What Other Bloggers Are Saying

Emanuel Balarie of Balarie Capital Management writes about asset allocation, the subject of my just completed series (Part I).  His firm specializes in managed futures accounts – something about which I know nothing.

His contribution to the discussion invokes the idea of adopting different investment strategies, rather than depending only on owning different asset classes. 
He points out that no matter which assets are bought, or no matter how
diversified the holdings, the basic strategy is 'buy and hold.'  When
allocations are changed, cash is raised from one asset and
invested in another – continuing the buy and hold philosophy.

Balarie
suggests different strategies and not just different assets.  For
example, 'trend following.'  This is more suitable for a trader, rather
than a long-term investor – but that's the point. With managed futures,
trend-following is a common method ('the trend is your friend').  By
adding this strategy to an investor's arsenal, the investor has the ability to own
nothing when markets are trendless, or go short when the trend is down.  That's a substantial change from traditional buy (get long) and hold. 

This is an interesting concept and certainly outside the mainstream of of traditional investment advice.

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Financial Armageddon is an excellent blog written by Panzer. He's been a market bear, but that's not why I'm mentioning him today.

He notes that people are changing their habits during the recession.  Swapping is gaining more adherents as retail shopping dwindles.  People have lost a lot of money both in the market and in the value of their homes. As a result, our world is different, and people are cooperating with each other – in mutually beneficial, money-saving arrangements.

Quoting Rosemary Hornak, a psychology professor at Meredith College in Raleigh, N.C, he blogs:

"You can't change the economy. You can't change the recession. Maybe
you can get a better job, but that won't be instantaneous. What do you
do?" she said. "Sharing is one of the things that first of all makes
you feel better about yourself. . . . We're moving into 'How can we
establish these kinds of personal connections, this helping others,
sharing, being a bit more neighborly?' "



Writing this blog is my attempt to share what I know about trading options.  I make no attempt to write about the most intricate details of complex strategies. Nor do I delve into option theory.

My primary focus is not on teaching you how to make money – although that's near the top of the list.  My number one objective is to help each of you survive and prosper over the longer term.  To me, that means helping readers understand the importance of risk management.

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As Always, Jeff White of TheStockBandit.net offers sage advice.  This time he's describing the advisability of holding positions when you know news is imminent:

"what are you in the market for…money or excitement?

If it’s profits you want, then you care about preserving capital and managing your risk whenever that capital of yours is on the line.

But of course if it’s excitement you’re after, then you just want a story to tell – and you’ll get it when you hold positions into earnings reports.  Only problem is, nobody really wants to hear about it."

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One Response to What Other Bloggers Are Saying

  1. Options Swing Trader Tony 07/24/2009 at 1:41 PM #

    Good advice Jeff. I’ve found over the years (although it is common sense) that if one trades for ‘the money’ or ‘excitement’ one is usually not paying attention very well to execution of one’s system – assuming one has a system, a trading strategy that actually works! Focus on the performance of a good system and the money, the big money can follow…