The Gratitude Report : Sonic Highways

Actively practicing gratitude can change your life, but can also be hard to do.  To help me in this endeavor I write down 10 things each week that I am grateful for and then share them with you.  Here is this week’s list.

  • Daddy Lunch Day at my son’s school
  • Sonic Highways, the HBO series that features Dave Grohl and The Foo Fighters recording a new song in a different city each week.  It may be the best thing on TV right now.
  • Under Armour “Slides.”
  • Beachwood Brewery.  It makes the best beer IN THE WORLD, bar none, and it is right in my backyard.  Those of you outside of OC/LA have no idea what you are missing.

Don’t hate!

  • My 67′ Mustang.  Every time I get in it I am reminded of my late father.
  • My best friends Chris and Dave, both of whom I met at an age when I thought I was done finding new friends.
  • Internet transparency.  It’s amazing what you can find on it.
  • Yeah, it’s cliche’ but SoCal weather, especially in late November when the rest of the country begins the deep freeze.
Brrrrr.....

Brrrrr…..

  • The Headspace app.
  • The weekend edition of the Wall Street Journal.  It is so good that it brought me back to actual paper (the only real way to read it) for the first time in over 10 years.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

Destroying The Myth Of The Intermediate-Term Investor

Just wait for it.

Wait for it….

A couple of weeks ago an email went out to select Virgin America customers, the important part of which went like this;

The LOYAL3 Social IPO™ Platform allows individuals to purchase shares in our IPO at the same price, and at the same time, as institutions and other large investors. Participation is on a first-come, first-served basis.

Individuals can elect to purchase shares in our IPO through LOYAL3 in amounts ranging from $100-$10,000, with no transaction fees. Please don’t forward. This invitation is intended only for you and is not transferable. Your Elevate Gold or Elevate Silver Status will need to be effective as of October 29, 2014 to be able to participate.

It was an interesting, but not completely original way to offer IPO access to loyal customers.  Usually I am suspect of approaches like this as the big boys on Wall Street don’t like to share with the proletariat. Opening it up to the average Joe made me suspect that the offering was under subscribed.

Nevertheless, when a friend asked me about it I put aside my reservations and asked him a few questions, including why he wanted to buy, and how long he intended to hold.

His reasoning was straightforward and reasonable — he liked the service.  This was to be a long-term hold he said, in the neighborhood of 5-10 years.  He is a young guy, with no family, who has yet to enter his best earning years, which from my perspective made for some simple advice.

“If you believe in this company and it is a long term-hold for you” I said, “just put in as much as you can afford right now.”

“Right” he replied.

Yesterday I got a message from him;

“I am the biggest idiot in the world.  I talked myself out of buying that Virgin stock.  I reasoned airlines are a bad business and I didn’t buy.  I could have gotten in at $23 and now the stock is at $33.  I am such an idiot.”

“So would you have sold it already?” I asked.

“I would have put in a stop-loss to protect profits.”

“Really? But I thought it was a 5-10 year hold?”

“Lol. Who knows.  Good point!”

What my confused friend was illustrating is that there is no such thing as intermediate-term investing.  In the quest to save investors from their greatest foe, themselves, their only chance is to focus on the “now” and the “forever” —  everything in between is death.  Black death.  A vortex of bad decisions and negative returns that very few investors ever come back from.  You don’t want to go there.  It’s the Jan Brady of investing.

The closer you are to a day trader or Warren Buffett, the better off you are.

The short-term investor has time on their side.  It is transcendent and objective. The minute, hour, day, or week — if obeyed — tells them when to stop.  When the game is over.  And when to start it back up again.

The long-term investor relieves themselves of the burden of themselves.  All they need is a drawer to put their investments in and they are good to go.

The rub is that humans don’t naturally work well in either of these times frames.  We are drawn impulsively and inextricably to the intermediate-term. The time frame between “It needs some time to work out, I’m holding” and “It will never come back, I’m selling.”

I saw how this time frame works, up close and personal, early in my investing career.

