Q&A with Jim Gobetz (aiki14):
Name: Jim Gobetz
Twitter Alias: aiki14
Followers: 911
Jim is a Managing Partner of The Wallingford Trust. He posts frequently on Twitter as aiki14. Here is full Q&A.
Q: What instruments do you invest in besides stocks?
A: I trade options regularly, and have investments in bonds, Real Estate, Structured Products, and Oil Limited Partnerships.
Q: How long do you normally hold your stocks?
A: In my trading portfolio I have historically held days to weeks, but for the last 6 months I have been taking very short term hold positions in ETF’s and some very liquid stocks. I have a couple of swing trades on but do not typically hold overnight these days.
Q: How do you identify which stocks you want to buy?
A: I look for High Beta, Liquid stocks or ETF’s in the current market environment.
Q: How do you hedge against risk (options, stop loss, etc).
A: Depending on the position I’ll use stops, position size management, or options positions. I may take long or short options positions based on both the underlying and the price and liquidity of the options.
Q: When do you take losses and profits?
A: I use a very simple system, candlesticks, slow stochastics, and volume to determine buy and sell points. I monitor market depth to assess volume trends. I assign a level of risk to the trade, then determine what percentage of my portfolio I am willing to lose on it. Next I decide how much to place on the position. If I believe the position is worth risking .5% of my portfolio I might put 10% of my capital into the position and use a 5% stop. For the upside I use technical criteria. I am looking for overbought conditions based on the stochastics and fall offs in volume, if either indicates a reversal I am quick to move up my stops or exit. I also reduce positions to lock in profit as the price goes in my favor.
Q: How do you use Twitter each day for trading?
A: Intraday I use Stocktwits to see what the people on it are thinking, I believe it gives me a pretty good sense of what the general market is thinking. It’s the discussions outside of market hours where it is really of value. A source of good ideas I can put through my due diligence, or that spark an idea that is actionable.
Q: What Twitter widgets, applications, tools and services do you like using?
A: I use Tweetdeck, and really like it for keeping things manageable.
Q: If you had to recommend our readers to follow one person, who would that be?
A: There are many great folks who post, and to pick one is very difficult. That said if I could only pick one I would pick Fari Hamzei. He is HamzeiAnalytics on twitter. Even if these don’t get in, Agwarner , ToddStottlemyre, alphatrends, and stevenplace contribute an amazing amount of actionable information.
Q&A with Frank (stockguy22):
Name: Frank
Twitter Alias: stockguy22
Blog: work in progress
Followers: 1,499
Frank is retired and trades full-time. On Twitter he is stockguy22, keep up with his updates and give him a tweet if you have any questions. He’s always up for helping other traders. Her’es his full Q&A.
Q: Tell us a little about your background in investing.Any professional experience? What got you started? How long have you been trading? etc.
A: I learned trading on my own through books, courses and learning from my mistakes from actual trading.
I first started when I was still in college in 1985. I bought Microsoft (MSFT) for $1,000. I was in a business program and thought computers should be a growing market in the future.
I sold the same $1,000 batch of MSFT in 1994 for over $138,000. Microsoft had basically doubled and split almost every year. First big break I had and really learned how Compounding can actually work in the real world. I really did not make serious money till the last 3 years of holding MSFT. At the time buy and hold actually worked unlike the past 7 years.
Q: What instruments do you mainly invest in?
A: I mainly invest in stocks (on both the CDN and US markets) as well as some ETFs (oil) and options (calls & puts). I have traded the markets both long and short. I began shorting successfully for the first time in the summer of 2000 when the dotcom bubble burst.
I kept going against the market trying to catch the bottom and losing more and more until a friend who was shorting convinced me to short along with him. We did very well for the remainder of 2000.
Q: How do you identify which stocks you want to buy?
A: I look for momentum stocks for my intraday and swing trading. I look for stocks that are the percentage gainers/losers for the day/week/month as shorter term trades.
For my long term positions I have stocks that I buy/hold longer term only after I have done some fundamental analysis.
