Are there hashtags on Twitter directed at the Board of Directors of American companies? Enough is enough. We need to express our disatisfaction to the Boards of mismanaged American companies.
I recently added some of my research material on Crocs to a Google Document. If you have an interest in the company from an investment standpoint and would like to collaborate in understanding the company better, I will be happy to share the document with you. Send me an email at biggercapital@gmail.com and tell me why you would like to contribute.
Kind Regards,
Michael Bigger
Don't you love it when kids go wild in a sandbox? They build bridges, rivers, castles, and moats, their imaginations going wild with what is possible. For kids playing in a sandbox, anything is possible. They twist their minds, try all sorts of things, learn a ton, and exit much smarter little people.
Many traders have recently asked me how they can create a trading algorithm from scratch. The answer resides in finding your balance with a strategy that works for you. Let me explain by giving you a real-life example. I have a good friend and business partner who trades S&P 500 futures against Nasdaq 100 futures. He has been trading them for many years and has made a little bit of money, but nothing dramatic.
Last year, all of that changed. He made a couple of million in 2008, and he is on track to produce the same payoff in 2009. His trading successes started ramping up when he got in balance with his strategy. After tweaking his strategy for a few years and improving it, the strategy now makes sense for him, and he is comfortable running it. I know what he does, but I can't implement it: that strategy doesn't work for me. I am a stock and options guy. So I took some of my friend's recommendations and created my own strategy, ran it in a trading sandbox, tweaked it, and now I am making money with it—enough so that I got a significant capital allocation interest from an institutional investor. I am in balance with my strategy, it works for me, and I project confidence when I talk about it.
So, to answer my traders’ question, my advice is to start trading the market from different angles (short, neutral, long, low and high frequencies, etc.) and figure out an individualized "how to skin the cat" strategy that works for you. Experiment, tweak, tinker in the sandbox, and find your balance.
My friend broke her Iphone and had to make an appointment with the genius at the Genius Bar at the Apple Store.
Genius? You must be kidding me. This is the same arrogance displayed with financial firms before the financial crisis.
Remember?
The Morgan Stanley Advisor weeping at the wedding.
Citigroup's 200 years of investment wisdom.
Michael Bigger
Chief Dumbass Officer
4 Stars
Full of Bull is a great read for individual investors. Stephen McClellan makes a great case about why you shouldn’t drink Wall Street’s Kool-Aid. And Kool-Aid is exactly what Wall Street sells. Learning how the Street works is a vital lesson you must understand to protect your wealth.
Although this book is not targeted to professionals, the book reinforced my long-held views that analysts’ freshly issued opinions should be taken advantage of.
On page 98, McClellan makes the following comment: “Take time off during a bear market. To preserve your capital, stand back and reduce or eliminate your exposure to stock for a while.” This tactic seems inconsistent with the following statements:
• From Shelby Davies: “It is in a bear market you make most of your money, you just don’t realize it yet.”
• From Warren Buffet: “Be greedy when others are fearful.”
I posted a comment on the author’s blog about this inconsistency. The author responded:
I appreciate your interest in my blogs and my book. Yes, my strategy to avoid Bear Markets is contrary to that other advice. My foremost strategy is to protect your capital. It requires a 100% gain to off-set a 50% loss. I would rather miss the bulk of the 50% loss, even if it means I might miss a subsequent 50% rise. The Buffet strategy is for professionals. Individuals need to be more careful.
I think this is a very sensible recommendation for non-professionals.
I highly recommend this book and I will read it again if I start to lose my senses in the next bull market.
It took a few hundred years for the United States to accumulate a $10 trillion debt. That debt has funded all the wars the United States has participated in, including the Iraq war.
In the next five years, this debt will most likely double, as our gluttonous government relies on a $2 trillion annual deficit to jump-start the economy and fund social programs. Inertia has set in, and nothing will stop it.
In addition, the Federal Reserve and its overseas counterparts are printing money aggressively to support the global financial system and jump-start economies. There are no indications that central bankers will raise interest rates anytime soon.
