Market Talk

[Spaf]

imported post

MarketTimer wrote:

Good luck!
MT

Ditto! Spaf

 

[grandma]

imported post

MT:

On Jan 31 you said: "Rolled my TSP into a Traditional IRA on the third of January 2005."

Yesterday you said:
" I resigned from govt service about (wow) four years ago and rolled my funds over to a brokerage account at a investment firm."

I have my ears attuned to what may help me make decisions about what to do with my tsp funds in the too soon future, so I have a Question for you since you have been there: :?is there a special form to sign, or special lingo I need to be aware of so that I don't have to close it all out at once? Did you have to pay a fee, or take a penalty to do that? Any time frame to finish the draw?

Reading this back over I wonder if I may have misunderstood, was it just a matter of leaving the funds these four years and just now getting them rolled over? That would indicate there is a lengthy time frame - or is it age related like the IRA's are??

Thank you for your patience - (in advance) (so Be patient)!!

P.S.
- meant to also ask how Is that new job? It sounds like you are doing well, sorry you don't like your clients. congratulations for your holdings -, or non-holdings, whatever bears call it............!!!

 

[Guest]

imported post

Grandma,

If you resignor retire you can leave your funds in your TSP until age 70.5 (when you have to mandatory start take your funds out).

I can see my post is probably confusing now. What I have been doing is IRA transfers from my TSP to my traditional IRA and then rolling over to a ROTH IRA...to managed the tax hit I do a little each year but I only wanted to do the least amount to avoid going into another tax bracket. Also the indexes funds in the TSP have a great management fee...at the time I wanted to be long the market so that was a great place to be....because the outside index funds you will pay between .1 to .5% more in management fees...plus there is a requirement not to trade more then two times and some have very high minimum balances. Now that the index EFTs have grown to a size where you are not trapped on the short side I have been using them. However the big appeal for me is being able to trade every dayWITH NO fees...I pay a ton offees and having an accountwhere I could trade like that and no fees was anice.Being able to trade onlytwice a year at some investment housesis notmy bag.

Now that I have turned bearish (and I am in the max tax bracket fora single guy) I do not want my funds anymore in index funds...so I took the remaining out in one lump....and will just suck the tax hit up in two years and not this year because I did it the first day I was eligible ( Jan 3rd) to do it for my 2006 tax return...but I think in the back of my mind I still wanted to be part of the govt system and that was my last link...now I am totally severed but yet I can not seem to get off this site...:?.

Sorry for the confusion...Grandma is you need guidance on your specific situation...please send me and e-mail...I will be happy to help you to understand the ends and out of making the best moves with the switch from TSP to IRA if you desire to do that in the future.

Have a great day!

MT

 

[Guest]

imported post

MarketTimer wrote:

Now that I have turned bearish

hahahahahahhahahahahhah, lolololololololol, heheheheeheheheheheheheeheh

 

[Guest]

imported post

I have to agree with you...this is a great market to go long in...if I was you I would stay long...

 

[Guest]

imported post

I transferred out of TSP, I don't play my TSP much, sell the rally, buy the rally........you're a very confusing dude. Does today feel like today?

 

[Mike]

imported post

Remember, the pullback wiped out 2 months' gains in 1 week.

The S&P has about 2% more to go before establishing a higher high... if it fails to get there, we're in for some troubled waters ahead. If it breaks through, we've got a new bull trend established.

There's a lot riding on the next three weeks.

 

[Spaf]

imported post

Mike wrote:

Remember, the pullback wiped out 2 months' gains in 1 week.

Pullback? I think we should call it: how about pitfall? Freefall? Sinkhole? The plunge? The flush?
What would you call it, now be nice!

Rgds Spaf

 

[Guest]

imported post

Technical name is: Head and shoulders market top reversal...as an added bonus we have a 3 Peaks and a Domed House pattern that is moving at or near point 27....that point is the hardest to call but I think we are there now....

 

[Spaf]

imported post

FOR SALE

Market Meter, slightly used, still under under Warranty. Guaranteed accurate!