The area of investing which I’ve added to longer term for my retirement accounts are Health related stocks. I feel with the aging population that the health sector will be one of the largest growing sectors. (i.e. medications, hospitals, hip replacements, stretchers, hospital beds, senior homes etc.) will all be in more demand with the baby boomers getting older.
Q: How long do you normally hold your stocks?
A: I usually hold my stocks intraday for scalp plays or short term (overnight or 1-2 weeks at max). I also have some mid-term positions that I’m holding (6 months-2 years).
My long term retirement positions are mostly healthcare related and/or only stocks that provide good dividends to offset any volatility in this market.
Q: When do you take losses and profits?
A: I set my initial stop loss that I plan to take on a stock and stick with that. For example on swing trades no more then 3-5% since I try to buy at or near support levels and if that level breaks then I exit the position and try to re-enter at a later point. I think taking losses is something that a successful trader has to learn and live with.
Similarly, I’ll take profits into levels of resistance levels on stocks and I have learned to accept if I sell too soon and the stock continues higher. Sometimes what I do is only sell 1/3 to 1/2 of a position if we are in a momentum market like we’ve seen in the past 2 months (March – April 2009).
I don’t try to find the bottom or top on any stock, but I use Fibonacci retracement levels to identify levels of profit taking and stop losses for my intraday and swing trades.
Q: How do you hedge against risk (options, stop loss, etc).
A: I use options as a great hedge against risk.
As an example, recently I traded a lot of shares of Satyam (SAY) and made some great profits trading it intraday and swing trading it on volatility.
At the time, I had a larger than normal position on Satyam. So I bought the puts as a hedge. Subsequently, the stock had some accounting fraud and gapped down on Jan 12, 2009. The stock eventually collapsed from over $9 to .78 cents.
Instead of losing over $80k on this one trade the options actually covered my loss and I made approximately $4k.
I currently use straddles during earnings season. For example on RIMM I bought the puts/calls prior to earnings release. The stock gapped up over 23% so I lost on the puts but made a profit on the calls. In this case I lost approx $8k on the puts but made over $44k profit on the calls.
So I find options is a must learn for all traders since it can be a life saver for large positions as with SAY or great around earnings.
Q: How do you use Twitter each day for trading?
A: I find it very helpful in terms of receiving real time advice and giving real time advice
to other traders.
Traders can even post charts and links in real-time to help each other out.
I post my buys/sells to help some of the new traders out. I also post my profits and losses.
Recently, my biggest profit was on Dendreon (DNDN), which earned me over $117k on an overnight trade.
I actually found the DNDN trade posted by someone on Twitter. Then during the day, I saw unusual volume on no news, which made me think that something was happening with DNDN.
The next day they had the cancer news that made it go up over 200%+ so for me Twitter is a priceless resource.
Q: What Twitter widgets, applications, tools and services do you like using?
A: I currently use TweetDeck and also the web version of Stocktwits. I have the “my portfolio” tab running in the background on Stocktwits along with other people that I’m following. On my iPhone I use Tweetie and Twitterrific.
Q: If you could name a few, who would you recommend our readers to follow on Twitter?
A: Appleinvestor, alphatrends, upsidetrader and AndySwan would be the top 4 people who I’ve found to be helpful on Stocktwits.com and Twitter.com and that have good helpful posts each day.
I like to follow people who post charts and recommendations that I can check. Not someone that just posts profits and never posted an entry for that position.
Q&A with Mark H (fundmyfund):
Name: Mark Smith
Twitter Alias: fundmyfund
Blog: www.fundmymutualfund.com
Followers: 1,414
Mark Smith, also known as fundmyfund on Twitter, manages his virtual funds like he would a mutual fund. For full disclosure, he chronicles his virtual holdings and blogs about his investment rationale. His ultimate goal is to attract $7 million in pledges to start his own mutual fund. Here’s his full Q&A.
Q: Given that you must manage your portfolio as if it where a mutual fund can you go a little bit into detail as to how you have to manage your investments (are you restricted to only stocks)?
A: Focus on stocks both long and short, with cash as a tool not a penalty i.e. not afraid to hold large amounts of cash during times of uncertainty.
