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  • August 1, 2008 10:53 AM EDT by Cody Willard

    The Big 3: Trading-Lessons Theme

    1.  I talked about TSCM earlier this week as a buy.  Stock was up huge today on a good earnings report.  But I’ll tell you that it’s a lot easier to talk about stocks than to trade them.  Don’t fool yourself into thinking you’d be printing money trading just because you “called” a few good trades.  Being bullish is so much easier than being long.

    2.  On a related note, one of my former partners in my hedge fund who’s got a great long term track record has been betting against the financials and the stock market all year, ever since he told me this was a “short opportunity of a lifetime”.  He’s up single digits on the year.   It’s easier being bearish than being short, see?

    3.  But as I told him – being up at all when the markets are down 20% on the year should be considered a victory.  Think about it…he’s outperformed the broader markets by 25% plus.  And that would annualize to 40% plus outperformance.  You know it’s bad out there, when staying in place is about as good as the best can do.  And in all seriousness, the best investors are great at not losing money…not just making more money.

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Justin

factor in inflation that the government is under reporting, and your buddy might not be in the green at all. the commodities bull market lives on. buy the weakness!!! If we see a summer rally (I think it's still on, but we're testing the bottom and some resistance in the 11,500 area), get ready to short it again. And if you are into trading currency, I think the dollar will continue to strengthen into August as a result of panic being cooled off from the government backstop of fannie/freddie. Of course it's bad for the dollar though over time. It's all going to fall apart as soon as the next president takes office. Look for interest rates to rise as well, even if the Fed keeps them low. Just because banks can borrow at 2% doesn't mean they'll be loaning any money below 10% with the massive inflation the Fed is creating. Housing prices will fall further, so don't go buying a house yet. As interest rates go up, the costs of houses will fall, and the more money that goes to paying interest, the better the write off will be for tax deductable purposes. The next leg down will approach 10,000. Bulls playing for a second half recovery will get taken to the meat grinder and fried on the grill making a nice burger for some hungry bears. Q3 and Q4 are going to be terrible for earnings and all of this money the government is printing up to prop up housing/financials is going to find it's way back into the broader economy. People know where to turn when their cash turns into trash. Don't be a sucker. Ignore the noise. Stick with the fundamentals.

August 1, 2008 at 1:31 pm

about this blog

  • Cody Willard is an anchor on the FOX Business Network. Willard is also the principal of an investment management company. He was a long-time featured columnist for the Financial Times and TheStreet.com as well as a regular featured economist and stock picker on CNBC's ''Kudlow & Company."

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