 

[Spaf]

imported post

MarketTimer wrote:

Technical name is: Head and shoulders market top reversal...as an added bonus we have a 3 Peaks and a Domed House pattern that is moving at or near point 27....that point is the hardest to call but I think we are there now....

A head and shoulders market top reversal..Yea I saw one of the gymnist do that in the olympics. I got a 3 peaked domed house, thats where the satelite guy put the dish and the roof has leaked ever since.

 

[Mike]

imported post

MarketTimer wrote:

Technical name is: Head and shoulders market top reversal...as an added bonus we have a 3 Peaks and a Domed House pattern that is moving at or near point 27....that point is the hardest to call but I think we are there now....

For some reason, whenever someone says "head and shoulders", I immediately think of three things: the chart pattern, the shampoo, and dandruff. Is the market flaking? Or has its problem been cured? :l

This board is full of freakin' comedians. I gotta plunk in one funny line every third post or so just to keep myself somewhat respectable in this category. :shock:

Spaf - we could call it the "slam-bam, thank you ma'am" - a few nights of bliss (big gains) followed by abandonment issues (sudden loss). Now our lover,Ms. Profit, is backhoping to take advantage of us on the rebound. How many more days 'til investors find themselves waking upto an empty bed again? :shock:

 

[Dakota]

imported post

Mike wrote:

Remember, the pullback wiped out 2 months' gains in 1 week.

The S&P has about 2% more to go before establishing a higher high... if it fails to get there, we're in for some troubled waters ahead. If it breaks through, we've got a new bull trend established.

There's a lot riding on the next three weeks.

I'm Riding the bulls

 

[Spaf]

imported post

Dakota wrote:

Mike wrote:

Remember, the pullback wiped out 2 months' gains in 1 week.

The S&P has about 2% more to go before establishing a higher high... if it fails to get there, we're in for some troubled waters ahead. If it breaks through, we've got a new bull trend established.

There's a lot riding on the next three weeks.

I'm Riding the bulls

That wasen't a pullback! It was a flush! Wooosh.

To look at what happened, and maybe learn something (maybe) we need to go back the the last week in December. Using the S&P:

Monday27 Tuesday28 Wednesday29 Thursday30 Friday31
1204.92 1213.54 1213. 451213.55 1211.92

At the same time the CMF (money flow) indicator was decending in value.

Monday03 Tuesday04 Wednesday05
1202.08 1188.05 1183.74

So what I'll look for in the future would be something like the above to trigger a bail to the G-fund, assuming we get our bull market confirmation.

But as they say:
Technical analysis is the art of drawing a crooked line from an unproved assumption to a foregone conclusion.

Rgds, and be careful! Spaf

 

[teknobucks]

imported post

http://www.howestreet.com/story.php?ArticleId=938

 

[teknobucks]

imported post

http://www.321gold.com/editorials/daughty/daughty020305.html



Fount From Which Magical Money Appears As If By Magic Which Is Then Compounded By The Banks Via The Fraud of Fractional Banking (FFWMMAAIBMWITCBTBVTFOFB) .........LMAO!!!

 

[Spaf]

imported post

Yho Tom!
I'm getting a feeling that broker places are fighting for new customers! I left my investment company and moved funds to a broker (Scottrade) last week. And am much happier with the ETF ishares, value, timing, and buy/sell options, over the investment company of buy and hold.

I have no (zip) experience on shorting stocks. MT seems to know about it and maybe others do to. How about some education in this area?

Rgds :? Spaf

 

[teknobucks]

imported post

Spaf wrote:

Yho Tom!
I'm getting a feeling that broker places are fighting for new customers! I left my investment company and moved funds to a broker (Scottrade) last week. And am much happier with the ETF ishares, value, timing, and buy/sell options, over the investment company of buy and hold.

I have no (zip) experience on shorting stocks. MT seems to know about it and maybe others do to. How about some education in this area?

