After 300+ trades in 2011, only ended up 5% lol

[KTP]

What a lot of work for little return. I do admit I had fun with it though.

Across all of our taxable and tax exempt accounts we ended 2011 up 5.06%

To put this in perspective though, we moved a sizeable chunk of money at totally the wrong time in the summer, buying VXUS at $50 and VTI at $69. Those turned into losses really fast in August/Sept.

Some real blunder moves:

Buying Corning at $16, thinking it couldn't go lower, then buying a lot more at $14. Ended up with a nice tax loss there.

Selling Affy I bought at $6 for $5.25, then seeing it shoot past $7 a few weeks later. Another nice tax loss.

What turned our portfolio around? Shorting CRM, GMCR, AMZN, and NFLX. These shorts (which are now closed) covered the above losses and then some.

I don't know what I am going to do in 2012...maybe buy SPY, VXUS, and VTI on dips. I might buy back Corning after a few more days if it is still around $13 (have to wait or my tax loss will be a wash sale). I had 400 call contracts for Feb $27 microsoft purchased for only $0.37 each but sold them Tuesday for $0.82 Today they are trading at $1.22, so I missed out on $16,000. My timing skills suck. There is a very high chance Microsoft will be above $29 by Jan earnings, in which case I probably left about $100,000 on the table by selling early. Oh well...who would want to pay *that* much short term capital gains tax

[Slug]

My assessment after 2011 is that I own way to many individual stocks and that I should be moving more into vanilla ETF's. I'm still looking to buy on dips, but I'm going further away from short term timing plays.

[YLTL_Dan]

I've given up on day-trading or even attemping to time the market. I've had successes along the way (including turning 3k into 26k in 2000), but the failures outweigh them. From now on, I stick with regular investing through dollar cost averaging... and buying mostly index funds (75% of portfolio) with 10% in bonds and the remaining 15% in single stocks.

If you want to read about my failures with day-trading, check it out here: Too much Money? Try day trading!

[bjl584]

I'm fascinated with options trading, but I just don't have that level of expertise to put up real money on it. I'll stick to longer term investing for now.

[KTP]

I made a new years resolution to only do options trading in my IRA which I set up with $5000 at optionshouse. I almost got into serious trouble in my taxable account by having waaaay too many option spreads going on. At one point I was down $40,000 then near the end of the year made it all back plus $15,000 and went all cash. Way too much volatility for my stomach.

Right now I have purchased Vanguards Total World Market index (VT) with 25% of the cash and the rest I will wait and see what Europe does. I would also like to buy VXUS but have to wait a few weeks or it will trigger a wash sale. This just goes to show you that even buying an index fund can lose you a lot of cash (I took a $20,000 loss on VXUS in December). I do hope VT is considered substantially different from VXUS for wash sale purposes....

Edit: I will add that most of our money is in a 401K that is 50% bonds 50% stocks. It was up about 2% for the year, my options trading was up about 15% and they averaged together to around 5%.

I think the trading is very addicting and I am going to try and stop. I check the market about 20 times a day...no, I lying...more like 20 times an hour. I read so much material on every company...tons of research. It is totally not worth it even for a 15% return when the regular index funds and bonds can get you 2% even in a flat market. Once I have most of the cash in our taxable account averaged back into VT (or VXUS and VTI) I am going to try *really* hard to stop this obssessive behavior, except to trade a few pattern stocks (I think I will always buy Microsoft in the summer for $25 and sell it in the winter for $28. Just doing that one trade would net me more money than all my others).

[Shewillbemine]

Have you tried checking what your portfolio's 2011 performance would have been had you made zero moves?

[kv968]

Originally Posted by KTP

I think the trading is very addicting and I am going to try and stop. I check the market about 20 times a day...no, I lying...more like 20 times an hour. I read so much material on every company...tons of research.

I hear ya. Whenever I get a chance I pop up my streaming quotes and just take a look.

Is it just me or is it sometimes harmful to have too much information? With that I mean I can talk myself into or out of a trade in a minute. Don't get me wrong, I have price points and conditions set in advance, but when the time comes to pull the trigger I find thoughts and emotions sometimes creep in and make me second guess. I've gotten a lot better with putting them aside but I'd be lying if I said they still didn't pop up at times when I'm ready to hit that "trade" button

[KTP]

Originally Posted by Shewillbemine

Have you tried checking what your portfolio's 2011 performance would have been had you made zero moves?

It is hard to say, but it would not be more than what our 401K earned for all of 2011, which was around 2% (this is in 50% total stock market 50% total bond market). The big issue is we had a large chunk of cash to invest during the peak market during late spring (I didn't know it was at a peak at the time though). I bought VTI at $70 and VXUS at $50. Today I would be down more than 10% if I had not traded.

[KTP]

After selling everything yesterday our taxable account is now up 15% for 2012. Since I am happy with that return even for the whole year, I am putting everything in a 0.5% saving account and waiting for an opportunity to sell a huge cash secured put on SPY (thinking of something like selling a Jan 2013 $110 put for $15 (it is selling for only $6 right now with SPY trading at $129). I have grown fascinated with the idea of selling cash secured puts because if the shares are assigned to you, the put premium is added to the cost basis, meaning you defer tax.

