Because I haven't done a list since my early days of xanga and I was in the mood....

 

Richest 10

1. San Jose, $76.6K

2. San Francisco, $69.9K

3. Washington, DC, $63.1K

4. Seattle, $61.0K

5. San Diego, $60.8K

6. Charlotte, $50.2K

7. Austin, $49.9K

8. NYC, $49.5K

9. Boston, $49.1K

10. Fort Worth, $47.4K

 

 

Poorest 10

1. Detroit, $25.2K

2. Philadelphia, $34.2K

3. Memphis, $34.5K

4. Baltimore, $38.7K

5. Indianapolis, $39.0K

6. Columbus, $40.5K

7. Dallas, $40.6K

8. El Paso, $40.6K

9. San Antonio, $42.6K

10. Houston, $42.9K

 

Article Link: Link

 

 

Cali had a serious heat wave this past Friday and Saturday.

Friday morning I had the windows open with the whole house fan going overnight and it was a bit chilly.  I was in the side of the house away from the sun on the computer for a couple of hours looking at the market, then I went back to a room on the sunny side of the house. As soon as I entered the room, it felt like I had left a heater running. It felt about 10+ degrees warmer than the computer room....I kid you not! I was a bit confused why the room was so hot, then I went towards the open window and felt blast heat coming in. I haven't felt such high intensity heat since being in Arizona. It's similar to turning your oven on full, that putting a fan there to blow out the hot air.

I shut the window, went back to the room that was in the shade, and now noticed the air coming through the window was heating up as well, so I shut all the windows and turned on the AC. Friday and Saturday were scorchers....felt like walking inside a giant oven outside.

The only saving grace was that it was low humidity and the temps dropped in the evening- at least it did in my area.

 

Cool vids I discovered this weekend:

 

Chalk Wars:

 

 

 

 Western Parody Version of Gangnam Style - "Gunman Style"

 Best unique parody I've seen to date.

 

 

 

 

 

Summing the 1st two weeks in September would be an A+ in planning but a D+ in execution.

 

ES has gone beyond my predicted target prices and an incredibly strong bullish move that I saw coming back in August. My only surprise is that it reached the targets as fast as it did.

It basically moved 74+ points in that time- an enormous move of which I think I should have been able to capture 70% of it IF I executed properly. Unfortunately my execution was anything but "proper".

Instead of a raising of the bar in booking record profit, I'm now in the hole fighting with a short position I took on too early.

When I think of the big picture it feels incredulous how I was Bullish but wind up short fighting the main trend and missed the entire current runs.

Here's how it went down:

 

Last week the market went into a buy zone that I anticipated, but I decided I was going to "finesse" the entry because most of the summer I go in too early and got hit with strong counter trend moves that threw my plans off. Well, thanks to a missed chart calculation on my part I mapped out the wrong "ideal" entry area and found myself watching from the sidelines as it took off like a rocket. Losing profit you know you "should" have had hurts almost as much as losing actual money. That was the first costly error.

But I didn't fret much because I knew I should have another chance to enter soon and I figure I'd make up for it this time around. So ES starts drifting back down this week as expected and once again, I map out the ideal entry point. Then my GENIUS mind thinks "Hmmm, you know, why not go short now and make some extra profit as it heads to the "ideal" entry point, then you can reverse to long".

At first the plan works like a charm and I'm in profits and waiting for the move to complete. Then it slowly stops moving down and goes flat. I don't think much of it, feeling confident my target price level will be reached. The market had other ideas however- initiated another zoom up so I again missed the long entry and am now in with the pack of Bears who are being burned at the stake. Bears who got in at the 1380's/1390's, and now all crying uncle or getting margin calls as ES zooms to the 1440's and beyond. Wonderful. Short where I planned to be long.

So yeah, I managed to take a good plan and bungle it but good so far.

The reason the grade isn't a solid F is that I've been managing my CRM options much better - making use of CRM's move up with buying/selling puts and calls to take advantage of premiums.

Okay, so I took a deep breath regarding my ES mistakes but know that the trade isn't lost yet. It's like halftime in the lockers after the opponent has run up the points. I picked up a few things from my earlier challenges this summer which I think has prepared me to step up my game when the heat is on. One key thing is to treat each successive trade independently and not let PnL affect my actions. A big summer problem was exiting too soon after break even since I was relieved of recouping the losses and missed out on addition profit, which makes for sad performance.

I also figured out a few more things to prevent repeating the same mistake- one of them being NOT to fade against the main trend unless I'm using tight stops. Another is the path the market takes to reach a certain price has more of a random element to it so I need to monitor it more closely to catch any changes.

So I'm down but not out. My challenge now is to bring up the grade of this trade to at least a B or better going forward.

 

 

 

 

 

Stocktwits is essentially "Twitter" for stock traders where people post messages related to trading and the market.