Q: How do you identify which stocks you want to buy?
A: I like sector themes, and superior growth at reasonable valuation for long sides and sector weakness on the short side. I try to keep a core position in names, and trade around the “edge” of a position on large swings up and down.
Q: How long do you normally hold your positions?
A: I can keep a core position for multiple years, but if a chart begins to break down badly (and many stocks do within a year) I either sell down the position sharply or exit it. I am more interested in price movement rather than time frame. What used to take (3-4 years ago) 4 months now many times takes only 4 days to accomplish because the market is so volatile. So if I have a position that gains 28% in 4 days, I am going to take some off the table.
Q: When do you take losses and profits?
A: Taking losses is much easier than taking profits if you can believe it. If a position begins to move against me in a material away I layer out of it. My purchases/sells are not in one big splash – I usually build up or close down a position in pieces. So if a position begins to move against my theory based on a chart I reduce it in size so it doesn’t hurt me. If I am shorting something that is below the 200-day moving average for example, and it breaks above it – something like that would have me close out the position and say I am wrong. Profits are taken on a condition of percentage gained as I mentioned above, but like many investors I tend to harvest profits too early.
Q: How do you hedge against risk (options, stop loss, etc).
A: Meaningful cash positions for once; also since I don’t have puts to buy against long common for example, I generally will try to balance some long vs short exposure in the portfolio as a whole.
Q: How do you use Twitter each day for trading?
A: I use Twitter in a variety of ways; since I am not in front of a TV during the day and so much of the action nowadays is based on “government actions” or “CNBC breaking news” I get information there quicker than anyplace else. I also see a variety of styles – although Twitter is dominated by day traders, there are some people who have different styles and even with day traders you can see the hot themes of the day and on volatile days if they are skewing long and short.
Q: What Twitter widgets, applications, tools and services do you like using?
A: Tweetdeck is my main tool.
Q: If you could name a few, who would you recommend our readers to follow on Twitter?
A: Andyswan, agwarner and stevenplace are 3 options demons.
Q&A with Satuki (trader_mom):
Name: Satuki
Twitter Alias: trader_mom
Blog: www.momdaytrader.com
Followers: 1,733
Satuki isn’t your regular stay at home mom, she is also a full time trader and chronicles her trades on her blog. On Twitter, she posts her day trades as trader_mom. Here is her full Q&A.
Q: Your blog says that you graduated with a degree in languages and communications. How did you get into trading?
A: I started to take interest in trading when I was in high school although I did not have any money to trade back then.By the time I went to college, I started trading Japanese stocks with a tiny account. It was a hobby and I lost all my money. After I graduated and I looked around for a day job, nothing really interested me. I guess it is because I am not really into that kind of life style. You know, something like having a boss breathing down my neck and being punctual.
After a little push from my husband, I have been trading full time for almost 5 years.
Q: Do you invest in instruments other than stocks?
A: I trade stocks only for now.
Q: How long do you normally hold your stocks?
A: 3-7 days for swing trading and I also actively day trade.
Q: How do you identify which stocks you want to buy?
A: For swing trading, I do look at the fundamentals of an underlying company. They should be reasonably sound. But fundamental analysis normally accounts for only 25% of my decision-making process.
A: So I use technical analysis a lot. I do not use any complex indicators. I only use candle sticks, volume and a simple moving average, combined with all patterns such as flag, wedge, breakouts and so on.
A: I do not trade penny stocks. Stocks that I trade must be at least 30 dollars or above.They must be active and liquid.
Q: When do you take losses and profits?
A: All profits and losses are planed ahead of the time. I use fixed profit targets and stop losses. When they are hit, my positions are closed. I never intervene once a trade is in motion
Q: How do you hedge against risk (options, stop loss, etc).
A: I use very rigid stop loss and keep my positions small and diversified, relative to my account
Q: How do you use Twitter each day for trading?
A: I generally talk about what I think about the market (general direction) and stocks that I will possibly trade and what direction I will trade them. I short stocks as comfortably as long stocks
Q: What Twitter widgets, applications, tools and services do you like using?