Rgds :? Spaf

Traders Glossary:

Links

1. http://www.investopedia.com/
2. http://www.pennycents.com/cmstest/new/displayer.php?h=pub_res_index&is_user=2908600232d8a2191fe6....
3. http://www.duke.edu/~charvey/Classes/wpg/glossary.htm


Shorting Stocks
Many times on the Fool boards I've seen references to `selling a stock short' or `taking a short position.' Will someone tell me plainly what shorting is?

An investor who sells stock short borrows shares from a brokerage house and sells them to another buyer. Proceeds from the sale go into the shorter's account. He must buy those shares back (cover) at some point in time and return them to the lender.

Thus, if you sell short 1000 shares of Gardner's Gondolas at $20 a share, your account gets credited with $20,000. If the boats start sinking---since David Gardner, founder and CEO of VENI, knows nothing about their design---and the stock follows suit, tumbling to new lows, then you will start thinking about "covering" your short there for a very nice profit. Here's the record of transactions if the stock falls to $8.

Borrowed and Sold Short 1000 shares at $20: +$20,000
Bought back and returned 1000 shares at $8: -$8,000
Profit: + $12,000
​

But what happens if as the stock is falling, Tom Gardner, boatsmen extraordinaire, takes over the company at his brother's behest, and the holes and leaks are covered. As the stock begins to takes off, from $14 to $19 to $26 to $37, you finally decide that you'd better swallow hard and close out the transaction. You do so, buying back shares of TOMY (new ticker symbol) at $37.

Here's the record of transaction:

Borrowed and sold short 1000 shares at $20: +$20,000
Bought back and returned 1000 shares at $37: -$37,000
Loss: -$17,000
​

Ouch. So you see, in the second scenario, when I, your nemesis, took over the company, you lost $17,000...which you'll have to come up with. There's the danger....you have to be able to buy back the shares that you initially borrowed and sold. Whether the price is higher or lower, you're going to need to buy back the shares at some point in time.

To learn more about short selling, try reading the following books: "Tools of the Bear: How Any Investor Can Make Money When Stocks Go Down" - Charles J. Caes; "Financial Shenanigans: How To Detect Accounting Gimmicks & Fraud" - Howard M. Shilit; "When Stocks Crash Nicely: The Finer Art of Short Selling" - Kathry F. Staley; "Selling Short: Risks, Rewards and Strategies for Short Selling Stocks, Options and Futures" - Joseph A. Walker. None of these are perfect in their coverage of short selling but each has its strengths.


Shorting, unlike puts, seems to have an unlimited downside potential, correct? That is, hypothetically, the stock can rise to infinity. Puts, besides the time limit, have a limited downside. Why then, for a short term short, would anyone short instead of purchasing puts?

Theoretically, yes. In reality, no. Because in our number system we count upwards and don't stop, we opine that because numbers go on forever, so can a stock price. But when we think about this objectively, it seems kind of silly, no? Obviously a stock price, which at SOME point reflects actual value in a business, cannot go on to infinity.

Yes, puts do have a limited downside. However, options have an expiration date, which means that they are "time-wasting assets". They also have a "strike price" which means that you need to pick a price and then have the stock below it on expiration date. Finally, you have to pay a premium for an option and if you are not "in the money" more than the premium, by expiration day, you still lose. So, with options, not only do you have to be worried about the direction of the stock, you need to be correct about the magnitude of the move and the time in which it will happen. And even then, even if you successfully manage all 3 of these things, you can still lose money if you don't cover the premium. Not very Foolish. With shorting, you only really need to be concerned about direction. As for limiting liability, you can do that yourself by putting in a buy stop at a price where the loss is "too much" for you.


What is short interest? Does it have anything to do with short attention spans?

Pardon? Short interest? Oh yes! Ahem, short interest is simply the total number of shares of a company that have been sold short. The Fool believes that the best shorts are those with low short interest. They present the maximum chance for price depreciation as few short sales have occurred, driving down the price. Also, low short interest stocks are less susceptible to short squeezes (see below). Short interest figures are available towards the end of each month in financial publications like Barron's and the Investor's Business Daily.