I previously mentioned one annoyance I have with using it - seeing people make absolute calls as if they have certain knowledge. That's when they warn someone not to buy or sell with an air of absolute certainty.

A higher level of annoyance occurs when these folks who make absolute calls let everyone know when they made a correct call, but go silent or just ignore past calls when they are wrong. I guess you can chalk this up to human ego but since tweets can't be erased, it's easy to see if someone is being honest about their calls, or just playing games. Maybe people want to be able to brag or are trying to attract followers but only posting one's hits and not misses doesn't really help others or themselves in reality.

The HIGHEST level of annoyance for me is when you have someone taking a leadership role in advising others what to do with absolute calls, insult those taking the other side calling them things like "The Herd", and post these beliefs constantly throughout the day on a regular basis. They post numerous posts patting themselves on the back if right, but if a "perfect just about guaranteed prediction" doesn't pan out, they mention NOTHING about it and just continue on without admitting any mistake like they are still some flawless source of information.

 

 

 

The annoyance level of this type of person inspires me to take action, which led to this post.

 

So there's this person on Stocktwits that appears to have appointed himself as a "Market Guru" since from time to time throughout the day he'll post dos and don'ts in how to trade/invest like you would see if you got a book on "Investing Advice for Beginners".  Personally, I think posting these tidbits of wisdom isn't really necessary as you would expect people using Stocktwits would already have this knowledge, but I'm seeing there are more than a few folks that are new to trading/investing that seem to like it.

The problem is this guy started making Bearish calls on future index ES since mid July as in warning folks not to go long as it was "high risk", and that anyone long would soon be sorry. I don't mind people having opinions, but he's taking it a step higher by stating his opinions to others as if they are facts that should be heeded and those with counter opinions just don't get it.

Meanwhile, ES slowly starts drifting higher on a regular basis. Days and weeks go by and ES continues to move higher while he continues to frequently post warnings of "imminent demise" for longs with no change in his opinion. Eventually ES is over 20 points higher than his first bearish call, then over 30, 40, 50, and so on. The weeks roll by, and ES continues to move higher with this guy still issuing dire Bear warnings...so if anyone is listening to him and following his advice they are missing a great Bull rally or worse, getting killed by shorting.

At around 40+ points I made a general post about it being a good idea to reconsider calls made if the market moves far enough away to show you "might" be mistaken, and that being too early is really the same as being wrong. It had no effect as he continued to warn away. I guess he didn't pick up on it.

So this goes on past July and through August and we get to September and he's still warning people and criticizing Bulls. Then this month we experience two mega rallies in ES which moves it over 100 points past his original Bearish call. Surely at this point I'm expecting to see him to admit he made a mistake or at least stop posting warnings- but no, he follows the last rally with another post warning about the top being in.

 

At that point I've had enough and sent a board message asking him if he was aware that he's been "warning" everyone about an "imminent" Bear market collapse for well over 100 ES points.

His response was that he's a long term trader so his calls are based over the long haul, like as long as a year from now. If that were true, I wouldn't have an issue with it, but that wasn't the case. His posts didn't suggest a far out time, but something much sooner. Thanks to the "magic" of past tweets being saved by StockTwits - I pointed out to him two specific posts he made warning Bulls it would go badly for them in August and that a Bull trap was set.

His response was now ambivalence as in "Well you can't be right all the time."

My point wasn't that he made a mistake, but that he was clearly wrong and never acknowledged it in his tweets and continued to post warnings as usual no matter how far away ES moved against his call.

I mentioned that anyone who is a short term trader following his advice would have missed the entire summer rallies, so being transparent, as in posting that the call was short term or long term along with the cancellation of the short term call would likely be helpful.

At this he apparently got bent out of shape, claimed he has been honest, asked me if I wanted him to quit posting, then "threatened" to stop posting altogether. A very surprising reaction from just one questioned call.

 

One of his "devoted followers" saw his threat to quit and suggested he "block me" since my comments had so disturbed him, and that's what he decided to do- I was accused of "badgering" him by his follower.

"Blocking" means he can't see my messages anymore but I can still see his posts and comment on them if I wish, so I can still call him out for all to see.

 

The take-away I got from all this is the following:

1) This guy has a very thin skin not to be able to handle a little criticism, not what you would expect from someone trying to be a Market Guru.

2) He was in fact warning people in the short term not to be long in ES, then tried to hide that by saying he has a long term outlook. He doesn't want to admit to making bad calls and gets angered when it's bought to his attention.

3) Rather than be open to discussion, when feeling threatened, he's the "take his marbles and go home" type of guy.

4) Some of his newbie followers would rather rally to his defense than think about my POV even though it's meant to protect new folks like them in particular. I wonder how they are making out following his "expert" advice...

