The hedge fund is off and running. I’ll write up more analysis and details later but here are most of the trades I’ve put on so far this morning.
I’ve bought some common and/or call options (in alphabetical order):
I’ve shorted and/or bought some put options on (in alphabetical order):
Sorry for the lack of posts the past week, but one more thing to note is that I’ve had a lot on my plate not only with the hedge fund launch, but my littlest daughter Amaris, who is one of the happiest children on the planet but has Trisomy 13, a trachea tube to breath out of and a gastro tube to eat out of, is in the hospital in Albuquerque. Last Wednesday night, I was “on Amaris duty” and I didn’t get much sleep because her oxygen levels weren’t quite as high as we normally like and I didn’t like the way she was breathing in her sleep. At 4:30am, I woke up my wife and they were soon on their way to the hospital. Amaris is stable but needs to remain in the hospital for now. I spent New Year’s Eve with Amaris at the hospital but I’m back at the office for the next three days.
Finally, here’s an oldie but goodie article that I published on Marketwatch on the day I officially launched TradingWithCody.com almost eight years ago. So much of it applies today, yes?
Detailed trading strategies for this market
By Cody Willard
I’ve got adrenalin coursing through my veins as I listen to a little bit of Mozart and log into my ThinkorSwim.com account. I am ready to start trading for the first time since October 2007, when I closed my hedge fund to become a TV news anchor. Before we get into feeding this long slumbering trading addiction of mine, let’s talk a little bit about my approach and what I’m looking to accomplish.
First off, I’m going to start slow. Despite the rush I feel, I know that emotions and feelings are indeed the enemy of the trader and investor. You always want to buy when it feels like the world is going to end and you always want to sell when it feels like the boom will last forever. And I’ll tell you this — when I first started my tech hedge fund back as a 75% crash in the Nasdaq of October 2002, the markets were routinely down 3% in a single day’s action, and the market was down some 40% in the twelve months before I launched alone — it “felt” awful. But Jim Cramer sat me down the morning before I started trading that day, and he said, “Cody, go slow at first. Take your time and get into your groove over time.”
And that’s right. Here today, I haven’t traded in years and that’s why I’m particularly pumped up and ready to hit it hard right now…but I don’t want to give into those emotions. I’ll likely put about 10-20% of the capital I’ll eventually want in the stock market to work this week. No more, because this isn’t about today, or tomorrow, next week, or even next year. It’s about protecting and growing my money over the next thirty to forty years. It’s about the next ten thousand days, not the next ten days, if you see what I mean.
As long-time readers know, I will occasionally cite a very short-term trading opportunity, such as when I wrote about how slightly out-of-the-money Google calls were my “favorite trade into year-end” last year, or I’ll even take an occasional flyer on a stock or two as they prepare to report their quarterly earnings if I feel I have an advantage and the opportunity is there. But I’m not a “day-trader” by any stretch of the imagination.
And I’m not usually looking to catch a 2% intraday move or a quarter here and a nickel there. My biggest successes as a hedge fund manager were betting big using both common stock and call options on Google since its IPO, Apple since $7 per share, F5 since $20 per share and a few others like that. I try to augment my “Revolution Investing” and “Revolutionomics” analysis which are all about finding such revolutionary companies long before they are discovered by Wall Street with an aggressive trading approach.
I’ll sometimes create “positive gamma” by scaling into short common stock against what were once out-of-the-money option calls after the calls have gotten to be in the money, thereby allowing myself to continue to catch upside while limiting my downside.
I’m going to buy a call options in a couple old school tech names and I’m going to be nibbling and starting to build a common stock position in a few of my favorite undiscovered tech names. I’m fighting the impulse to trade more. Now that I’ve started, I want more. I want to be more aggressive. I want to buy calls, not common! But those emotions and wants are the enemy that I’ll continually remind you to fight. It’s not about wants, it’s not about trying to impress you readers, it’s not about trying to catch a lucky move in the next few days (though I wouldn’t complain about catching a lucky move…ever!). Remind yourself that it’s about the next 10,000 days (thirty years) and not the next tick or the next day. I will likely limit myself to but one more purchase today…full details in next post. Stay cool!
Cody back in real-time January 2019. Happy New Year. And here’s to the next 10,000 days!
Disclosure: At the time of publication, the firm in which Willard is a partner had positions inAAPL
AMZN, GOOG, PANW, SEDG, SNAP, SQ VZ, BOX, FORM, M and MTN, although positions can change at any time and without notice.