My inviolate stop loss rule is 15%. You trail it. the stock goes up. You lift the stop loss.
I think 15% is too high. It should be 5% to 8% in today’s market.
I asked Scott Udine for his practice. His answer:
It depends really on the stock and its average daily range, its volatility and your cost basis.
What I always try to do is as quick as I can get my stop up to my cost basis, so we do not lose money on the position if it turns tail. From there, we adjust upwards as the stock rises.
Not an exact science, a lot of tweaking and trial and error.
Short-term interest rates stay steady: But long-term rates, which the Fed can’t influence, could be rising.
WASHINGTON (MarketWatch) – The Federal Reserve Tuesday left its key interest rate and the size of its bond purchase program unchanged, as widely expected. The central bank’s rate-setting Open Market Committee maintained the target range for the federal funds rate at its all-time low range of 0 to 0.25%, where it has stood since December 2008. It kept its bond purchase program, nicknamed QE2, at $600 billion. In its statement, the Fed said that the economy recovery is continuing “though at a rate that has been insufficient to bring down unemployment.” Thomas Hoenig, the president of the Kansas City Fed, dissented again, warning that the large stimulus could cause inflation expectations to rise and choke off a recovery.
The Austerity Zone: Life in the New Europe. A slide show from the New York Times. Interesting. Click here.
The frustration of youth. It’s one of the most frustrating aspects of life. You’re selling something. You’re buying something. They don’t buy. They don’t sell.
It’s bleeding obvious to you that they should.
But there’s no argument that will convince them.
Reality: It’s their money. It’s their life.
There’s nothing you can do. It’s horribly frustrating.
The only solution is to move on, not burn any bridges AND revisit them in a week or two.
People often change their minds for the strangest of reasons.
Richard Holbrooke died on the operating table. His last words were “You’ve got to stop this war in Afghanistan.”
Sarah calls Joe.
“Hi. This is Sarah Palin. Is Senator Lieberman in?”
“No, governor. He’s out today. This is Yom Kippur.”
“Well, hello, Yom. Can I leave a message?”
Job Opportunity at the CIA
The CIA had an opening for an assassin. After all the background checks, interviews and testing were done, there were 3 finalists: two men and a woman. For the final test, the CIA agents took one of the men to a large metal door and handed him a gun.
‘We must know that you will follow your instructions no matter what the circumstances. Inside the room you will find your wife sitting in a chair. Kill her!!’
The man said, ‘You can’t be serious. I could never shoot my wife.’
The agent said, ‘Then you’re not the right man for this job. Take your wife and go home.’
The second man was given the same instructions. He took the gun and went into the room. All was quiet for about 5 minutes.
The man came out with tears in his eyes, ‘I tried, but I can’t kill my wife.’
The agent said, ‘You don’t have what it takes. Take your wife and go home.’
Finally, it was the woman’s turn. She was given the same instructions, to kill her husband. She took the gun and went into the room. Shots were heard, one after another. They heard screaming, crashing, banging on the walls. After a few minutes, all was quiet. The door opened slowly and there stood the woman, wiping the sweat from her brow.
‘This gun is loaded with blanks’ she said. ‘I had to beat him to death with the chair.’
Harry Newton who is engrossed in Matt Taibbi’s latest book:
It’s the story of what happened. I’ll write more later. Meantime, it’s a great read. I’m about half-way through. Boy, does he not like Alan Greenspan. He has a chapter on him called ,The Biggest Asshole in the Universe.”
I’m spending a lot of time getting my dictionary ready for the iPhone/IPad/Android. Exciting for me to move to a digital edition. I don’t know what the demand will be. But I have my fingers crossed.
Harry- yesterday after reading that some of your bond funds are down I asked about stops. You seem to have tight stops for stocks – as rates climb higher and bond funds (especially Muni bonds) are getting pounded- what about stops for these?? You said you would address this today but I see only mention of stops for stocks.
Sounds like the Sarah Palin jokes are starting to be more and more popular on the upper west side. If I remember correctly Harry, you were so excited about Obama that you actually went to work for his campaign. I think you would agree with me that Sarah Palin didn't vote for Obama. Who's the fool Harry?………I guess the joke was on you, but unfortunately no body's laughing.
Nobody is laughing, sadly. I got sucked in, like a lot of people — enough to elect him, sadly.The alternative, however, was even worse.
Harry –
I've juxtaposed your brief yet cogent comment regarding Obama v. Palin (“Nobody is laughing … I got sucked in … the alternative, however, was even worse”) against portions of Taibbi's “Griftopia”, the subject of your latest blog. (See http://mkueber001.wordpress.co…/) We all got sucked in – and that includes those of us who perceived Obama as a Liberal shining light. That Obama would receive the acrimony of the Right – those who despised him from the outset, lied about his origins and politics, and aim to destroy his presidency at any cost to all the rest of us – should come as a surprise to no one. However, he is also a source of considerable disappointment to the Left, who have seen that his first political instinct is not to stand on principle or fight, but to accommodate or retreat.
Our battle over healthcare legislation shows this best. Leadership was lacking from the outset, with Obama caving on the single-payer option even before the political give-and-take had begun. Taibbi has labelled the result the “trillion-dollar bandaid.” True healthcare reform fell victim to political expediency, with little to show for it at the end of the day. To quote the reviewer:
“According to Taibbi, ObamaCare was the result of a political party (the Democrats) that felt compelled to pass anything that could be called healthcare reform. To accomplish this, Obama sold out not only to various swing-vote Senators at $100 million a pop (Nelson, Landrieu, Inouye, Dodd, and Lieberman), but more importantly he sold out to the healthcare industry, with sweetheart deals and continued anti-trust protection … “
Those who fought the hardest for Obama's election have found him to be not the principled fighter we sought, but a muddling political centrist who caves on principle as soon as the lobbyists throw their weight around and his implacable political opponents begin to snarl. Having said all of this, an earlier commentator indicated that you worked in support of the Obama campaign, and I commend you for having done so.
With regard to Obama v. the world of Palin – well, the mind boggles, does it not. The parlous state to which this nation's politics have sunk is exemplified best by the simple fact that Sarah Palin – who I admit would do just fine as a letter turner on Wheel of Fortune – was selected above all by the septuagenarian presidential candidate of one of our two major political parties (and one who throughout his political career has professed his love of country and concern for its security) to reside a heartbeat away from the presidency.
Matt Taibbi has a knack for a colorful turn of words. As to the Tea Party, Palin, etc., Taibbi said that the Tea Party put forward “some of the most egregiously stupid morons on our great green earth. By rallying behind dingbats like Palin and Michelle Bachmann…. Bachmann is the perfect symbol of the Dumb and Dumber approach to high finance.”
High finance – the economy in general, foreign affairs, national security – you name it. And see how close we came to having as United States senators (I repeat: U.S. senators!) the “mama grizzly” pair of Sharron Angle and Christine O'Donnell.
As to any comparison of Barack Obama to the God-awful alternative … Harry, you were and are so right. In the spirit of the season and to paraphrase Timothy Cratchit, may God help us, every one.