My great-aunt Geneva was the oldest of the Kelly girls from Fillmore, Utah.  Yes, those Kelly girls.  A fiery redhead, she had a passion for life as intense as her as the color of her hair.  Though not a woman of means, a series of familial bequests had snowballed in her favor, leaving her in possession of a decent sized portfolio of common stock.

With no children of her own, she decided to leave the stock to my sister and I once she had passed. But before that could happen my father got very ill, and knowing our family as a whole would need it more, changed her will and left it to him.  Shortly after her death he took possession of my former stock, walked straight into the crash of 87′, and sold it all not far from the bottom.

I remember the stocks well.  There was Bank of America, Ford, CSX, General Motors, and a host of other blue chip names.  I can only imagine what that stock would be worth today if it had been given to me instead of my father.  Imagine, of course, because as a naive 20-year-old, I would have sold it just as quickly as he did after the crash.  Maybe even quicker.

That’s how the intermediate-term gets you; it feels so right, and the alternatives feel so wrong.

Day trading is one of the toughest things you can do and swing trading is only easier by comparison.  And the long-term approach requires investors to maintain a state of active ignorance. Neither time frame feels natural.

In early 2000 I read an article about some of the “dellionaires,” men and women, well, really only men, who had bought Dell stock when it IPO’d and had become millionaires, some many times over. This necessitated holding the stock for over 12 years.  Who, other than Warren Buffett does that?

I bought a stock in 1992, after the girl I was in love with introduced me to some friends who were looking for a drummer to join their band. They were all biotech grad students who worked as interns in the lab of a new pharma company.  (I’m sure you can imagine what a rocking band that was).

The company was (is) Cortex Pharmaceuticals and according to my new band mates, had a blockbuster drug that was going to cure Alzheimer’s.  I am still a long-term investor in the company and on the days when the stock actually opens, it trades around a nickel. That’s how long-term investing has worked out for me.

And those dellionaires, did the intermediate-term claim them when less than a year after that article was published the market crashed, or were they able to hold the stock for another 12 years until Micheal Dell made their choice for them by taking the company private?

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

The Gratitude Report: Brats And Beer

uXT_UpFQ

Actively practicing gratitude can change your life, but can also be hard to do.  To help me in this endeavor I write down 10 things each week that I am grateful for and then share them with you.  Here is this week’s list.

  • That both my children snore.  When I wake in the middle of the night the noise reassures me that they are safe and sound.
  • Any Chopin nocturne.
  • Old school ceramic Christmas lights.  Unlike their pathetically energy-efficient LED brethren, and despite the fact that they break easier and burn the crap out of your fingers, they immediately take me back to the joyous Christmas seasons of my youth as soon as I bring them out of storage each year.
  • Simpsons marathons on FX.
  • A drum set, a pint of good beer, and two hours at a practice studio.
  • Self-determination.
  • Podcasts.  I have become addicted to them and can’t believe how much joy they give me.
  • Bird by Bird by Anne Lamott
  • Finally learning to grill at the age of forty-seven.
  • The bratwurst and sauerkraut platter at the German deli near my house.

What did you think?  Did any of these resonate with you?  I want to hear what you are grateful for so drop me a line at brian@thelundloop.com and let me know.

-B

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

Kim Kardashian Peaked With Break The Internet

Kim Kardashian Peaked With Break The Internet

Kim Kardashian’s time may hopefully be up.

I was surprised.  I shouldn’t have been.  But I was.

When I first saw the photo of Kim Kardashian’s naked derrière — glistening from what I could only hope was baby oil — gracing the cover of Paper Magazine, I admit that I thought it was fake.   It was so big.

How could it be that big?

The proportions were cartoonish and I assumed that someone, most likely while high, had gotten crazy with Photoshop and put Kim’s head on a photo of a naked model and then blew the backside up like a balloon.  Okay, two balloons.

I also momentarily had the preposterous notion that the Kim Kardashian I knew would never pose for such a crass photo.  That the woman who leaked her own sex video would have higher standards for herself.  But to my amazement, it turned out that the photo was real.

