First thing every morning, we should take a blank piece of paper and ask ourself, “How has the world changed today?”
Next question is “What should we do about it in our investment portfolios?”
The answer to the first question for the last several months is: Interest rates are rising.
The answer to the second question should have been: Buy TBT and TBF.
I screwed up on Best Buy. I did my shopping visits, found nothing of interest to buy, couldn’t imagine how Best Buy would survive against Amazon and shorted the stock. When it went against me, my inviolate stop loss rule kicked in and I covered my short. Since then Best Buy, for reasons that completely escape me, has run through the roof.
The three lessons here are:
1. Our inviolate 8% stop loss rule works 99% of the time.
2. It’s good to be convinced of the wisdom of your own brilliance. But you’ll still be wrong because the market disagrees with you. The ONLY thing that’s correct is the stock price. That’s why we play this stupid game.
3. I should have recognized that I was totally wrong on BBY and bought the stock. … Now maybe it’s time again to short Barnes & Nobles (BKS)?
Cataract surgery is the operation du jour. More useful than botox and a nose job (though I certainly need one of those).
This is me after yesterday’s cataract operation on my right eye trying to write this morning’s column. Not easy with one eye.
I’m told the operation went well. The bandage comes off this morning. My new eye will focus on computer screens. For long distance and tennis I’ll still need glasses. That’s the way I “designed” it. Everyone who’s had a cataract operation says the result has been so good their only regret was not getting it done earlier in their life.
Hospitals are not fun. Every patient is fat, old and decrepit.. Physical exertion means pushing their walker, or sliding onto awheelchair. Hospitals produce more paperwork than you can imagine. By the time the hospital had me processed, my papers filled a big bright red three-ring binder. Automation in hospitals means sprinkling printers and copying machines into every nook and cranny. They checked my name and date of birth at least ten times. The best “automation” was when a nurse took a huge black magic marker and put a big X on the forehead above the eye they were meant to fix. Just in case.
I slept 12 hours last night. The gorgeous Ukrainian anesthesiologist wore me out with her drugs. I was “awake” through the whole operation. That “awake” was how I’d like to live the rest of my life. I want more of the stuff she was putting in my left arm. Thanks to Dr. Michael J. Newton, my eye doctor, (no relation) for a job well done.
Congratulations on your first eye job, Harry…I am proud of you! Now…get the other one done without waiting so long…I booked my second eye operation on my second post-op visit, a week after the first one. You will get used to all the eye drops about the time you don’t need them anymore.
Love that “Twilight’ anesthetic. If only they could sell it OTC!
Harry, I do think stop losses can be helpful, but a general 8% (I think you used to use 10%) rule should be reconsidered. Just consider your TBF and TBT recommendations above. TBT is just a 2x levered form of TBF, this is what “ultra” means in all these ETF names. If TBF goes down 5% then TBT will go down 10%. Does that mean you should stop out of TBT and not the TBF even though they will still move in the exact same direction going forward??? Stop losses (as well as position sizes) should be based around the volatility of the stock itself.
Anyway, that is my two cents, have a quick recovery!
I like 8% for stocks. For ETFs like you suggest…. you have to figure your own number. the critical issue is to HAVE the discipline of a stop loss rule.
I designed my eyes the other way. Now, instead of wearing $150 glasses for driving, I wear 3-for-$7.88 glasses for computing. I keep them all over the house. http://www.bookmakingblog.com/2010/05/cataract-surgery-post-op-report-1.html
That makes sense. But I also wanted the protection of glasses when playing tennis and biking.
Harry, if you want to complain about the U.S. health care system, move back to Australia. We won’t miss you and your investment “advice.”
FYI – Silver Wheaton for the long haul.
…..the troll is back in town.
Cliff – your rude comments were not missed at all and I bet most (if not ALL) of us who enjoy Harry’s column would prefer if you just went somewhere and NEVER came back with your trolling.
Not true! I’ve known Harry since 1973 when he was a wild motorcycle riding hippie living in NYC’s downtown Village. I’ve seen how tough and crude he can be with folks pitching him on their brilliant new ideas. We see it all the time in his entertaining daily column. He loves shocking folks. He doesn’t pull punches or pander people, except his beautiful daughter, smart son and lovely wife. So, I get a kick out of seeing Cliff and occasionally others kick back. Sometimes I even agree with them! :-))
Thanks, dude. Mile High is clueless. While I can be a little shrill with Harry, I am a regular reader of the blog and enjoy most – well, some – of it. Harry can take care of himself.
There is nothing more dull than a blog where EVERYONE agrees. Perhaps Mile High should move on, or find a Socialist leaning blog.
Socialist? Now, that is hilarious and further proof that you really are a troll! I don’t always agree with what Harry writes on here but I can’t think of a time when you have actually had anything constructive to offer on here when you disagree – which seems to be all the time. Everything you say seems to come in some form of an insult which is usually a sign that you are not bright enough to make an actual argument. You also constantly complain about how worthless this site is yet you keep coming back quite frequently – judging from your whining sessions.
As for what pahowley wrote, I never said or implied that Harry is not capable of handling himself. It seems clear that pahowley sees you as entertainment which I can understand. Even I get a kick out of others referring to you as some unmentionable body part. You must have been the antagonist class clown and just never grew out of those high school years. Even our pets do many that things that amuse us, if you know what I mean!
Cheers!
I actually think Cliff is occasionally right. And so has Harry acknowledged that. I also think Cliff is sometimes unnecessarily crude and insulting. But life goes on….and so does Harry!
And I actually post under my real name.
Feel better. My wife had both eyes done several years ago with Rx lenses and now she doesn’t need glasses . Cost a bit extra- no insurance but worth no glasses. I wish the arthritis was better though.
Best,
Good for you for finally getting your eyes done! You will be happier! Regarding Best Buy… as you will recall, I once knew everything there was to know about the products and loading docks of many companies. I found that what I knew about the loading dock had little or no relationship with the stock. The financials mean more than what goes on in the store.