The significance of short interest is relative. If a company has 100 million shares outstanding and trades 6 million shares a day, a short interest of 3 million shares is probably not significant (depending on how many shares are closely held). But a short interest of 3 million for a company with 10 million shares outstanding trading only 100,000 shares a day is quite high.


I've heard the term 'days to cover' thrown around quite a bit. Does 'days to cover' have anything to do with short interest?

Yes, it does! Days to cover is a function of how many shares of a particular company have been sold short. It is calculated by dividing the number of shares sold short by the average daily trading volume.

Look at Ichabod's Noggins (Nasdaq:HEAD). One million shares of this issue have been sold short (we can find this number, called the short interest, in such publications as Barrons and the IBD). It has an average trading volume of 25,000. The days to cover is 1,000,000/25,000, or 40 days.

When you short a stock, you want the days to cover to be low, say around 7 days or so. This will make the shares less subject to a short squeeze, the nightmare of shorters in which someone starts buying up the shares and driving up the share price. This induces shorters to buy back their shares, which also drives up the price! A short days to cover means the short interest can be eliminated quickly, preventing a short squeeze from working very well.

Also, a lengthy days to cover means that many people have already sold short the stock, making a further decline less likely.


What effect does a large short coverage have (generally) on the stock`s price? Generally, heavy buying increases the price while selling decreases it. Assuming the stocks price has been steady, or climbing, and many shorters attempt to cover their losses, how will this affect the price?

What you are referring to, in investment parlance, is a "short squeeze." When a number of short sellers all try to "cover" their short at the same time, that does indeed drive the stock up.

Our approach when shorting is therefore to avoid in general stocks that already have a fairly hefty amount of existing short sales. We try to set ourselves up so we'll never get squeezed.

I'll point out that short squeezes can be the result of better than expected earnings or some other fundamental aspects of a company's operation. They can also be the result of direct manipulation. That is, profit-seeking individuals with large amounts of cash at their disposal can look on a large short position in a stock as an invitation to start buying, driving up the share prices, thus forcing short-sellers to cover. This in turn drives up the price, and before you know it, the share price has soared!


OK, I understand the potential benefits and risks of shorting, except for one thing. If the stock I've shorted pays a dividend, am I liable for that dividend?

Yes. If you are short as of the ex-dividend date, you are liable to pay the dividend to the person whose shares you have borrowed to make your short sale. I must say, however, that if you are correct in your judgment to sell the issue short, your profits achieved thereby will certainly outweigh the small dollar amount of the dividend payout.


What happens if the stock I've shorted splits?

MF Swagman replies:

Let's say we're speaking of a two-for-one split. In that case, all that happens is that you must cover your short position with twice as many shares as you opened it. If you shorted 100 shares, you must cover with 200. Don't forget, though, that the magnitude of your investment hasn't changed, for while you now have twice as many shares, each one is only worth half as much as before! So, while your original cost basis for the 100 shares may have $36, now, with 200 shares, it is only $18.


This is a very foolish question, I'm sure, but if I sell short I am essentially borrowing the shares from someone else through my broker. Assuming that the lender does NOT need the shares prematurely, what determines how long I can stay short? (pun intended) How long do I have before I am forced to cover my position? Is there any regulation? Is it simply dependent on when/if the broker needs them? Could I possibly stay short for an indefinite period?

As far as I know, there is no pre-determined limit to how long you can keep your short position open. Technically, you could be forced to cover at any time, but typically, having the shares you have borrowed called back is unusual.

 

[Guest]

imported post

Stops...

When I short I use 3% up (loss side)...on the downside I stop myself at 9% down (or money side) you will notice .... 9 out of 10 times a stock will bounce off the 10% down...then what do you do....shortit again and ride it down for 3% and stop out...at around 4% it will bounce again.......

That is about 4000 hours of research in that line...use it with care and love and appreciate...you will be banking dough here sooner then later with it...

:^

 

[Spaf]

imported post

Thanks Tekno and MT

It's getting close to the end of the week. So I'll start us a new thread tomorrow!

There was a lot of talk this week!

Hey! Talk is good!

Rgds, and have a great week! Spaf