 

The signs were clearly there that his bear call was wrong but he failed to see it. He relied heavily on technical and sentiment indicators noting whether the market is Bullish or Bearish. The thing is, if it were that simple as to just check the main technical indicators to make a good decision, trading would be so simple you could create a program to do it automatically.

The fact that seems to escape him and so many others is that a market can continue to rise higher despite Bearish indicators ringing alarms, and vice versa. More is needed than just technical signals, but charts show the most reliable information. "Smart Money" usually positions itself in the market first before any major move and good chart detective work can reveal that.

Looking at the ES chart, it was clear ES was headed higher once the resistance of 1400 was broken through.

Technical indicators are accurate for the "long term" and not short term- so if he is a long term investor as he stated, he really shouldn't be making short term calls, especially if he's not willing to own up to them when he's wrong. No shame in being wrong as long as you're upfront. Taking credit for just being right while acting as if one has amnesia when wrong removes true credibility.

 

 

 

 

 

 

Apple released their iPhone 5 specs today to much fanfare. It's stock price did a few fake out moves and ended the day up about 1.4% to the chagrin of the Bears.

 

Apple vs Samsung

 

I want to start out saying I don't have a dog in the fight as I own neither an Apple or Samsung/Android phone. Yeah,...I'm due for an upgrade once I can get a good deal..haha!

 

I know plenty of people are mad at Apple for suing Samsung for copyright infringement. Most people are just angry because the price of Samsung "Apple-like" phones will likely be going up or in a worst case scenario, be discontinued. They believe Apple is making it harder for companies to innovate, but in reality, the opposite is true.

I hate large corporate bullying as much as anyone, but looking at the facts, IMO, Apple is justified in defending their territory. If people were business owners themselves, I think they'd understand better about protecting their intellectual property rights which affect their bottom line profits.

A picture is worth 1000 words, so here's one in place of many words of reasoning:

 

 

For those who want the intricate details of the lawsuit and what Samsung was found guilty of: Link

A common argument I see online is that Apple didn't invent anything new about the iPhone, so they shouldn't be able to sue. The key thing is "design" is also an entity that can be copyrighted, and you don't need to "invent" something new. That would be like saying since musical notes already exist, no one should be able to copyright a song.

 

Many people say, what's the big deal? The big deal is Samsung is profiting off the enormous engineering work done by Apple in creating a new phone design. If you were to design and market a product, you wouldn't want others copying you and diluting your product brand and profits.

 

Rather than stifle innovation, it will encourage it by forcing Samsung and others not to copy but to beat apple with an original design. All these other phone makers were in business for years but it took newcomer Apple to raise the bar to new levels. Apple should receive the rewards from that and be protected from clones.

 

 

The good news is the slow moving, low energy market of August is finally showing signs of life with a big jump that happened Thursday:

 

 

The not so good news is that the jump occurred without me having any ES contracts to take advantage of it.

The initial jump happened before the market opened, then once the opening bell rang the market was off to the races and never looked back.

 

What bites is I anticipated a big up move was coming, but made it a point to wait for more confirmation. Just about the entire year I've been paying the price for jumping into a position too soon, and the ONE time I decide to hold off and show proper restraint, the market thumbs its nose at me as if to say "You snooze, you lose!" It was a nice 20 point jump from the 10 points it had already drifted up during the prior evening.

I'm still going over my analysis and trying to decide if there was a confirming signal that I missed. On the other hand, waiting for the pros to make the first move to determine the trend is the safest thing to do. I know of traders who were short in the market and are now getting burned. I'd rather miss a big move than be on the wrong side of it- I've already had that happen more than enough times.

I had some small positive trades this week, but no big kahuna moves like what happened Thursday. At least my CRM option spread positions are faring okay.

The NASDAQ is at highs not seen since 2000, so the markets overall are doing well this year.

 

 

 

After July's challenges, I was hoping to apply what I learned for better timing and market sync.

 

 

The results speak for themselves. I think the key change that got the biggest boost in performance was being patient and slow to allocate into a position. Even though I was still initiating positions a bit early, it wasn't that far from the best entry. The other big factor was I started light so I was able to add to my position at or near the best points.

What makes me feel especially good about this month is that volatility and movement really flattened out - it's as if the market markers went on vacation. That made it hard to catch any big moves. This meant the timing had to be even better to catch the smaller moves. When market action returns, my performance should scale higher as well.

 

August Performance vs Market Indices:

 

 

A much nicer risk/reward curve than what I obtained last month.

Most traders hate down months but those are the times you can learn the most. August gains are a direct result of having to slog through the heavy battles of July.

 

 

Market activity was muted throughout the week since the Fed Chairman was scheduled to speak Friday and most were expecting to hear if another QE (Qualitative Easing) was in the works or not.

