I am adding some shares in TRF on today’s pull back. This ETF has had a big run and a day where it is down 7%+ might be a good time to add to a position. This is not a short term trade. I am buying for a long term portfolio.

Bob

There are many rules when it comes to trading.  One big one that I like to follow is

Don’t turn a trade into an investment and don’t turn an investment into a trade

Well… I broke my rule  a few days ago.  I had 1000 shares in AIB and planned to hold it for the long term.  My cost basis was around $3.45 and I like the assets that the bank has.  Well, while paying attention to short term news, I decided that a 40%+ gain was great and traded out of my position.

At this point AIB is at $6.87 and I am sick over not owning shares.  Remember, I traded out 3 days ago at $5.34.  I HATE MISSING A GAIN!!

My mistake in this case was that I took in all the short term news as if this position was a trade and I acted on that information.  Big mistake.  When you hold an ‘investment’ leave it at that.  If any news will not impact your shares over your long term time horizon, ignore it!  Because I took in some short term news on AIB and bailed (with a nice gain) I left more than $1,500 on the table.

Once again (this is for me, not you) “Don’t turn an investment into a trade and don’t turn a trade into an investment”

Man, it feels like oil has run to about where it should.  Why isn’t there a fight to the downside?  Too much money to be made on the upside?  Are we going to see $140 again?  I get the feel, a short of oil while it is in this $72 / barrel range could yield about 10% in a few weeks.  However, my recent experience is making me a bit gun shy when it comes to fighting the momentum of the market, or a name.  I dislike what high oil will do to the economy.  Well, at least the folks in Dubai will have more cash to build more continents.

The world of Dubai

When I was looking to get deeper into the banking sector a couple of months back, but didn’t want to take on all of the risk that came with the individual names, I bought an ETF as a proxy for the sector.  The ETF is XLF.

In my opinion, this is the best way to buy the banking sector with minimal risk.  Banks could still go bust.  The “too big to fail” mantra may begin falling on deaf ears if new capital is needed and unavailable in the open market.  Buying individual names such as Citi or Bank of America could be dicey.  The XLF tracks the good and the bad and you will profit as the sector moves up.

The XLF is up 73% in the past three months.

Bob

I took a pounding on a short of SYMX.  I got caught on the wrong side of a pump, sold my position and licked my wounds.  That sucked.

This is moving up very fast and might even be a buy at this point.  The stock was flying on no news.  It will likely move much higher on news.  The company is issuing press (joint venture news today).  They will also be presenting at a conference later in about a week.  I expect more news to be coming out between now and then.  My portfolio took a big hit with this one and I will have to work hard to bring my gains back.

Ouch.

I have no idea.  Typically, you can find the reason a stock is going through the roof. With the shares in AIB, I have NO idea.  I have liked this stock for a long time.  I first bought shares at around $7.  I added shares to my long term portfolio below $2.00 so my basis is around $3.47.

I bought some puts while the stock was up about 25% yesterday.  I felt the move was way overblown and was likely due to some buying action that forced the hand of the shorts.

Well, I gave up on my small put option trade a few minutes ago.  It is already looking like a mistake, but I am not so sure.  We might be up for a run about $5.60 today.  This thing was at $0.72 on 3/5/09.   It was at $2.74 as recently as 5/18/09.  Too far, too fast in my opinion.

I sold my puts ithe morning panic.  I mean, my morning panic.  I mean, the morning run up.  In any event, I don’t feel good about it.  I was afraid that this would continue to run and it appears I have already cost myself about $100 by making the silling early morning trade.  Folks don’t do that.  As I reflect during the writing of this post, it is more clear to me that this is settling in and would have allowed for an orderly exit of my contracts mid-morning today.  You can view my sad little losing trade in my trading log.

Have to set my goal and stick with it.  The fact that they were  option contracts with 17 days left in them made me bolt.

AIB Allied Irish Bank

Let me start by saying that I still love AIB as a stock.  Owns 20%+ of MTB, etc…

Scott and I had a chat regarding AIB as it was making a push through $5.00 a share. Listen below.
 

Download Pocast in MP3 Format

The stock has run up a huge amount today.  I am not sure what the news is.  This is an ADR, so there generally isn’t a lot out there.

What I do know is that 25% in a day for any real company is a bit too much, too quickly.  Especially if that follows a 100% gain in the past 4-5 weeks.

I just bought some put options on AIB with a strike price of $5 and an expiration in June (6/20).  The options closed yesterday at $1.50 per contract.  I like the run in AIB, but I would also expect a lot of profit taking with a 25% gain.  UNLESS there is big news in the offing.  You never know.  Isn’t that always the case?  You’ll see the trade in my “trading log”.

AIB Allied Irish Bank

Should you have your money in cash? Not according to a good friend of mine. He recommends putting your cash into a Vanguard Ginnie Mae Fund. Ginnie Mae funds are backed by the federal government. Ginnie Mae is a federal program designed to provide mortgage loans to consumers. The program guarantees the principal and interest will be paid. They guarantee it. The only way this fund goes down is if the government goes under. Since Congress can just decide to print more money, I doubt the government will go under. If it does, our problems are much bigger than the cash you put into a Ginnie Mae fund. Anyway, even in it’s worst years, it’s only been down a couple percent. Usually, it gets about a 4-5% return and is very steady. I just put most of my cash, left on the sidelines, into this fund. The symbol is GNMA VFIIX.  One reason I chose Vanguard is because of their fee structure. The other reason is because my friend told me to and since he told me to get out of the market last June (and saved me thousands of dollars), I trust him.

TRF (Templeton Russian and European Fund) is having another good day. This is a stock I really like for the next several years as it has really been knocked down hard. I did well with it when it had its run several years ago, was fortunate to get out towards the top and got back in a couple of months ago at the bottom. My position is up 177%. Many stocks are up. I believe this one has a fair amount of room to run. Just an opinion, but I’ve noticed their stock seems to be very connected to crude oil prices which seems to be a good thing lately.

Out of my remaining GLW calls.  Sold @ $2.20.  Entry point was $1.55 on 5/28/09.  Profit was +38% in 3 trading sessions.  I have got to start putting some real money at risk!