Do not suffer the full effect when the consequences of this excessive money supply are felt. Protect yourself against inflation. The costs of protection are minimal and make these hedge measures worthy of implementation or, at a minimum, some consideration.
Some inflation pundits are recommending buying agricultural products, buying commodities, buying real estate, buying stock, and selling long bonds. These are all fine inflation hedges.
Another area that could thrive during a period of high inflation is the hard-good online marketplaces such as Amazon, Craigslist, eBay, and others. The reasons supporting their potential success are as follows:
1. Traditional retailers will have a tougher time raising prices quickly as compared to their technology-skilled competitors.
2. As the price of hard goods and the volatility of the market increase, activity on the online exchanges should increase.
3. Arbitrage opportunities will abound on the online space to the benefit of the marketplaces’ owners. Traditional retailers will be arbitraged to their detriment.
4. Online supplies of used merchandise should increase as prices increase, as sellers trade hard goods for hard goods.
Google Search might also benefit as a hard-good and price-discovery tool.
Do you know of any other non-obvious inflation beneficiaries I should be investigating? Let me know.
"NIWOT, COLORADO - September 30, 2009 - Crocs, Inc. (NASDAQ: CROX) announced today that the Company entered into a new asset-backed revolving credit facility with PNC on September 25, 2009. The agreement provides for up to $30 million in revolving loans which may be used for working capital needs and other items, as stipulated in the agreement. Certain of the Company’s subsidiaries were co-borrowers under the agreement." Read the full release at http://bit.ly/aCyHj .
This is another positive piece of the puzzle falling into place for Crocs. As I mentionned earlier this week, I expect the company to show a stellar balance sheet for the quarter ending today. The company increased the size of this facility versus the size of the facility it paid back in the second quarter. This indicates the business is on the mend.
Nike beats. The stock is up $4. Great news for Crocs, Deckers and the other shoe companies. There is never only one roach in the cupboard.
According to Wikipedia an “API is an interface in computer science that defines the ways by which an application program may request services from libraries and/or operating systems. An API determines the vocabulary and calling conventions the programmer should employ to use the services. It may include specifications for routines, data structures, object classes and protocols used to communicate between the requesting software and the library.” (http://tiny.cc/F4NXG)
If computer science is not your forte, relax and don’t let this definition intimidate you. I use APIs on a daily basis, and I can’t code my way out of a paper bag. I will introduce you to simple tools that will make APIs work for YOU!
At Bigger Capital we use APIs to integrate our trading platform by incorporating market data feeds, the algorithm, electronic order generation, risk management, and trade capture. The end result is consistency, efficiency, effectiveness, flexibility, integration, reliability, scalability, speed, and, ultimately, money.
Some brokerage firms have done a great job of expanding their API menus to facilitate quick and easy implementation of trading strategies using APIs.
Interactive Brokers (IB), the electronic broker Bigger Capital uses, offers several alternatives for connecting directly to its trading system. Its APIs are available for DDE for Excel, Java, C++, and ActiveX. “For traders with little or no programming experience, Interactive Brokers recommends the DDE for Excel platform, as Excel offers a familiar and user-friendly interface and the DDE API is seamlessly integrated into the Excel application.” (http://bit.ly/DBKmK) To help you get started with the Trader Workstation (TWS) APIs, you can attend IB’s live API for Beginners webinar.
We use both the DDE for Excel platform and ActiveX.
Take a big step today. If you want to learn more about APIs, get your hands dirty. Start using a DDE for Excel platform operating over a trading sandbox.
Implement your strategy via the API, experiment, and above all, have fun doing it while you are on your way to becoming an expert!
If you need some help with APIs, send me an e-mail at biggercapital@gmail.com. I will be happy to lead you in the right direction.
Crocs Buy a Fall Style and Get a Spring Style FREE promotion appears to be successful. We looked at Crocs.com and analyzed all the spring styles affiliated with this promotion. We found out that most of the spring styles are sold out. As a result, Crocs third quarter inventory position might be dropping meaningfully. In addition, this promotion might be creating some excitement over the new fall styles and increasing traffic to Crocs’ website.
Thursday, October 22, 2009 at 11:20AM