Practicing Patience

A member in the trading room today asked for a recipe for patience (tic I know). I've been thinking of making it a topic one day and this day is as good as any. No set formula have I found to work I must say and I am increasingly confident that patience is relative. We have sayings on the subject that patience if practiced will be rewarded, yet patience can be over used to the point of ruin, as well.

We all practice patience everyday. The dictionary uses several deifinitions that speak somewhat of suffering; for me however this works best: 3. quiet, steady perseverance; even-tempered care; diligence.

Every time we set a goal, we practice patience until we reach it; it's a required element; yet we seldom notice it until a decision needs to be made about the progress. So the longer the set goal, the less likely that we would focus on our required patience for it. Of course the shorter the goal's time frame, the more attention we are required to pay to it's progress, therefore, we notice the level of our patience more intensely. When we compact the time frame from years into minutes, the required focus itself tests our patience.

Take the oft asked question: Where do you want to be in 5 years? (sends shivers through my spine for reasons political) And let's take an obvious answer for this goal setting question: I want to be alive. You may laugh but I believe that is a goal we all share . OK so, do you patiently wait for that goal to be reached? Yes, and you also check in with your well being from time to time to make sure you reach that goal, and barring any unexpected circumstances the odds are in your favor. So what did you do to reach that goal in the last year. I bet you didn't fret over it daily or you'd be labeled a neurotic. I'd say the same should be practiced for shorter term goals after all you want to be alive next year, next month, next day and next hour and the next minute. Do you fret over it second by second? I think the answer is no, because it's a reasonable expectation.

Now look at it for trading. First of all, you should not enter a trade without a goal. Wait and see attitude does not serve for long in any circumstance. Second are you setting reasonable expectations? We can say "yes" if the stock you select has a track record for what you want. (For example, it's a reasonable expectation that GOOG will move 1+ points on a trade because that's how the stock moves historically.) Once the signal is given and you enter the trade, keep your goal in mind and check in to see if that stock is moving toward your goal. You have your stops set in case it is not, and the rest is up to circumstances beyond your control except for your patience.. yes the same one you use for long term outlook. Every moment you analyze, you make a decision and it tests your patience. Perhaps it also tests your confidence in yourself, but no more so then when you test your patience on your long term goal. It's the conception that is different because, anything reduced to a smaller area is under more pressure; that's just physics.

Therefore the question becomes not whether we are patient enough, nor is the answer that we need more of it, but whether we have a reasonable expectations in the goals we have set. If we do our homework before setting any goal, we should be able to rest easy enough short or long term and it's our view that needs to be adjusted, remembering that patience is tied to emotion more than to logic.

So how or where do we draw the line and how do we know when we have used enough patience? Perhaps a topic for another day and maybe less to do with reasonable expectations and more to do with recognizing reality.

Moving with the Rhythm

I just finished a Lynch Bages vertical wine tasting dinner with long time friends. We opened '82, '85, '86, '88, '89 vintages; not one to be said a bad one all from our respective cellars. Not one palate in total agreement and not one palate off. Interesting that this was the least consensus we've had in number of years. I'm glad I am not a big collector of these wines, but I also know from experience that they were great at one time. As I oft said, everything moves in rhythm and none of these wines were in rhythm. Not one of us said, we wish we had more of this or that vintage yet not one of these vintages were bad and not one stood out as memorable. Keep in mind that these wines have been hot on the auction block of late.

I've noticed the same about some stocks of late. RIMM, GOOG, BIDU the darlings of the past yet not one in perfect symmetry or rhythm. At one time you could pick GOOG and know that BIDU would follow, respectively you could pick RIMM and count on 2-5 points easy. Yet lately, GOOG has been an sleeper, RIMM has traded sideways most often than not, and we are left with BIDU and the China bubble burst; or so it seems. So what to make of it? Not one thing in common yet so much is. Everything has it's up time and everything has it's downtime. The stemmy, almost vegetal, hard quality of most of the wines tonight reminds us not of great luscious fruit of the past we so associated with Lynch Bages. Will they come around in the next decade? Doubt it, they've had their time and yet we shall see in 5 years, after all this is Pauillac and not a bad bottle in the 5 vintages; but as many said around the table sell sell sell, while others disappointed said drink them up, not one said buy. A lot of stocks on a downturn have the same nay and glee sayers.. nay=don't buy; glee=glad I don't own it.. but who's to say what will be in 5 years. Often I've seen wines turn and evolve, like stocks when most don't buy is the signal to buy; and in 5 years one might say: "wish I had more of that vintage".

As to the wine of the evening, my vote goes to the Paul Bara 1998 vintage Brut Champagne, beautiful mousse, green apples galore, full mouth fill and still lingers in memory which makes it a sure bet for me.

Happy Trading Everyone.

A Great Day

It was a great day. 22 point call GOOG long, later 11 point call GOOG short could do a lot worse and yet there was more. Dow went up then down, gloom and doomers were talking much today... recession coming.. we're already there.. watch out it's worse than you think. I am amazed at how much they continue to point to how bad it is and wonder if they really live that way. I can't. I'd be depressed and my calls would reflect it as would my results.

You see, I don't see how success can be born out of negative thinking. Negative thinking by it's nature demands failure. Therefore I don't think that the negative talkers you hear in the media are truly negative thinkers. They must think positively about themselves, the effect they produce and the positive ratings they'll receive from the listening public; as well as the money they produce for themselves and their company. Negativity sells. We all buy into that one time or another and some buy into it all the time. Those who do, are the true negative thinkers and in fact, I am sure that those that truly think so negatively are feeling depressed because they live in constant fear.

You hear the voices all the time, whether within or without: "I always buy high, sell low" ; "those poor suckers that bought high"; "housing market bubble will burst"; "worse recession ever"; "worst deficit spending in history" etc. etc. etc. What I find interesting mostly is that seldom do the people making such statements actually state any facts to support their statements. They usually talk in the immediate sense of time, not taking history into account; and it wouldn't bother me so much accept for the fact that they do effect others. No thought is without energy. No thought is without agreement from one place or another and the more agreement to the thought the more likely that it will become prophecy. As I said in the room today: You beat a horse long enough it'll die.

Unfortunately, during the best economic conditions that we've had historically (look it up .. long term please) we are hearing the most nay sayers. The reasons are many and philosophically I will dwell into it as we progress on this site. For today however, consider that the lines of communication is also many; our ability to be heard and to spread the word is far more profound than ever before and all chatter influences the ethos.

So then you wonder, why did you title this article today "A Great Day"? Well, look at my first paragraph, for one. But truly, this great day was really brought on by the news that my son got hired today by Image Movers Digital,Inc., just 2 months after receiving his degree in a highly competitive field of digital arts.

Of course,I am proud of him as his Mom but I am especially proud of him because he overcame a horrific experience that could have turned him into a very negative person about life and society. Eighteen months ago, as he was leaving work late that night, he was attacked by 3 thugs, his skull bashed in and was left to die. Angels aligned by us that night to have everything go right and for the next 4 days of surgery and post surgery we were surrounded in love. He survived, thank God!

Over the next few months, my son took on the challenge of recovery without complaint and as soon as he could he re-enterd his classes at EXpressions College continuing his education in digital arts. Since that experience, he has shown no bitterness and has continued to live positively and rather than dwell on the negative possibilities, he looked forward to what he wanted to do. He could have sunken into fear, of which I'm sure he still has some to overcome, but as you see he did not because success does not get born out of fear. He is living proof of that. Congratulations, my son, well done!

ImageMovers Digital : http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/14/BU6BTB6GI.DTL&feed=rss.business