each other. I’ll start to do something stupid, like buy a couple hundred shares of Sun Micro or Telephone. Dortmunder will cock an eyebrow. “What?” I’ll ask, “A couple hundred shares of Micro, what could it hurt?” Then he’ll look at me with his piercing eyes, (he has piercing eyes) and say “Indeed,” Just “indeed”, and I’m saved from a bad trade. And stop orders. I often forget to enter stop orders after making a trade. He’ll say, You’ve placed an appropriate stop order my dear chap,” in that clipped British accent and sounding like a mother reminding her youngster to not forget to bring his lunch to school. Dortmunder goes nowhere without his bumbershoot. Indoors or out, rain or shine his umbrella is with him.
“I’m an investor, not a trader. I have a portfolio. I have a 401K. I think all traders are idiots.” Reginald, Philadelphia.
Have you looked at your portfolio lately Reggie? Take a peek, then call doc Kronkite. I think he may be able to fit you in. He’s a specialist you know.
“You often say that you play both sides of the street. What street? What does this mean?” Clyde, Secaucus.
Playing both sides of the street means trading long and short, sometimes simultaneously. It’s not uncommon that I’ll be long PHSY and short BRCM. Not all stocks go up nor do they all go down. Try it. It works.
“Who do you like this year in the American League east division.” Herman, Seattle.
This is the year for the Boston Red Sox. I called my buddy, Barney Bufflekarp and while he tends to be calm and cautious he was excited about the Sox this year. They’ve got a solid defense. Their offense is as powerful as any I’ve seen. If their pitching staff stays health they’ll knock off the Yankees.” He set the line at 3 to 1 for the Sox, 5 to 2 for the Yankees.
Keep those letters coming. I read ‘em all. New e-mail address: leekramer@rcn.com
Lee Kramer |