I learned this from the wall-to-wall Kim Kardashian coverage — I call it Kimcuv for short – that bombarded me at every turn.

Kim Kardashian – I Exist Therefore I Exist

Typical of the coverage was an article from ABC News (yes, the news department) entitled “Why Kim Kardashian Decided to Show Full-Frontal Nudity.”

My mind raced with potential answers to that provocative question.

Was it to raise awareness of the plight of the homeless? Nah, probably not.

Perhaps to bring attention to the atrocities being committed by ISIS in the Middle East right now?  Yeah, pretty sure that wasn’t it.

Maybe to self-aggrandize and push some sort of product?  I felt I was getting warmer, but ultimately it turned out I was wrong.

Mickey Boardman, Paper’s editor, explained that it was Kardashian’s idea to “break the Internet.”

He continued, “And it was her idea to take off her clothes and show more than her butt. But we didn’t say, ‘Let’s do a cover with your butt hanging out.’ She said she was willing to take her clothes off and one thing led to another.”

That’s the type of answer I should have expected; vapid, uninspired, and frankly, lazy.

In this same article I not only learned that, yes, it was in fact oil on her butt, but also, how it got there.

“It was the makeup artist,” who put the oil on, Boardman said. “It was someone who she works with a lot so she felt comfortable.”

I’m not sure there is any world that exists in which I ever get to the point of feeling comfortable when a makeup artist smears oil on my ass.

In another article I was told that the photos from the spread were actually not crass, but art.  This is because they were taken by legendary French photographer Jean-Paul Goude.  Yes, the Jean-Paul Goude.

As if having Francis Ford Coppola behind the camera would have made Kim and Ray J’s video cinema verité.

Turn out the Lights and for the Love of God Let It Be over

Though making fun of the Kardashians has become national pastime, there’s no sport in it anymore.  It’s become too easy.  Too hacky.  Anyone with any self-worth should feel dirty taking part in the activity.  In fact after this I’ll be crying in the shower as I scrub myself down with a wire brush.

I don’t begrudge Kim her fame.  Nor her fortune.  I just don’t want to see or hear about her anymore.  Why is it that we can land a spaceship on a comet, but we can’t create a content filter for those of us who wish to remove the Kardashians from our lives?  What good is technology anyway?

My hope is that the world’s fascination with Kim Kardashian has peaked.  In the stock market, no matter how hot a stock is or how long its run has lasted, at some point it becomes so saturated with buyers that there is nobody else left to buy it.  It’s then that a top is formed and the stock comes crashing back to earth.

The media frenzy around #BreakTheInternet feels like we are reaching a saturation point.  That there is nobody left to buy into the Kim Kardashian saga.  I mean, where does she go from here?  What else could she possibly do to hold our attention?

Don’t answer that, please!

I can hope though, given that fact that the likes of Nicole Ritchie and Kim’s former BFF Paris Hilton — herself a veteran of the leaked sex tape — have thankfully drifted into semi-obscurity.  At least enough so that for all intents and purposes they don’t exist in my life anymore.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

In Which I Tweet’eth The Mid-Term Elections

I hate both parties and I am an equal opportunity piler-oner.  But since this time it was the Dems turn to get their asses kicked, well, let the tweets fall where they may….

Tune-in in 2016 when the GOP gets their turn.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

How To Win A Complete Trading Library

private-library

There is an oft repeated expression – made famous in the Malcolm Gladwell book “Outliers” — that says you need 10,000 hours of practice to achieve mastery of any given field.  That’s a lot of time.

Take trading for example.  Even if you practiced for 6.5 hours every day the market was open, according to Gladwell, it would take you 6.15 years to get to the level of expertise where you could make a living at it.

As human beings we naturally want things faster.  As traders we want them now.  Unfortunately there is no short cut to becoming a master trader, but there are some hacks that can expedite the process somewhat.  And that’s where The Lund Loop giveaway comes in.

