Notes from Stocktoberfest
It’s been a great couple of days here in San Diego for Stocktoberfest.
Howard Lindzon has an incredible network and put on a great event with some of the smartest people from tech and the markets. I set out with a plan to meet and hang out with as many of these people as I could. And I certainly did that.
I got so many ideas about new trends, new startups, trading and the market in general. It looks like lots of others did too. Just look on Twitter at the #stocktoberfest hastag.
I took some notes from the presentations (mostly related to the trends and investing ones) to give everyone who wasn’t there a sense of the event…
radical disclosure - if you share the right things… laughs, smiles, ideas… doors open.
passion and domain expertise - just get started
journal - the best investors write it down
mentorship - the faster you find mentors, the faster you’ll rise
diversification - been oversold
so do less, and keep costs down
* better financial web
* fashology (style meeting fashion)
* 3D printing
* Data as biotech (measuring more with fitbit, etc.)
* Video - youtube, Skype, mobile phones, tablets
Lindzon and Ivanhoff on the Stocktwits 50
only 1 in 4 stocks outperform the S&P 500
ways to find them:
52 week high list - most big winners spend the majority of their time on the 52 week high list
relative strength - in a bad market, stocks that hold their 52 week highs are more likely to lead when the market becomes good again
stocktwits 50 - trend stocks, shows social momentum, etc.
DDD - at least 20% higher from here
Getting off the trends, or exiting: notice the change in sentiment from news items, notice the smaller volume on highs,
Used to be Price AND volume… volume now less important with HFT, etc. Now it is Price primarily.
Difference between stocktwits 50 and IBD 50: social sentiment
Gurtin Fixed Income Fund with $6.5 billion under management
ex goldman sachs, jim cramer in his training program
households now hold 74% of municipal debt
writes a quarterly letter
30 year bull market for bonds
risk is not understanding what you own
issue with bonds, ppl don’t realize what they actually own
most important thing happening today is the Fed — forcing people to take risk and driving inflation higher (“inflating the way out of deflation”)
dirty little secret is everyone wants inflation
doesn’t know what 3-5 years looks like. so he’s staying in shorter term bonds.
howard - bubble in startups is partly due to rich people looking for higher risk (since 10 year bonds will only deliver 1.7%)
never been a better time for entrepreneurship
fundamental - sales, earnings, valuations, news, macro events, Fed, Europe, etc.
“does the story make sense?”
technical - price and volume, moving averages, fibonacci, pivot levels, supper and resistance, timeframes
“who is in control, buyers or sellers?”
scanner at alphascanner.com
stage 1 - accumulation
stage 2 - markup
stage 3 - distribution
stage 4 - decline
real long term - weekly - 200 day or 40 week
long term - 150-250 days - determine primary trend here
intermediate term - intraday - 10-30days - risk/reward analysis here
Short term - 5 day - entry/exit price here
ask 2 questions
1. where has a stock come from? RISK
has it expended a lot of energy, is it extended, what’s the volume pattern
2. where does it have the potential to go before resistance and support found? REWARD
is there enough profit potential for perceived risk
1- anticipate all potential scenarios - seek out low risk entries
what can go wrong?
Note: JC has already got his presentation from yesterday posted
Top Down method
Analyze all asset classes -> narrow focus to select concepts (us stocks going higher, etc.)
focus on non-correlation
watching in 2013:
- german dax near all time highs
- oil/nat gas
- us steel
- china/us (fxi/spy)
- brazil/us (ewz/spy)
“Success leaves clues, so study success!”
books: one up on wall street (fundamental), the warren buffet way (value)
5 qualities of ALL great traders:
1. CUT YOUR LOSSES!
how: check for sell signals, lower price lows on higher volume
always protect your confidence
bigger your loss the larger gain it takes to get back to even
- cut losses
- having a plan
- what are you going to focus on? (focus on the positives)
- reading and feeding your mind
- who do you associate with?
3. NO EGO!
- separate ego from trading
- when wrong, don’t argue with the market
- Jordan, Paul Tudor Jones
- don’t be a boom and bust trader
- reasonable goal: shoot to be positive on a quarterly basis
5. Students of the Market
- never get complacent
- always eager to learn and improve themselves
- post analysis of your trades
Holy Grail of Belief/Potential/Momentum
BELIEF —-> ACTION —-> RESULTS —-> REPEAT, a self fulfilling cycle
make decisions, do post analysis of your work and LEARN FROM IT
Joe gets voted the best presentation for this closing slide and picture of my fellow alum Jordan at UNC.
Anyhow, these were the highlights from this yesterday’s presentations in my mind. I’m off to Coronado beach for a run and then grabbing some tacos. It’s gorgeous here.