First of all, I would like to wish all of you a happy and prosperous 2009.
As a long time investor, I find it useful take a step back at the the end of the year and reflect on what I have done during the year, learn from right and the wrong things I’ve done, and make changes in my strategy in the new year.
I think most regulars on StockTock, like me, are self-taught investors and are not privileged traders with some inside info on Wall Street. Because of this, I had the personal gratification that my read on the market was more on the right side than on the wrong side. However, I failed myself in sticking to a sound money management philosophy. Even though I was well disciplined for a vast majority of my trades, I have had just three or four too many and very costly lapses. Consequently, I ended the year with a big loss. I don’t like to lose money, but what I absolutely don’t like is losing confidence, which I still have aplenty.
That being said, I would like to recap my best and worst calls as a regular poster on stocktock. This is to help you give some perspective and help you do your own objective analysis.
My worst read on the market has to be a continued meltdown till the end of the year, which I stated in: Funnymetals Say Meltdown Ahead (Dec 13), and T-Bonds to Lead Stocks Down, Again? (Nov 25). I have usually interpreted a steep fall in treasury yields in short periods as panic flight to safety, and a leading indicator for stocks. This indicator helped me make a ton of money in the past. Reading Fed’s manipulation of treasuries since about Nov 18 also as a panic flight to quality was a big misread on my part. With that, I went nuclear short around Nov 19. By the time I realized it, I had some serious damage done to my portfolio. This is the worst part.
The best part has more to do with intellectual gratification (see Is the $700 billion Bailout… , and Get Ready for Jaw Dropping Actions..) than anything else. On Sept 10th or so I posted an intraday reply in trading blow which reads something like:
With this LEH bailout news I think We will see a major Crash next week. If not next week, the week of options expiry in October.
Point swings/trading range in S&P this week:
Monday: 33 points (37 points with the gap)
Tuesday: 44 points (45 points with the gap)
Wednesday: 22 points
Thursday: 38 pointsPrice swings like this happen just before a major move. I don’t think that move is up.
I was not ready to be fooled by vicious 1000 point recovery in 3 hours trading which erased 3-days of steep losses on Sept 18 and 19.
As much as I would like to take the “October” effect in the markets with a grain of salt, I cannot ignore the fact that most severe corrections happened in October. My bias is that these markets have still more downside. This hunch is based on the stink factor, not any charts. Take it for what its worth. I will play mostly on the downside till the election.
I put my money where my mouth is. Only thing that beats my making money, followed by some intellectual gratification is if could help someone else make money.
On the flip side, I hate for anybody to lose money by blindly following me for two important reasons: a) I am not a professional or have no formal training and/or certification as an investment adviser; b) I can be wrong just as many times as I am right. The to success key is to incorporate the opinions into your own trading and follow a sound money management strategy. Trust me on this and take my advice – I don’t use it. 
Mohan,
You posts are full of unbiased and often insightful analysis. I have learnt more from reading your posts and the likes of the many Gurus of this web site. Please take heart in the fact that what you guys are doing here is worth more than any advise I have received from a professional. I wish you, everyone and most of all the stocktock community a very happy and prosperous 2009.
I hope the likes of you and Idan and Craig and Schweitzer135 and everybody ( too many names to write) else who posts great stuff here for everybody’s benefit get all the best life has to offer.
Ciao
AL
Mohan,
Even Jesus was not able to satisfy everybody. I always read you comments and they were very helpful for my trading decisions.
Regarding your losses, who won in this crazy market? Even some of the “house” members (Bear Sterns and Lehman) do not exist any more!!! Congratulations and thanks for the hard work
well Mohan this Aussie never skips your thoughtful pieces – i look forward to many more
happy new one, and may your successes grow with your insights
cheers
brr
As a newbie trader (1 year) in extreme learning mode, I want to thank you Mohan, and so many others who contribute analysis on this site. I do read nearly every post all of you write, and I regularly follow the intraday commentary. What a tremendous opportunity all of you are giving to people like me who have so much to learn. You allow me to train in the trenches. I ended up the year with 41% profit on my capital, much of it due to the excellent input and analysis provided on this site. Thank you, and happy new year to all.
Mohan,
It’s a New Year. Two thoughts.
1. I think most of us here know that we, and only we, are responsible for our own trading actions. In other words, not you. So don’t you spend one second worrying about us.
2. I once heard that one of the hallmarks of true love is honesty. Not being right – being honest. I always read, and appreciate, your posts because I think they are honest. Not always right – but honest and in the land of Bernie Madoff, Jim Cramer, etc. etc. etc. I value, and thank you for, that honesty.
I am sorry to hear that you took some lumps at year end and hope that 2009 brings you every success.
Also, if anyone has yet to take a look at 1929 – 1932 dow chart, there were 6 bear rallies from peak to trough and people got severely whipsawed then, too. The biggest rally was the first after the crash – from November 1929 to June 1930. Most economists were proclaiming that the worst was over and most bears took serious lumps and couldn’t believe the stability they were seeing. So all of us with a bearish bias are in some grand historical company.
Best regards
Ah Mohan Mohan Mohan,
Did you know that your name backwards, “Nahom” is the name of the ancient place where Ishmael was laid to rest. Ishmael was known for being a “righteous friend”. You are the same to StockTock.
My father once told me that you only lose in life on two occasions. 1) When you lose your temper, and 2) when you lose your money and learn nothing. 2009 is going to be a profitable year but will require patience and collective interpretation of fundamentals, government intervention and Technical Analysis.
Best wishes on this New Years Day to you and all the StockTock participants that are moving in the direction of self-education and contribution to others.
The anagram for Mohan is “no ham.” I am no ham, but I am not Jewish, I am a Hindu.
Mohan is pure east-Indian. If you strike out the ‘n’ and add “wk,” I am a Mohawk – American Indian. Also, for some reason when I give my name out on the phone, some pick it up as Mohammad. No idea what makes them assume “mmad” comes automatically after “Moha.”
Some pickup my name on the phone as “Mahan,” which I don’t mind. It means the Great.
Seriously, just to let everyone know –
If I made a ton of money, all you would hear from me say is – I did well. The reason I just presented my bad performance this year is to be upfront with you. As I said, I haven’t lost confidence. I always change my strategy/tactics and eventually prevail. BTW, few people can boast a 60+% return over a 10 year period. I am one of them. Also, FYI, the biggest of my gains come from playing long in a down market (2000-2004) when I played the contrarian.
What the heck – let me add this word play also:
Hi, I am Mohan, I am no ham, but I am not Jewish. I am a Hindu and I mean no harm.
Mohan,
Thanks for the reflections.
The market is always a humbling mechanism, and in 2008 it humbled a wide array of investors and traders, retail and professional alike. Plenty of smart and successful money managers blew up last year, and will not be around this year, at least not with the same force.
Those that made it through to 2009 are arguably the best and the brightest for navigating the turbulence of the past year. It is humbling to think that those who had the wisdom and cunning to survive 2008, are the very same traders and investors that will occupy the markets with us in 2009, all of us competing for success.
To that end, I enjoy reading your postings as they provide thoughtful, rigorous, and uncommon perspective on market action and direction. They are an edge. Thank you again for your contributions of time, effort, and analysis that have maintained the vibrancy of this site.
Best Wishes in the New Year to you and yours.