I am giving one lucky winner a complete trading library of books — my trading library in fact.  These are the same books I used to learn about the markets and trading, and if you are a novice, these are also the same books that can shave months, if not years off your learning curve.

Even if you are an advanced trader, these 25 books will be a great addition to your own library.  Here are the books I am giving away…

UPDATE:  The generous people over at McGraw-Hill have added 5 titles to the giveaway bringing the total number of books to 30;

  1. Market Wizards by Jack Schwager
  2. The New Market Wizards by Jack Schwager
  3. Stock Market Wizards – Interviews with America’s Top Stock Market Traders by Jack Schwager
  4. How to Make Money in Stocks (4th ed) by William O’Neil
  5. How to Make Money Selling Stocks Short by William O’Neil
  6. 24 Essential Lessons for Investment Success by William O’Neil
  7. The Successful Investor by William O’Neil
  8. Reminiscences of a Stock Operator  (Annotated w/ Foreward by Paul Tudor Jones) by Edwin Lefevre
  9. Trade Like a Hedge Fund by James Altucher
  10. Backstage Wallstreet by Josh Brown
  11. The StockTwits Edge by Howard Lindzon
  12. Trading Options Using Technical Analysis – Greg Harmon
  13. The Trading Book by Anne-Marie Baiynd
  14. The Trading Book Study Guide by Anne-Marie Baiynd
  15. The 5 Secrets To Highly Profitable Swing Trading by Ivaylo Ivanov
  16. Candlestick Charting Explained by Gregory Morris
  17. Getting Started in Chart Patterns by Thomas Bulkowski
  18. Millionaire Traders by Kathy Lien
  19. Techniques of Tape Reading by Vadym Graifer
  20. The Complete Turtle Trader by Michel Covel
  21. The Disciplined Trader by Mark Douglas
  22. Trading In The Zone by Ari Kiev
  23. How I Trade Options by Jon Najarian
  24. Laughing at Wall Street by Chris Camillo
  25. The Intelligent Option Investor by Erik Kobayashi-Solomon
  26. The Complete Guide to Option Selling by Michael Gross
  27. Dual Momentum Investing by Gary Antonocci
  28. Money by Steve Forbes
  29. No One Loves Your Money Like You Do by James Jackson
  30. Surprise Book #23 -TBD

That comes out to over $750 worth of trading and investing books.

So how can you win all 25 books?  It’s simple, just click the contest link below to enter.  And once you’ve entered you will have an opportunity to increase the odds of winning in your favor even more.  It’s all reward, no risk, the type of set up every trader dreams of.

ENTER THE CONTEST

Good Luck!

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

What To Do Right Now In The Stock Market

risk

A few weeks back I warned that we might be seeing signs of topping in the market.  Whether or not we have seen the top is an open question and won’t be determined for a long time.  However, the recent volatility has unnerved a lot of investors who are worried that a crash might be coming soon.

Tomorrow in The Lund Loop I am going to tell you exactly what you can do right now in the market to minimize your risk, but more importantly, maximize your potential upside.

You can subscribe for free by just clicking this link.  As an added bonus, just for subscribing you will receive a free copy of my book “Trading: The Best of the Best – Top Tips for Our Times,” which contains over 200 trading and investing tips from 60 of the smartest people you will ever meet.

See you tomorrow.

-B

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

Satan Wants You To Buy These Stocks

satan_wall_street

Everyone knows that each time a share of $AAPL is bought, another angel gets his wings.  But what about the other side of that equation? What about buying those “sin stocks” that Satan himself probably owns?

I’ve got a piece up this morning on AOL’s Daily Finance that explains why from a financial, moral, and pragmatic standpoint you SHOULD be buying these types of stocks.  And not just the obvious suspects. Sin stocks don’t just announce themselves with tickers like $DETH, $HELL, or $CNCR, so I’ve got a whole Sodom and Gomorah-ish list to check out.  Just click the link below.

Even The Righteous Should Invest in Sin

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

Why You Never Say Never In The Stock Market

Robert Downey Jr.