If the Europe mess ends up not being messy, then I will have locked in a 15.5% gain for 2012, which isn't horrible.

[Slug]

Originally Posted by KTP

After selling everything yesterday our taxable account is now up 15% for 2012. Since I am happy with that return even for the whole year, I am putting everything in a 0.5% saving account and waiting for an opportunity to sell a huge cash secured put on SPY (thinking of something like selling a Jan 2013 $110 put for $15 (it is selling for only $6 right now with SPY trading at $129). I have grown fascinated with the idea of selling cash secured puts because if the shares are assigned to you, the put premium is added to the cost basis, meaning you defer tax.

If the Europe mess ends up not being messy, then I will have locked in a 15.5% gain for 2012, which isn't horrible.

Why totally dump? Couldn't you just set stop limits on them all? That way your winners could run and your downside is limited?

[KTP]

Originally Posted by Slug

Why totally dump? Couldn't you just set stop limits on them all? That way your winners could run and your downside is limited?

I have been burned several times on stop limits due to gap downs over weekends and such.

If you have some stock (say, maybe Carnival Cruise lines) and a big event happens, the stock can open the next day well below your stop limit and your protection will never get triggered.

I guess if one were invested just in an index, then it is unlikely to have a big gap down, but then again, if I were just trading index funds, I wouldn't be up 15% in 15 days.

Our 401K and IRAs are still in index funds and bond funds, so we have market exposure. And I do still have my mining stocks FCX and TC, along with a core of MSFT, NOK, AAPL, and GOOG.

[kv968]

Originally Posted by KTP

I have been burned several times on stop limits due to gap downs over weekends and such.

Instead of using stop LIMIT, just use a stop and that should trigger a sell in a gap down. Albeit it'll be sold at market value but at least you'll be out.

[kv968]

Originally Posted by KTP

After selling everything yesterday our taxable account is now up 15% for 2012. Since I am happy with that return even for the whole year, I am putting everything in a 0.5% saving account and waiting for an opportunity to sell a huge cash secured put on SPY (thinking of something like selling a Jan 2013 $110 put for $15 (it is selling for only $6 right now with SPY trading at $129). I have grown fascinated with the idea of selling cash secured puts because if the shares are assigned to you, the put premium is added to the cost basis, meaning you defer tax.

If the Europe mess ends up not being messy, then I will have locked in a 15.5% gain for 2012, which isn't horrible.

What do you think the SPY would have to get down to in order to get $15 for the $110 put? I would imagine that you'd have to be almost ATM in order to get that premium unless volatility really picks up.

[gambler2075]

Rough year for me... first down year in a while and it was a doozy. At least I can use the 3,000$ annual capital gains loss deduction for many years to come. LOL. Glad I paid my 200K$ tax bill (for 2010) and paid off my 200K$ of med school loans last year when I did.

Still, I'm back to speculating on the bios. We'll see.

g

[KTP]

Hey Gambler. It would have been a bad year for me too except for the Microsoft plays. Making over 100% gains on the microsoft options is the only trade that keeps me net positive for all my other blunders.

The wash sale rule kept me from buying back into Corning, which is a good thing as it is now trading around $12.62 (I was considering it in the 13s).

I am heavy into Nokia, trading it like it is an option (it is about that cheap!). It swings sometimes 10% week to week and I have probably traded 40,000 shares by now heh heh. When I look at my cost basis on the 8,000 shares I currently own, it says $2.45 and the stock has never traded below about $4.50.

My hope is that either the Lumia will do well or Microsoft will end up buying the smartphone division of Nokia. Book value on the stock is around $4.50, with 7 billion net cash on hand. Not a super duper risky play, and fun to trade for a 10% gain.

[gambler2075]

You know, this year has been ok so far, made 118K$ on the INSM trade (sold Jan 20) which was good as I predicted they would lift the clinical hold, but still, last year was painful...

Speculative bios trade very differently in bull vs bear markets...

g

[Slug]

I have to agree. I sold POZN for a decent gain when I got called out of the shares at 4. Still holding YMI and INCY playing both for janus kinase inhibitors. Up about 40% in each. Mostly sitting in cash though. Nothing I see undervalued right now. Might not be looking hard enough though. Lots of irons in the fire.

Glad you're back Gambler!

[Scanner]

That's okay, my AUMN (converted from ECU) tanked about 60%. . .it's up though the last month, rallying. . .I'm holding. Bought in at $17.00 and $8.00/share.

[KTP]

Are all of us crying a little bit because we sold our AFFY stock last year (I am). It hit $9 today

[disneysteve]

Originally Posted by KTP

Are all of us crying a little bit because we sold our AFFY stock last year (I am). It hit $9 today

Nope. I made a nice profit. Sure it could have been more but it also could have tanked. I'm okay with what I made on it.