A: I use the free TwitterDeck which is a desktop client. I highly recommend this since web-based twitter is garbage. That is the only thing I use
Q: If you could name a few, who would you recommend our readers to follow on Twitter?
A: To be honest, I can not think of any. There are definitely a few good traders on Twitter. But they normally keep everything to themselves. Most of them only talk the talk.
Q&A with Hiro Takei (my10000dollars):
Name: Hiro Takei
Twitter Alias: my10000dollars
Blog: www.my10000dollars.com
Followers: 527
Hiro Takei (my10000dollars), like many traders out there on Twitter, has a a day job, trades part-time and shares what he learns through his blog. He started investing with his first $10,000 dollars he saved up and has been trading stocks and ETFs since 2006. Here is his full Q&A.
Q: Your blog says that you graduated from Penn State. Tell us a little about what you do and how you got into investing.
A: I currently work for Dreyer’s Grand Ice Cream (Nestle) as a Sr. Snack Planning Analyst full-time.I won’t go into the details of what I do because it’ll just be too long, but it is basically supply chain related, which was my concentration at Penn State.
I got into investing simply out of a curiosity to understand the opportunity prevalent in the stock market.I started out small with investing in safe mutual funds, and gradually moved onto individual stocks, and now I play with very risky instruments as well such as leveraged ETFs — Proshares Ultrashort Financials (SKF) for example.
While my concentration wasn’t quite financial related, I developed a huge passion around the stock market given the complexity and the opportunity surrounding it. Now I follow the market every day with the strong passion to decode the market better and make it to the 10-15% that actually make money in investing.
Q: What instruments do you mainly invest in?
A: I invest in anything from less volatile big name stocks to leveraged ETFs to even penny stocks from time to time. Penny stocks especially, are very interesting in that the behaviors of the stock prices rarely follow the overall trend of the market in any given day, but they have their own patterns that I found to be very interesting.
Q: How do you identify which stocks you want to buy?
A: I have a set of stocks that I have been following for a very long time such as the financial and oil ETFs. As far as new investing ideas, here are some of the methods I follow:
- Scan through the major news to identify interesting plays
- Use newsletter services to get some interesting plays from time to time
- Study the technical charts to understand support/resistance, Fibonacci retracement levels, etc
- Use stock scanning tools at www.stockcharts.com and identify certain technical indicators
Q: How long do you normally hold your stocks?
A: Anywhere from a day (rarely) to a few weeks
Q: When do you take losses and profits?
A: Profit — I try to set a target level and get out as soon as it hits the target. However, being that I like to swing trade, I’m starting to learn that I need to set my tolerance level higher from time to time to continue taking advantage of the continuing trend. I think one of the biggest challenges people face is holding onto their losses too long and getting out of a profitable position prematurely.While “don’t get greedy” certainly applies when taking profits, sometimes you need to hold it until you are confident that that trend you’re riding has changed its course. This has been my big challenge to-date.
Loss – I find the reasonable support/resistance levels and accept to take a loss once the stock price breaks through the levels. I do not use a certain % as a stop-loss target like some do since I like to have a rationale behind the stop loss levels (mainly derived from support/resistance and trendlines).
Q: How do you hedge against risk (options, stop loss, etc).
A: I mainly use stop loss to minimize my losses.I have also used options to limit my losses to the premium paid. It is painful when the option expires worthless but has saved me more than once by using options instead of holding onto a stock/ETF.
Q: How do you use Twitter each day for trading?
A: I primarily use it for Stocktwits.com, but I occassionally use it to discover new twitters who are investing, follow them, and visit their site
Q: What Twitter widgets, applications, tools and services do you like using?
A: I enjoy using Twitterdeck, Stocktwits.com, chart.ly, and tweetie on my iphone to keep me always up-to-date.
Q: If you could name a few, who would you recommend our readers to follow on Twitter?
A: I would say tickerville, alphatrends, and upsidetrader I follow their blog and they certainly have plenty of good things to say about the daily market. I think they know what they’re talking about.
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