Investing may be your passion, but the process — the analytical process you need to find winners — should never fall prey to the trap of sentimentality, or worse yet, nostalgia.

This is where investing and art part ways.

As Americans we love our art, which in this modern world really means television.  With six-hundred channels to choose from we stalk our content with a retardedly keen eye, curating out that which resonates deepest in our soul, and throwing the rest away as if the chaff of the craft.

We binge watch our favorite shows, infusing an immediate and intense relationship with our favorite characters.  We love them — often more so than the material figures in our lives — exulting in their triumphs and despairing with their failures.  It is a part of our human condition, which forgets the line between art and reality.

Not so long ago I found myself in the restroom of an office building, standing in front of a waterless urinal which had recently been installed.  I turned to the right and remarked to my colleague standing next to me;

“Do they really expect these things to catch on?  The smell is awful.”

“Well they are supposed to cut down on water use.  It’s all a part of a drive to make the building more green,” he said.

“It sounds like they want to make it more yellow,” I replied, my Shakespearian wit going into overdrive.

“They’ll never go for it,” came the reply from my left.

“Who?” I said, turning to face the author of these comments

“The unions.  They will never go for it.  These waterless urinals mean no plumbing.  No plumbing, no work for the plumber’s union.  They will never go for it.”

The author of these comments was a forty-something man, who despite his scraggly beard, unkempt hair, and baseball cap pulled low across his brow, could not hide a somewhat boyish face.  There was a familiarity in his eyes that I could not immediately place.

“Right,” I said.  “The unions. They will never let them get away with this.”

“Besides,” he continued.  “They make the place smell like piss.”

We all laughed and small talk was exchanged as we washed our hands and made our way out into the hall.  Turning away from the stranger, I looked at my colleague and almost immediately, as he said, “Do you know who that was?” realized in fact who I had been talking to just a moment earlier about urinal politics.

“Luke Perry,” I said.

“Luke Perry,” he replied.

Imagine a time before the internet, before social media, and before six hundred channels of cable pumped content into our homes 24/7/365.  A time known as 1990, when there were only three and a half real television networks, and if you were on one of them with a hit show, you were a true superstar.

And Luke Perry was a superstar.  Playing the role of the ever brooding Dillon on the seminal show “Beverly Hills 90210,” he reached a level of fame that you could only imagine today if Robert Patterson and Justin Bieber were mutated in some horrible industrial accident into the cutest vampire pop star that ever lived.  It’s too dreamy to even imagine.

He was white-hot.  Every girl wanted to sleep with him and every boy wanted to be him.  But when his show ended, effectively so did his career.  Now he is the answer to a Trivial Pursuit question.   A Twitter punchline at best.

This is where art and investing reconnect.  Stars, once fallen, traditionally never rise again.  And stocks, particularly momentum stocks, once broken, do not return to their glory days.

The overwhelming exception to this rule seems to be $NFLX.  A stock which rose 600% in a little over two years and then lost 83% of it’s value in the following year.  This stock should, like Luke Perry’s career, be dead and buried.

History is full of momentum darlings that crashed and burned and have never recovered.  $CSCO, $BRCM, $BBRY, and $POT immediately come to mind.  That is the way it has always been.  Like a financial law.  So has it been written, so shall it be done.

But this bull market is changing the rules.  Stocks like $NFLX are not only resurrecting themselves, but surpassing their previous glory.  Look around.

$QCOM, a 90’s internet bubble casualty is getting dangerously near its all-time highs.  $TASR, a one-time momentum favorite in the early 2000’s is about 33% off its all-time high.  Doesn’t sound too impressive until you realize that from its peak at one point it had lost 99.992% of it’s value.

This market is so powerful that it has done the near impossible.  It has turned “Luke Perry” stocks into “Robert Downey Jr.” stocks.

I don’t know if this is a good sign or bad sign for the future prospects of this market, but it is sure more interesting to talk about than waterless urinals.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

Tweetlights Of The Week

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.