Smaller ranges bring on the challenge of needing more timing precision in selecting exit targets. I missed one profit opportunity by expecting a bigger move while missing where I should have exited. However, I recovered and exited at the next best opportunity when the time came, although that time was in the wee hours of the morning....yawn.

Timing was better after that, but as Friday approached, the smaller ranges and current market area posed a problem with my trading style. We're at a point of inflection where the market can continue up to go higher or head back down, so there's not a clear dominant trend at this time, which means I have to wait if I want to avoid higher risk....especially ahead of the Fed Meeting.

Friday did have some fireworks with the market moving strongly in both directions as the market waited for, then interpreted the Fed Chairman's words, but I was just a spectator as I didn't see any decent entries.

I didn't actualize as much profit as I would have liked for the week, but my options plays in CRM are moving in the right direction and added paper value. I think I'm starting to figure out how to take better advantage of smaller range days too strictly as day trades.

August trading results coming up....

 

I was talking to someone the other day about the RNC convention - they brought it up, not me. Listening to them speak their beliefs was amazing. Apparently all the current economic problems in America can be attributed to just one person, the prez of the US, and maybe a couple of his dem friends for good measure.

It was like listening to a memorized list of Fox News talking points. Someone walked by and decided to join the conversation and pretty much agreed with everything the other person was saying.

I'm certainly not a fan of the prez based on his lackluster leadership, but I also don't hold him out to be this demon socialist that these other people believed he was either.

In their minds, Republicans have done nothing wrong ever and the true problem lies with the Democrats.

They are super angry at the GM bailout, but don't think much about and even support the Wall Street Bank bailout- which was the much more expensive one by orders of magnitude.

All their talking points had many inaccuracies but pointing them out didn't have much effect if any.

 

Of course it wouldn't be too difficult to find Democrat supporters with an equally polarizing point of view- blaming Republicans for everything wrong while giving the prez and Dems a free pass. Not many seem to know about or care how Americans freedoms/liberties have increasingly come under the chopping block under the prez's watch and approval.

To hear each side speak, it's like they've been brainwashed and are devoid of having any independent thought.

 

It leaves me depressed and disappointed since what this means is there will be no true solutions coming from Washington anytime soon. Things are likely just going to move towards getting worse since no real problems are ever addressed such as globalization and the loss of American jobs and earning power or the skyrocketing costs of health care. Worse yet, the fact that congress is being consumed with corporate lobbyist money to push their interests over that of the average citizen falls mostly on deaf ears.

A good chunk of people don't even vote.

 

While many are feeling the ill effects of the slow economy, it's clear that the pain level hasn't risen enough to get people to start questioning the "canned" talking points and start getting more involved demanding true "intelligent" action- key word here is intelligence, not angry mob mentality. It's alarming to think how bad it has to become before people finally start thinking for themselves.

 

As long as so many people hold this fantasy that "their" side is going to be voted in and save the day from the "other side" and don't hold their side accountable for lack of performance or acting against their interests, while both elected sides are just about bought out by corporate interests, things like middle class prosperity and quality of life will continue to slide downhill.

 

 

 

 

 

I saw an article today on Nasty Gal Clothing Company. It's a new business that's been growing by leaps and bounds over the last few years.

From the article:

"Sales rocketed 10,160% from 2008 to 2011, making Nasty Gal the fastest-growing company in Los Angeles and the fastest-growing retail company period, at least according to the Inc. 5000 list released this month."

 

What caught my attention is the humble beginnings of the founder and now chief executive of the company, Sophia Amoruso:

 

"She's a community college dropout who has never taken a business or fashion class and admits she doesn't know how to make a PowerPoint presentation. Nasty Gal, expected to bring in more than $100 million in sales this year, is her first company. Previously, she was checking student IDs in the lobby of an art school for $13 an hour."

 

I love reading about these type of success stories. Conventional wisdom likes to tout advanced education such as an MBA as the key to success, but time and time again we see that many super successful entrepreneurs  achieve their high goals without taking the school path.

Not that school is a bad thing, but it shouldn't be seen as the end-all, be-all to ultimate success. What counts most is one's ability to come up with good ideas and act on them.

 

Especially in today's environment of corporate downsizing, we should all be learning skills to be self-sufficient rather than looking to work for someone else.

 

I also want to point out that her success doesn't mean that "everyone" will be as successful and if you are struggling, then you must be a loser or lazy. Too many people use individual success stories to fault the weaknesses/bad fortune of others and make excuses for not helping those in trouble.

You can have a great idea and still have difficulty making it- it's the nature of business and the ever changing market place. The key here is trying and putting forth your best effort so no matter what the outcome is, you will have few regrets if any.

 

The overall take away is that there are still plenty of good wealth opportunities - and it starts with focusing on doing what you enjoy and figuring out how it can be monetized.